10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549 

FORM 10-Q

 (Mark One)

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

For the quarterly period ended:   September 30, 2019

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

For the transition period from ____________________ to ____________________.

Commission file number: 000-50053

AMERITYRE CORPORATION

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

Nevada	87-0535207
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1501 Industrial Rd., Boulder City, NV	89005
(Address of principal executive offices)	(Zip Code)

(702) 293-1930

(Issuer’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 ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  ☐	Non-accelerated filer  ☐	Smaller reporting company ☒
Emerging Growth Companies ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

The number of shares outstanding of Registrant’s Common Stock as of November 8, 2019: 47,727,867 

TABLE OF CONTENTS

		Page
PART I
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
PART II
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Not Applicable	19
Item 5.	Other Information	19
Item 6.	Exhibits	19
SIGNATURES		20

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

AMERITYRE CORPORATION

Balance Sheets

	September 30, 2019			June 30, 2019
ASSETS	(Unaudited)
CURRENT ASSETS
Cash	$	462,684		$	557,026
Accounts receivable		279,814			277,690
Current inventory - net		531,344			448,407
Prepaid and other current assets		96,872			82,596
Total Current Assets		1,370,714			1,365,719
RIGHT TO USE LEASE ASSETS, OPERATING, NET		806,944			845,256
PROPERTY AND EQUIPMENT
Molds and models		583,611			583,611
Equipment		3,009,188			3,003,797
Furniture and fixtures		73,423			66,173
Software		247,610			247,610
Less – accumulated depreciation		(3,781,379	)		(3,763,672	)
Total Property and Equipment - net		132,453			137,519
OTHER ASSETS
Patents and trademarks – net		106,177			110,601
Non-current inventory		273,259			269,824
Deposits		11,000			11,000
Total Other Assets		390,436			391,425
TOTAL ASSETS	$	2,700,547		$	2,739,919
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	634,748		$	649,046
Current portion of long-term debt		13,772			13,609
Current portion of lease liability		142,200			141,000
Deferred revenue		18,404			19,408
Total Current Liabilities		809,124			823,063
Long-term debt		72,413			75,418
Long-term lease liability		557,550			594,000
TOTAL LIABILITIES		1,439,087			1,492,481
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock: 5,000,000 shares authorized of $0.001 par value, 2,000,000 and 2,000,000 shares issued and outstanding, respectively		2,000			2,000
Common stock: 75,000,000 shares authorized of $0.001 par value, 47,727,867 and 47,727,867 shares issued and outstanding, respectively		47,728			47,728
Additional paid-in capital		62,695,035			62,695,035
Stock payable		10,702			583
Accumulated deficit		(61,494,005	)		(61,497,908	)
Total Stockholders’ Equity		1,261,460			1,247,438
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,700,547		$	2,739,919

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

3

AMERITYRE CORPORATION

Statements of Operations

(Unaudited)

	For the Three Months Ended September 30,
	2019			2018
NET SALES	$	979,297		$	827,244
COST OF REVENUES		690,599			561,012
GROSS PROFIT		288,698			266,232
EXPENSES
Research and development		26,016			23,073
Sales and marketing		43,471			50,924
General and administrative		193,430			189,548
Total Expenses		262,917			263,545
INCOME FROM OPERATIONS		25,781			2,687
OTHER INCOME (EXPENSE)
Interest income		174			103
Interest expense		(335	)		(1,562	)
Other income		3,283			3,089
Total Other Income, net		3,122			1,630
NET INCOME		28,903			4,317
Preferred Stock Dividend		(25,000	)		(25,000	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	3,903		$	(20,683	)
BASIC AND DILUTED INCOME (LOSS) PER SHARE	$	0.00		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		47,727,867			44,514,035

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

4

AMERITYRE CORPORATION

Statements of Stockholders’ Equity

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid in		Stock			Accumulated
	Shares		Amount		Shares		Amount		Capital		Payable			Deficit
Balance, June 30, 2018		2,000,000	$	2,000		44,476,346	$	44,476	$	62,638,754	$	14,601		$	(61,438,920	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock option based compensation expense – options		-		-		-		-		2,901		-			-
Stock based compensation expense for employee and Board of Director service		-		-		1,155,796		1,156		18,035		(4,806	)		-
Net income for the quarter		-		-		-		-		-		-			4,317
Balance, September 30, 2018		2,000,000		2,000		45,632,142		45,632		62,659,690		9,795			(61,459,603	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock option based compensation expense – options		-		-		-		-		967		-			-
Stock based compensation expense for employee and Board of Director service		-		-		900,725		901		15,336		(9,212	)		-
Net loss for the quarter		-		-		-		-		-		-			(94,744	)
Balance, December 31, 2018		2,000,000		2,000		46,532,867		46,533		62,675,993		583			(61,579,347	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock based compensation expense for employee and Board of Director service		-		-		-		-		-		10,119			-
Net income for the quarter		-		-		-		-		-		-			69,879
Balance, March 31, 2019		2,000,000		2,000		46,532,867		46,533		62,675,993		10,702			(61,534,468	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock based compensation expense for employee and Board of Director service		-		-		1,195,000		1,195		19,042		(10,118	)		-
Net income for the quarter		-		-		-		-		-		-			61,560
Balance, June 30, 2019		2,000,000		2,000		47,727,346		47,728		62,695,035		583			(61,497,908	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock based compensation expense for employee and Board of Director service		-		-		-		-		-		10,119			-
Net income for the quarter		-		-		-		-		-		-			28,903
Balance, September 30, 2019		2,000,000	$	2,000		47,727,867	$	47,728	$	62,695,035	$	10,702		$	(61,494,005	)

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

5

AMERITYRE CORPORATION

Statements of Cash Flows

(Unaudited)

	For the Three Months Ended September 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	28,903		$	4,317
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization expense		25,194			20,473
Stock based compensation		10,119			9,785
Changes in operating assets and liabilities:
Accounts receivable		(2,124	)		53,668
Prepaid and other current assets		(14,276	)		(24,768	)
Inventory and any change in inventory reserve		(86,372	)		(59,953	)
Accounts payable and accrued expenses		(39,299	)		105,007
Deferred revenue		(1,004	)		(14,250	)
Net Cash Provided/Used by Operating Activities		(78,859	)		94,279
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(12,641	)		-
Net Cash Used by Investing Activities		(12,641	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on notes payable		(2,842	)		(4,651	)
Net Cash Used by Financing Activities		(2,842	)		(4,651	)
NET (DECREASE) INCREASE IN CASH		(94,342	)		89,628
CASH AT BEGINNING OF PERIOD		557,026			213,854
CASH AT END OF PERIOD	$	462,684		$	303,482

NON-CASH FINANCING ACTIVITIES
Interest paid	$	335	$	1,562
Income taxes paid		-		-
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
Accrued preferred stock dividends	$	25,000	$	25,000
Operating lease renewal, decrease in right to use asset and related liability	$	35,250	$	-

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

6

AMERITYRE CORPORATION

Notes to the Unaudited Condensed Financial Statements

September 30, 2019

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  We believe the disclosures and information presented are adequate to make the information not misleading.  These interim condensed financial statements should be read in conjunction with our most recent audited financial statements and notes thereto included in our June 30, 2019 Annual Report on Form 10-K.  Operating results for the quarter ended September 30, 2019 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2020.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies disclosed herein have not changed since our audited financial statements and notes thereto included in our June 30, 2019 Annual Report on Form 10-K, except as noted below.

Reclassifications

Certain reclassifications, which have no effect on net income in our current presentation, have been made in the first quarter to record leasehold improvements amortization costs to all departments instead of solely to General and Administration. This reclassification was made in order to better reflect the benefit of these expenses.

Revenue Recognition

The majority of our revenue is derived from short-term sales contracts. We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”.

Revenue for our products is recognized at the time in which our performance obligation is satisfied which we have defined as “control” of the product by the customer. “Control” is defined as a customer having “rights/obligations of physical control over the product or has the rights and intention to control the product.” Based on the terms of our contracts, a customer’s “control” is based on analysis of the following; (i) when a customer arranges their own shipping, and once the product has left our dock, Amerityre recognizes revenue for the product.  In effect by arranging their own shipping the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange their own shipping we cannot recognize revenue until it is delivered and the customer takes “control” of the product. This establishes a “deferred revenue” event until such time as delivery of the product has been completed and we have proof from the shipper of the delivery (and change in control).

Deferred revenue was $18,404, inclusive of $45 of shipping and handling revenue (see below), as of September 30, 2019.  Deferred revenue was $6,462, inclusive of $1,114 of shipping and handling revenue (see below), as of September 30, 2018. 

Shipping and Handling

Shipping and Handling Fees require that freight costs charged to customers be classified as revenues. Freight expenses are included in costs of sales and are recognized as incurred.  Due to our adoption of ASC 606 as discussed above, we defer the revenues of shipping and handling until the related revenue is also recognized.

The result of this accounting is a deferral of $45 as of September 30, 2019 and $1,114 as of September 30, 2018.

7

AMERITYRE CORPORATION

Notes to the Unaudited Condensed Financial Statements

September 30, 2019

Right to Use Assets – Leases

We account for all Company leases following a multi-step analysis process which includes:

● Analysis of all agreements to determine if a lease exists, inclusive of this analysis is the length of the agreement and amount of the resulting liability. Based on this we have determined the following:

● Assets with a length less than 1 year are not considered leases and,

● Assets with a value of less than our capitalization policy of $2,500 are not considered a lease.

Items that do not qualify as leases are treated similar to service agreements and expensed as incurred.

Once an item qualifies for lease accounting we analyze the item for operating or finance lease treatment with the major difference that finance leases include interest as a term note would. In the case that a finance lease does not have a stated interest rate, we will impute the interest.

Both operating and finance leases result in a right to use asset and related lease liability on our balance sheet.

Items that enhance a lease asset, such as leasehold improvements, are capitalized with the related right to use asset. Amortization of that improvement is based on all known facts inclusive of the lease term. 

Basic and Fully Diluted Net Income (Loss) Per Share

Basic and Fully Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period.

Our outstanding stock options and warrants and shares issuable upon conversion of outstanding convertible notes have been excluded from the basic and fully diluted net loss per share calculation.  We excluded 3,970,000 and 4,210,000 common stock equivalents for the quarters ended September 30, 2019 and 2018, respectively, because they are anti-dilutive.

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

NOTE 3 - INVENTORY

Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or net realizable value.  The inventory consists primarily of chemicals, finished goods produced in our plant and products purchased for resale.

	September 30, 2019			June 30, 2019
	(Unaudited)
Raw Materials	$	221,363		$	221,767
Finished Goods		650,716			557,977
Inventory reserve		(67,476	)		(61,513	)
Inventory – net (current and long term)	$	804,603		$	718,231

Our inventory reserve reflects items that were deemed to be defective or obsolete based on an analysis of all inventories on hand.

The Company critically reviews all slow moving inventory to determine if it is defective or obsolete.  If not defective or obsolete we presented these items as non-current inventory, although all inventory is ready and available for sale at any moment.  

8

AMERITYRE CORPORATION

Notes to the Unaudited Condensed Financial Statements

September 30, 2019

NOTE 4 – RIGHT TO USE LEASE ASSETS

Based on our lease accounting policy, we have identified the following operating leases. As of September 30, 2019 we have no financing leases:

	September 30, 2019			June 30,  2019
	(Unaudited)
Facility lease	$	699,750		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(173,182	)		(170,120	)
Right to use leased assets, operating, net	$	806,944		$	845,256

In March 2019 we negotiated a five year extension of the lease on our executive office and manufacturing facility located at 1501 Industrial Road, Boulder City, Nevada.  The property consists of a 49,200 square foot building.  We currently occupy all 49,200 square feet, inclusive of approximately 5,500 square feet of office space, situated on approximately 4.15 acres.  Our remaining liability under this agreement is $699,750, payable at amounts ranging from $11,750 to $12,600 a month until June 30, 2024.

NOTE 5 - DEBT

A former board member, Silas O. Kines, who passed away on January 11, 2012, was also the principal owner of Forklift Tire of Florida and K-2 Industrial Tire, Inc.  In accordance with the Commission Agreement with Forklift Tire of Florida, dated February 2, 2011, between Amerityre Corporation and K-2 Industrial Tire, Inc., K-2 is due a five percent (5%) commission on all forklift tire sales.  In exchange for the forklift models transferred to Amerityre under that agreement, the first $96,000 in commission payments will be used to extinguish the long term liability recorded on the transaction.  As of September 30, 2019, $2,000 and $62,098 (June 30, 2019, $2,000 and $62,089) were recorded for the current and long-term portion, respectively, of the related liability.

In June 2016, the Company executed a term note with U.S. Bank to finance critical manufacturing equipment and operating enhancements.  The total amount financed was $55,068, at 5.59% interest, with payments of $1,059 due for 60 months starting July 2016. This note was paid in full in October 2019. 

NOTE 6 - STOCK OPTIONS AND WARRANTS

Prior Issuances of options

On January 1, 2018, 480,000 options were granted to the Company’s Chief Executive Officer as part of his employment offer.  The options have a strike price of $0.10, vest ratably January 1, 2018 to December 31, 2018 and expire December 31, 2021.

We estimated the fair value of the stock options above at the grant date based on the following weighted average assumptions:

Risk-free interest rate	2.010	%
Expected life	3.0	years
Expected volatility	114.38	%
Dividend yield	0.00	%

9

AMERITYRE CORPORATION

Notes to the Unaudited Condensed Financial Statements

September 30, 2019

A summary of the status of our outstanding stock options as of September 30, 2019 and June 30, 2019, and changes during these periods is presented below:

	September 30, 2019						June 30, 2019
			Weighted Average		Intrinsic					Weighted Average		Intrinsic
	Shares		Exercise Price		Value		Shares			Exercise Price		Value
Outstanding beginning of period		3,970,000	$	0.12				3,730,000		$	0.13
Granted		-	$	0.00				480,000		$	0.10
Expired/Cancelled		-	$	0.00				(240,000	)	$	0.10
Exercised		-	$	0.00				-		$	0.00
Outstanding end of period		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-
Exercisable		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at September 30, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2019		Weighted Average Remaining Contractual Life
$	0.08		150,000		2.17	$	0.08		150,000		2.17
$	0.10		2,370,000		1.20	$	0.10		2,370,000		1.20
$	0.17		1,450,000		1.00	$	0.17		1,450,000		1.00
			3,970,000						3,970,000

NOTE 7. – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed financial statements.

10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance or financial condition.  Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in “Part I. Item 1A. Risk Factors” as well as those discussed elsewhere in this report.  The historical results set forth in this discussion and analyses are not necessarily indicative of trends with respect to any actual or projected future financial performance.  This discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this report.

Overview

Amerityre engages in the research and development, manufacturing, and sale of polyurethane tires.  We have developed unique polyurethane formulations that allow us to make products with superior performance characteristics in the areas of abrasion resistance, energy efficiency and load-bearing capabilities, when compared to conventional rubber tires.  We also believe that our manufacturing processes are more energy efficient than the traditional, rubber tire, manufacturing processes, in part because our polyurethane compounds do not require the multiple processing steps, extreme heat, and high pressure that are necessary to cure rubber. We believe tires produced with our proprietary polyurethane formulations last longer, are less susceptible to failure and are friendlier to the environment when compared to competitor offerings.

We concentrate on three segments of the flat free tire market:  light duty polyurethane foam tires, polyurethane elastomer industrial tires and agricultural tires. Our focus continues to be applications and markets where our advantages in product technology, tire performance, and customer service give us an opportunity to obtain premium pricing. Our most recent activities in these areas are set forth below:

Light Duty Polyurethane Foam Tires – The sale of polyurethane foam tires to original equipment manufacturers, distributors and dealers accounts for the majority of our revenue. We produce a broad range of products for the light duty tire market. Our product development and marketing efforts are focused on building customer relationships and expanding sales with original equipment manufacturers and tire distributors.  Our competitive advantage is creating unique product solutions for customers who have challenging tire performance requirements that cannot be met by competitor offerings.

We experienced strong demand for our polyurethane foam tires in the 1^st quarter, in line with our expectations. Higher sales were driven by continued strength in the overall economy as well as seasonal factors that have traditionally boosted sales this time of year. While the tariff dispute with China continues to provide a headwind to our imported wheel rim costs and the overall US economy, for the majority of our products we continue to manage these costs without raising prices to our customers. We reluctantly implemented a small price increase on our large industrial wheels to partially offset cost increases for our 12 inch rims during the first quarter of fiscal year 2020.

Polyurethane Elastomer Industrial Tires – We had negligible sales of elastomer forklift and elastomer industrial tires during the first fiscal quarter. We produced samples for a new tire project for a new customer, and we anticipate additional samples will be produced this current quarter. It is too early to project whether this work will result in meaningful ongoing sales volumes going forward but the Company is optimistic this work will bear fruit in the form of new business opportunities in future quarters. 

The Company continued to see increasing sales of tires using its new elastomer formulation Elastothane^TM 500. Large scale adoption of this tire has been slow due to a lack of product exposure as well as its higher price tag relative to our polyurethane foam product. Field testing of this formulation with select customers continues to be successful. We continue to believe this new formulation represents a significant development for our product portfolio.

Agricultural Tires – Agricultural tires sales remain depressed due to low farm incomes and a lack of available funds from farmers. Chinese tariffs on US grown soybeans and other agricultural products remains a drag on commodity pricing domestically and demand overseas. The prospect for improved agricultural commodity pricing remains poor in our opinion. We continue to look for new opportunities with OEMs and distributors for our tires. The introduction of our Elastothane^TM 500 formulation has enabled us to improve our tire offerings in several agricultural applications, which we believe will present new business opportunities once the farmers have money to invest in new equipment.

11

Due to the Company’s limited resources, tire projects which require significant investment have been put on hold. We believe investment in R&D for new and improved products is important to the continued turnaround of our overall business, and we plan to selectively invest in promising opportunities that fit in our current financial model. We have several product evaluation programs ongoing in different applications which have the potential to develop into significant business in the coming quarters. We expect our current R&D investments to continue to prove to be a prudent use of our capital resources.

As described above, our product line covers diverse market segments which are unrelated in terms of customer base, product distribution, market demands and competition. Our external sales team is comprised of independent manufacturer representatives with strong tire industry experience.  The Company’s continued emphasis on proper product pricing and targeted marketing campaigns continue to drive more profitable sales.   Our website continues to be an educational tool for the marketplace about our products, and it continues to generate some online sales. Higher sales of polyurethane (“PU”) foam tires in first quarter of fiscal year 2020 versus the same period last year was the result of a large customer beginning its seasonal tire purchases earlier in Fiscal year 2020 than last year.

Revenue for the first quarter of fiscal year 2020 was 18.4% higher than the year earlier period. Our strategy continues to be to focus on market segments where we have identified technological and product performance advantages. Other than the cost of our imported wheel rims, raw material pricing remained fairly stable during the recent quarter, but higher than the year ago period. Our imported wheel rims are still subject to price fluctuations due to larger tariffs as the trade dispute between the U.S. and China continues. Our gross margins consequently declined in the recent quarter compared to the same period the previous year, driven by higher raw material costs. Improving top line sales revenue growth remains our primary goal. Our ability to broaden our customer base has enabled us to overcome challenging business conditions in key segments such as the depressed agricultural sector to maintain our overall sales revenue levels over the past 3 years. We are optimistic that these new customers will develop into larger revenue opportunities as applications for our tires continues to grow. Continued strength in the US economy is also a key factor in our future revenue growth, and weakness in the overall economy remains a risk factor going forward in fiscal year 2020.

Factors Affecting Results of Operations

Our operating expenses consisted primarily of the following:

• Cost of sales, which consists primarily of raw materials, components and production of our products, including applied labor costs and benefits expenses, maintenance, facilities and other operating costs associated with the production of our products;

• Selling, general and administrative expenses, which consist primarily of salaries, commissions and related benefits paid to our employees and related selling and administrative costs including professional fees;

• Research and development expenses, which consist primarily of  direct labor conducting research and development, equipment and materials used in new product development and product improvement using our technologies;

•  Consulting expenses, which consist primarily of amounts paid to third-parties for outside services;

•   Depreciation and amortization expenses which result from the depreciation of our property and equipment, including amortization of our intangible assets; and

•  Stock based compensation expense related to stock awards issued to employees and consultants for services performed for the Company.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with United States generally accepted accounting principles.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.  On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies.  We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances.  These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

12

We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and are in addition to revenue, inventory and stock valuation with accounting policies disclosed in our financial statements. The following require critical management judgments and estimates about matters that may be uncertain.  If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.

Valuation of Intangible Assets and Goodwill

Patent and trademark costs have been capitalized at September 30, 2019, totaling $487,633 with accumulated amortization of $381,456 for a net book value of $106,177. Patent and trademark costs capitalized at September 30, 2018, the prior year, totaled $487,633 with accumulated amortization of $360,743 for a net book value of $126,890.

The patents which have been granted are being amortized over a period of 20 years. Patents which are pending or are being developed are not amortized. Amortization begins once the patents have been issued. As of September 30, 2019 and 2018, respectively, there were no pending patents.  Annually, pending or expired patents are inventoried and analyzed, which resulted in the recognition of a loss on abandonment, expiration or retirement of patents and trademarks of $-0- for each of the periods ended September 30, 2019 and 2018, respectively.

Amortization expense for the years ended September 30, 2019 and 2018 was $4,425 and $5,715 respectively.  The Company evaluates the recoverability of intangibles and reviews the amortization period on a continual basis utilizing the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other.  We consider the following indicators, among others, when determining whether or not our patents are impaired:

• any changes in the market relating to the patents that would decrease the life of the asset;

• any adverse change in the extent or manner in which the patents are being used;

• any significant adverse change in legal factors relating to the use of the patents;

• current period operating or cash flow loss combined with our history of operating or cash flow losses;

• future cash flow values based on the expectation of commercialization through licensing; and

• current expectations that, more likely than not, the patents will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

13

Results of Operations

Our management reviews and analyzes several key performance indicators in order to manage our business and assess the quality and potential variability of our sales and cash flows.  These key performance indicators include:

•   Revenues, net of returns and trade discounts, which consists of product sales and services and is an indicator of our overall business growth and the success of our sales and marketing efforts;

•   Gross profit, which is an indicator of both competitive pricing pressures and the cost of goods sold of our products and the mix of product and license fees, if any;

•   Growth in our customer base, which is an indicator of the success of our sales efforts; and

•   Distribution of sales across our products offered.

The following summary table presents a comparison of our results of operations for the fiscal quarters ended September 30, 2019 and 2018 with respect to certain key financial measures.  The comparisons illustrated in the table are discussed in greater detail below.

	Three Month Period Ended September 30,						Percent Change
	(in 000’s)
	2019			2018			2019 vs. 2018
Net revenues	$	979		$	827			18.4	%
Cost of revenues		(690	)		(561	)		23.0	%
Gross profit		289			266			8.6	%
Research  and development expenses		(26	)		(23	)		13.0	%
Sales and marketing expense		(43	)		(51	)		(15.7	)%
General and administrative expense		(194	)		(190	)		2.1	%
Other income		3			2			50.0	%
Net income		29			4			625.0	%
Preferred stock dividend		(25	)		(25	)		0.0	%
Net income (loss) attributable to common shareholders	$	4		$	(21	)		119.0	%

Quarter Ended September 30, 2019 Compared to September 30, 2018

Net Revenues.  Net revenues of $979,297 for the quarter ended September 30, 2019, represents an 18.4% increase over net revenues of $827,244 for the same period in 2018. These results were in line with expectations. We expect our polyurethane foam products to constitute the majority of our sales during the upcoming fiscal year.

Cost of Revenues.  Cost of revenues for the quarter ended September 30, 2019 was $690,599 or 70.5% of sales compared to $561,012 or 67.8% of sales for the same period in 2018. This decrease in Gross Margin was due to increases in chemical raw material and steel wheel costs as well as increases in labor overtime costs. We anticipate that raw material costs will stabilize in the upcoming fiscal year, but the magnitude of the increased costs associated with trade tariffs is uncertain at this time. 

Gross Profit.  Gross profit for the quarter ended September 30, 2019 was $288,698 compared to $266,232 for the same period in 2018. Gross profit for the quarter ended September 30, 2019 increased by $22,466 or 8.6% over the same period in 2018 due to higher costs of revenue as outlined in the discussion above.  The September 30, 2019 gross profit reflects a 29.5% gross margin for product sales compared to a gross margin on product sales of 32.2% in 2018.

Research & Development Expenses (R&D).  Research and development expenses for the quarter ended September 30, 2019 were $26,016 compared to $23,073 for the same period in 2018. We continue to invest in product formulation and new product development where appropriate to support our business plan.

Sales & Marketing Expenses. Sales and marketing expenses for the quarter ended September 30, 2019 were $43,471 as compared to $50,924 for the same period in 2018. The difference between periods relates to lower commission expenses paid during the period, as a larger proportion of sales in the current period were generated by in-house sales personnel rather than external sales representatives.

14

General & Administrative Expenses.  General and administrative expenses for the quarter ended September 30, 2019 were $193,430 compared to $189,548 for the same period in 2018. We continue to control costs and find more efficient ways to conduct our business activities.

Other Income, net.  Other income for the quarter ended September 30, 2019 was $3,122 compared to other income of $1,630 for the same period in 2018. The primary driver in this variance is lower interest expense due to the payoff of debt.

Net Income.  Net income for the quarter ended September 30, 2019 of $28,903 compared to a net income of $4,317 for the same period in 2018, an increase in net income of $24,586.

Liquidity and Capital Resources

Cash Flows

The following table sets forth our cash flows for the quarters ended September 30, 2019 and 2018.

	Periods ended Sept. 30,
	(in 000’s)
	2019			2018
Net cash (used)/provided by operating activities	$	(79	)	$	94
Net cash used by investing activities		(13	)		-
Net cash used by financing activities		(2	)		(4	)
Net increase (decrease) in cash during the period	$	(94	)	$	90

Net Cash (Used)/Provided by Operating Activities. Our primary sources of operating cash during the quarter ended September 30, 2019 came from collections from customers on balances from June 30, 2019 and sales for the quarter. Our primary use of operating cash was an increase in prepaid and other current assets, specifically related to renewal of insurance policies (a normal reoccurrence in our first quarter of fiscal year 2020), increase in inventory levels in preparation for shipment of a large order in early October and a larger accounts payable balance at September 30, 2019 versus June 30, 2019 (a variance due to when the quarter ended).  Net cash used by operating activities was $78,859 for the quarter ended September 30, 2019 compared to net cash provided by operating activities of $94,279 for the same period in 2018. 

Non-cash items include depreciation and amortization and stock based compensation.  Our net income was $28,903 for the quarter ended September 30, 2019 compared to a net income of $4,317 for the same period in 2018.  The net income for the quarter ended September 30, 2019 included non-cash expenses for depreciation and amortization of $25,194 and stock-based compensation of $10,119.  As of September 30, 2018, depreciation and amortization was $20,473 and stock-based compensation totaled $9,785.

Net Cash Used by Investing Activities. Net cased used by investing activities was $12,641 for the quarter ended September 30, 2019 as we purchased new computers and rebuilt production equipment.

Net Cash Used by Financing Activities.  Net cash used by financing activities was $2,842 for the quarter ended September 30, 2019 and $4,651 for the same period in 2018. The primary use of cash for the quarter ended September 30, 2019 was payment of notes payable.

Our principal sources of liquidity consist of cash and payments received from our customers.  We do not have any significant revolving credit arrangements.  Historically, our expenses have exceeded our sales, resulting in operating losses.  From time to time, we have obtained additional liquidity to fund our operations through the sale of shares of our common stock and the placement of short-term debt instruments.  At the end of 2016, we were able to obtain term bank debt financing to finance critical manufacturing equipment and operating enhancements, the majority of which was placed in service in fiscal year 2017 and has been paid off in October 2019.  Management continues to evaluate financing options but is choosing to delay financing at terms that subject the Company to high costs of debt and we are reluctant to raise money through stock sales at what we believe are highly dilutive share prices.  Additionally, management has notified our preferred shareholder that we are suspending future payments of preferred cash dividend payments, so the Company can increase its working capital levels.

15

We have historically not succeeded in establishing favorable revolving short term financing such as lines of credit. In the quarter ended March 31, 2015, we entered into a short term receivable factoring agreement with a third party to sell our receivable invoices.  This agreement enables us to sell individual customer invoices for faster cash flow to the Company as we deem needed. As of September 30, 2019, we have not needed to activate this financing option due to increased focus on adherence to established collection policies and proactive communication with repeat customers, including adjusting credit limits to allow for increased sales volume where warranted.

Cash Position, Outstanding Indebtedness and Future Capital Requirements

At November 6, 2019, our total cash balance was $365,862, none of which is restricted; accounts receivables was $266,205; and inventory, net of reserves for slow moving or obsolete inventory, and other current assets was $754,629. Our total indebtedness, specifically which management reviews for cash management, was $1,245,045 and includes $493,139 in accounts payable and accrued expenses, $2,000 in current portion of long-term debt, $61,906 in long-term debt and $688,000 in total operating lease liability.

We continue to take actions to improve our liquidity and access to capital resources. In order to fully execute the annual strategic business plan discussed during our shareholder meeting in November 2018, we required more capital resources. However, management continues to maintain that an equity financing at the current market conditions would be too dilutive and not in the best interests of our shareholders. We will pursue potential opportunities to secure short-term loans, long-term bank financing, revolving lines of credit with banking institutions and equity based transactions with interested financial firms and strategic industry partners in our effort to improve the Company’s financial position and enhance shareholder value.

The Company currently does not have an existing revolving credit facility but we were able to obtain term bank debt financing at the end of 2016 to finance critical manufacturing equipment and operating enhancements the majority of which was placed in service in fiscal year 2017. We continue to work with our vendors to obtain extended credit terms and increase credit lines where needed. Additionally, we continue to focus on adherence to established collection policies and proactive communication with repeat customers, including adjusting credit limits to allow for increased sales volume where warranted.

We are intent on focusing on the sale and distribution of profitable product lines. Management continues to look for further financing facilities at affordable terms that will allow the Company to maintain sufficient raw material and finished goods inventory to capitalize on sales growth opportunities. We are limiting our capital expenditures to that required to maintain current manufacturing capability or support key business initiatives identified in our strategic sales plan.  We continue to work to reduce our overall costs wherever possible.

To help address our cash resources which at times may be limited, we have held discussions with banks and other lenders regarding establishing a line of credit for short term cash needs, however at this time we have not succeeded in establishing such a line of credit.  We have entered into a short term receivable factoring agreement with a third party to sell our receivable invoices.  This agreement enables us to sell individual customer invoices for faster cash flow to the Company as we deem needed. As of September 30, 2019, we have not needed to activate this financing option as explained above.

Management continues to execute its strategic plan focusing on “Profitability as a Mindset”.  The Company’s emphasis on proper product pricing and new marketing campaigns has driven more profitable sales. Improvement in results has continued and the Company has been successful in reducing its required breakeven sales level. 

In assessing our liquidity, management reviews and analyzes our current cash, accounts receivable, accounts payable, capital expenditure commitments and other obligations.  In connection with the preparation of our financial statements for the period ended September 30, 2019, we have analyzed our cash needs for the next twelve months. We have concluded that our available cash and accounts receivables are sufficient to meet our current minimum working capital, capital expenditure and other cash requirements for this period.  However, to expand manufacturing and sales operations beyond the current level, additional capital may be required.

The Company has, on occasion, instituted initiatives to incentivize sales of slower moving inventory through promotional pricing. These programs will continue to be selectively utilized in the upcoming quarters to monetize inventory, promote individual product lines, and improve our cash flow.

As of November 8, 2019, the Company has approximately 1,626,000 shares authorized and available for issuance. Although we are reluctant to raise money through stock sales at what we believe are dilutive share prices, these authorized but unissued and unreserved shares of our common stock can be utilized if necessary to fund the expansion of our manufacturing operations or to obtain additional working capital. Because of our low stock price, we are seeking shareholder approval to increase our authorized common stock at our annual shareholders meeting on December 4, 2019.

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Off-Balance Sheet Arrangements

We do not currently have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts.

Cautionary Note Regarding Forward Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding economic conditions in general and in the agricultural market, in particular, our sales prospects in light of new products, increased sales and resulting profits, and liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual Report on Form 10-K for the year ended June 30, 2019. New risk factors emerge from time-to-time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except as otherwise required by applicable laws, we undertake no obligation to publicly update or revise any forward-looking statements described in this report, whether as a result of new information, future events, changed circumstances or any other reason after the date this report is filed.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by SEC Rule 13a-15(b), an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive and Financial Officers, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this quarterly report to ensure the information required to be disclosed by us in reports is timely recorded, processed, summarized and reported in accordance with the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

18

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

For information regarding risk factors, see “Part I. Item 1A. Risk Factors,” in our 2019 Annual Report.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

Our Annual Stockholder’s Meeting is scheduled for 10am, Wednesday, December 4, 2019 at 1501 Industrial Rd., Boulder City, NV 89005.

ITEM 6.  EXHIBITS

		Incorporated by Reference			Filed or Furnished
Exhibit #	Exhibit Description	Form	Date	Number	Herewith
3.1	Articles of Incorporation of the Company	8-A12G	10/28/02	3.01
3.2	Certificate of Amendment to the Articles of Incorporation of the Company	8-A12G	10/28/02	3.01
3.3	Certificate of Amendment to the Articles of Incorporation	10-Q	2/14/13	3(i)
3.4	Bylaws of the Company	8-K	9/25/13	3.02
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				Filed
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				Filed
101 INS	XBRL Instance Document
101 SCH	XBRL Taxonomy Extension Schema Document				Filed
101 CAL	XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101 DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101 LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101 PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

19

SIGNATURES

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

Dated:  November 8, 2019

AMERITYRE CORPORATION
By:
/s/ Michael F. Sullivan	/s/ Lynda R. Keeton-Cardno
Michael F. Sullivan Chief Executive Officer (Principal Executive Officer)	Lynda R. Keeton-Cardno Chief Financial Officer (Principal Financial and Accounting Officer)

20

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael F. Sullivan, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Amerityre Corporation for the three months ended September 30, 2019;

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

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

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

(b)           designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on our evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2019

/s/ Michael F. Sullivan              

Michael F. Sullivan

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lynda R. Keeton-Cardno, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Amerityre Corporation for the three months ended September 30, 2019;

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

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

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

(b)           designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on our evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2019

/s/ Lynda R. Keeton-Cardno                  

Lynda R. Keeton-Cardno

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Amerityre Corporation (the “Company”) on Form 10-Q for the three months ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael F. Sullivan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael F. Sullivan                  

Michael F. Sullivan

Chief Executive Officer

(Principal Executive Officer)

November 8, 2019

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Amerityre Corporation (the “Company”) on Form 10-Q for the three months ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynda R. Keeton-Cardno, Chief  Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Lynda R. Keeton-Cardno                  

Lynda R. Keeton-Cardno

Chief Financial Officer

(Principal Financial Officer)

November 8, 2019

XML

Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2019	Jun. 30, 2019
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	2,000,000	2,000,000
Preferred stock, shares outstanding	2,000,000	2,000,000
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	47,727,867	47,727,867
Common stock, shares outstanding	47,727,867	47,727,867

XML

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

3 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  We believe the disclosures and information presented are adequate to make the information not misleading.  These interim condensed financial statements should be read in conjunction with our most recent audited financial statements and notes thereto included in our June 30, 2019 Annual Report on Form 10-K.  Operating results for the quarter ended September 30, 2019 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2020.

XML

NOTE 4 - RIGHT TO USE LEASE ASSETS (Details) - Schedule of Property Subject to or Available for Operating Lease - USD ($)	Sep. 30, 2019	Jun. 30, 2019
Schedule of Property Subject to or Available for Operating Lease [Abstract]
Facility lease	$ 699,750	$ 735,000
Leasehold improvements related to our facility	280,376	280,376
Accumulated amortization – leasehold improvements	(173,182)	(170,120)
Inventory - net	$ 806,944	$ 845,256

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2019	Jun. 30, 2019
Schedule of Share-based Compensation, Stock Options, Activity [Abstract]
Outstanding beginning of period	3,970,000	3,730,000
Outstanding beginning of period	$ 0.12	$ 0.13
Granted	0	480,000
Granted	$ 0.00	$ 0.10
Expired/Cancelled	0	(240,000)
Expired/Cancelled	$ 0.00	$ 0.10
Exercised	0	0
Exercised	$ 0.00	$ 0.00
Outstanding end of period	3,970,000	3,970,000
Outstanding end of period	$ 0.12	$ 0.12
Outstanding end of period	$ 0	$ 0
Exercisable	3,970,000	3,970,000
Exercisable	$ 0.12	$ 0.12
Exercisable	$ 0	$ 0

XML

NOTE 7 - SUBSEQUENT EVENTS

3 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 7. – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed financial statements.

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS (Tables)

3 Months Ended

Sep. 30, 2019

Disclosure Text Block Supplement [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

We estimated the fair value of the stock options above at the grant date based on the following weighted average assumptions:

Risk-free interest rate	2.010	%
Expected life	3.0	years
Expected volatility	114.38	%
Dividend yield	0.00	%

Share-based Payment Arrangement, Option, Activity [Table Text Block]

A summary of the status of our outstanding stock options as of September 30, 2019 and June 30, 2019, and changes during these periods is presented below:

	September 30, 2019						June 30, 2019
			Weighted Average		Intrinsic					Weighted Average		Intrinsic
	Shares		Exercise Price		Value		Shares			Exercise Price		Value
Outstanding beginning of period		3,970,000	$	0.12				3,730,000		$	0.13
Granted		-	$	0.00				480,000		$	0.10
Expired/Cancelled		-	$	0.00				(240,000	)	$	0.10
Exercised		-	$	0.00				-		$	0.00
Outstanding end of period		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-
Exercisable		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at September 30, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2019		Weighted Average Remaining Contractual Life
$	0.08		150,000		2.17	$	0.08		150,000		2.17
$	0.10		2,370,000		1.20	$	0.10		2,370,000		1.20
$	0.17		1,450,000		1.00	$	0.17		1,450,000		1.00
			3,970,000						3,970,000

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS

3 Months Ended

Sep. 30, 2019

Disclosure Text Block Supplement [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 6 - STOCK OPTIONS AND WARRANTS

Prior Issuances of options

On January 1, 2018, 480,000 options were granted to the Company’s Chief Executive Officer as part of his employment offer.  The options have a strike price of $0.10, vest ratably January 1, 2018 to December 31, 2018 and expire December 31, 2021.

We estimated the fair value of the stock options above at the grant date based on the following weighted average assumptions:

Risk-free interest rate	2.010	%
Expected life	3.0	years
Expected volatility	114.38	%
Dividend yield	0.00	%

A summary of the status of our outstanding stock options as of September 30, 2019 and June 30, 2019, and changes during these periods is presented below:

	September 30, 2019						June 30, 2019
			Weighted Average		Intrinsic					Weighted Average		Intrinsic
	Shares		Exercise Price		Value		Shares			Exercise Price		Value
Outstanding beginning of period		3,970,000	$	0.12				3,730,000		$	0.13
Granted		-	$	0.00				480,000		$	0.10
Expired/Cancelled		-	$	0.00				(240,000	)	$	0.10
Exercised		-	$	0.00				-		$	0.00
Outstanding end of period		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-
Exercisable		3,970,000	$	0.12	$	-		3,970,000		$	0.12	$	-

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at September 30, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2019		Weighted Average Remaining Contractual Life
$	0.08		150,000		2.17	$	0.08		150,000		2.17
$	0.10		2,370,000		1.20	$	0.10		2,370,000		1.20
$	0.17		1,450,000		1.00	$	0.17		1,450,000		1.00
			3,970,000						3,970,000

XML

NOTE 4 - RIGHT TO USE LEASE ASSETS (Tables)

3 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Schedule of Property Subject to or Available for Operating Lease [Table Text Block]

Based on our lease accounting policy, we have identified the following operating leases. As of September 30, 2019 we have no financing leases:

	September 30, 2019			June 30,  2019
	(Unaudited)
Facility lease	$	699,750		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(173,182	)		(170,120	)
Right to use leased assets, operating, net	$	806,944		$	845,256

XML

Balance Sheets - USD ($)	Sep. 30, 2019	Jun. 30, 2019
CURRENT ASSETS
Cash	$ 462,684	$ 557,026
Accounts receivable	279,814	277,690
Current inventory - net	531,344	448,407
Prepaid and other current assets	96,872	82,596
Total Current Assets	1,370,714	1,365,719
RIGHT TO USE LEASE ASSETS, OPERATING, NET	806,944	845,256
PROPERTY AND EQUIPMENT
Molds and models	583,611	583,611
Equipment	3,009,188	3,003,797
Furniture and fixtures	73,423	66,173
Software	247,610	247,610
Less – accumulated depreciation	(3,781,379)	(3,763,672)
Total Property and Equipment - net	132,453	137,519
OTHER ASSETS
Patents and trademarks – net	106,177	110,601
Non-current inventory	273,259	269,824
Deposits	11,000	11,000
Total Other Assets	390,436	391,425
TOTAL ASSETS	2,700,547	2,739,919
CURRENT LIABILITIES
Accounts payable and accrued expenses	634,748	649,046
Current portion of long-term debt	13,772	13,609
Current portion of lease liability	142,200	141,000
Deferred revenue	18,404	19,408
Total Current Liabilities	809,124	823,063
Long-term debt	72,413	75,418
Long-term lease liability	557,550	594,000
TOTAL LIABILITIES	1,439,087	1,492,481
STOCKHOLDERS’ EQUITY
Preferred stock: 5,000,000 shares authorized of $0.001 par value, 2,000,000 and 2,000,000 shares issued and outstanding, respectively	2,000	2,000
Common stock: 75,000,000 shares authorized of $0.001 par value, 47,727,867 and 47,727,867 shares issued and outstanding, respectively	47,728	47,728
Additional paid-in capital	62,695,035	62,695,035
Stock payable	10,702	583
Accumulated deficit	(61,494,005)	(61,497,908)
Total Stockholders’ Equity	1,261,460	1,247,438
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 2,700,547	$ 2,739,919

XML

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 28,903	$ 4,317
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization expense	25,194	20,473
Stock based compensation	10,119	9,785
Changes in operating assets and liabilities:
Accounts receivable	(2,124)	53,668
Prepaid and other current assets	(14,276)	(24,768)
Inventory and any change in inventory reserve	(86,372)	(59,953)
Accounts payable and accrued expenses	(39,299)	105,007
Deferred revenue	(1,004)	(14,250)
Net Cash Provided/Used by Operating Activities	(78,859)	94,279
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(12,641)	0
Net Cash Used by Investing Activities	(12,641)	0
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on notes payable	(2,842)	(4,651)
Net Cash Used by Financing Activities	(2,842)	(4,651)
NET (DECREASE) INCREASE IN CASH	(94,342)	89,628
CASH AT BEGINNING OF PERIOD	557,026	213,854
CASH AT END OF PERIOD	462,684	303,482
NON-CASH FINANCING ACTIVITIES
Interest paid	335	1,562
Income taxes paid	0	0
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
Accrued preferred stock dividends	25,000	25,000
Operating lease renewal, decrease in right to use asset and related liability	$ 35,250	$ 0

XML

NOTE 4 - RIGHT TO USE LEASE ASSETS (Details)	3 Months Ended
	Sep. 30, 2019 USD ($)	May 31, 2015 ft² a
NOTE 4 - RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Lessee, Operating Lease, Renewal Term		5 years
Area of Real Estate Property (in Square Feet) | ft²		49,200
Area of Land (in Acres) | a		4.15
Operating Leases, Future Minimum Payments Due	$ 699,750
Building [Member]
NOTE 4 - RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Area of Real Estate Property (in Square Feet) | ft²		5,500
Minimum [Member]
NOTE 4 - RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	11,750
Maximum [Member]
NOTE 4 - RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 12,600

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	3 Months Ended
	Sep. 30, 2019
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract]
Risk-free interest rate	2.01%
Expected life	3 years
Expected volatility	114.38%
Dividend yield	0.00%

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Jun. 30, 2019
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Deferred Revenue, Current	$ 18,404	$ 6,462	$ 19,408
Revenues	$ 979,297	$ 827,244
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)	3,970,000	4,210,000
Shipping and Handling Revenue [Member]
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Revenues	$ 45	$ 1,114

XML

NOTE 4 - RIGHT TO USE LEASE ASSETS

3 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

NOTE 4 – RIGHT TO USE LEASE ASSETS

Based on our lease accounting policy, we have identified the following operating leases. As of September 30, 2019 we have no financing leases:

	September 30, 2019			June 30,  2019
	(Unaudited)
Facility lease	$	699,750		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(173,182	)		(170,120	)
Right to use leased assets, operating, net	$	806,944		$	845,256

In March 2019 we negotiated a five year extension of the lease on our executive office and manufacturing facility located at 1501 Industrial Road, Boulder City, Nevada.  The property consists of a 49,200 square foot building.  We currently occupy all 49,200 square feet, inclusive of approximately 5,500 square feet of office space, situated on approximately 4.15 acres.  Our remaining liability under this agreement is $699,750, payable at amounts ranging from $11,750 to $12,600 a month until June 30, 2024.

XML

Accounting Policies, by Policy (Policies)

3 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain reclassifications, which have no effect on net income in our current presentation, have been made in the first quarter to record leasehold improvements amortization costs to all departments instead of solely to General and Administration. This reclassification was made in order to better reflect the benefit of these expenses.

Revenue [Policy Text Block]

Revenue Recognition

The majority of our revenue is derived from short-term sales contracts. We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”.

Revenue for our products is recognized at the time in which our performance obligation is satisfied which we have defined as “control” of the product by the customer. “Control” is defined as a customer having “rights/obligations of physical control over the product or has the rights and intention to control the product.” Based on the terms of our contracts, a customer’s “control” is based on analysis of the following; (i) when a customer arranges their own shipping, and once the product has left our dock, Amerityre recognizes revenue for the product.  In effect by arranging their own shipping the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange their own shipping we cannot recognize revenue until it is delivered and the customer takes “control” of the product. This establishes a “deferred revenue” event until such time as delivery of the product has been completed and we have proof from the shipper of the delivery (and change in control).

Deferred revenue was $18,404, inclusive of $45 of shipping and handling revenue (see below), as of September 30, 2019.  Deferred revenue was $6,462, inclusive of $1,114 of shipping and handling revenue (see below), as of September 30, 2018. 

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling

Shipping and Handling Fees require that freight costs charged to customers be classified as revenues. Freight expenses are included in costs of sales and are recognized as incurred.  Due to our adoption of ASC 606 as discussed above, we defer the revenues of shipping and handling until the related revenue is also recognized.

The result of this accounting is a deferral of $45 as of September 30, 2019 and $1,114 as of September 30, 2018.

Lessee, Leases [Policy Text Block]

Right to Use Assets – Leases

We account for all Company leases following a multi-step analysis process which includes:

● Analysis of all agreements to determine if a lease exists, inclusive of this analysis is the length of the agreement and amount of the resulting liability. Based on this we have determined the following:

● Assets with a length less than 1 year are not considered leases and,

● Assets with a value of less than our capitalization policy of $2,500 are not considered a lease.

Items that do not qualify as leases are treated similar to service agreements and expensed as incurred.

Once an item qualifies for lease accounting we analyze the item for operating or finance lease treatment with the major difference that finance leases include interest as a term note would. In the case that a finance lease does not have a stated interest rate, we will impute the interest.

Both operating and finance leases result in a right to use asset and related lease liability on our balance sheet.

Items that enhance a lease asset, such as leasehold improvements, are capitalized with the related right to use asset. Amortization of that improvement is based on all known facts inclusive of the lease term. 

Earnings Per Share, Policy [Policy Text Block]

Basic and Fully Diluted Net Income (Loss) Per Share

Basic and Fully Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period.

Our outstanding stock options and warrants and shares issuable upon conversion of outstanding convertible notes have been excluded from the basic and fully diluted net loss per share calculation.  We excluded 3,970,000 and 4,210,000 common stock equivalents for the quarters ended September 30, 2019 and 2018, respectively, because they are anti-dilutive.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

XML

NOTE 5 - DEBT (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 30, 2016	Sep. 30, 2019	Jun. 30, 2019
Notes Payable, Other Payables [Member]
NOTE 5 - DEBT (Details) [Line Items]
Sales Commission, Percentage		5.00%
Debt Instrument, Face Amount		$ 96,000
Long-term Debt, Current Maturities		2,000	$ 2,000
Long-term Debt, Excluding Current Maturities		$ 62,089	$ 62,098
Notes Payable to Banks [Member]
NOTE 5 - DEBT (Details) [Line Items]
Debt Instrument, Face Amount	$ 55,068
Debt Instrument, Interest Rate, Stated Percentage	5.59%
Debt Instrument, Periodic Payment	$ 1,059
Debt Instrument, Term	60 months

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range - $ / shares	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options Outstanding	3,970,000	3,970,000	3,730,000
Number of Options Exercisable	3,970,000
Options at $0.08 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price of Options (in Dollars per share)	$ 0.08
Number of Options Outstanding	150,000
Weighted Average Remaining Contractual Life of Outstanding Options	2 years 2 months 1 day
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.08
Weighted Average Remaining Contractual Life Exercisable Options	2 years 2 months 1 day
Number of Options Exercisable	150,000
Options at $0.10 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price of Options (in Dollars per share)	$ 0.10
Number of Options Outstanding	2,370,000
Weighted Average Remaining Contractual Life of Outstanding Options	1 year 2 months 12 days
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.10
Weighted Average Remaining Contractual Life Exercisable Options	1 year 2 months 12 days
Number of Options Exercisable	2,370,000
Options at $0.17 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price of Options (in Dollars per share)	$ 0.17
Number of Options Outstanding	1,450,000
Weighted Average Remaining Contractual Life of Outstanding Options	1 year
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.17
Weighted Average Remaining Contractual Life Exercisable Options	1 year
Number of Options Exercisable	1,450,000

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies disclosed herein have not changed since our audited financial statements and notes thereto included in our June 30, 2019 Annual Report on Form 10-K, except as noted below.

Reclassifications

Certain reclassifications, which have no effect on net income in our current presentation, have been made in the first quarter to record leasehold improvements amortization costs to all departments instead of solely to General and Administration. This reclassification was made in order to better reflect the benefit of these expenses.

Revenue Recognition

The majority of our revenue is derived from short-term sales contracts. We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”.

Revenue for our products is recognized at the time in which our performance obligation is satisfied which we have defined as “control” of the product by the customer. “Control” is defined as a customer having “rights/obligations of physical control over the product or has the rights and intention to control the product.” Based on the terms of our contracts, a customer’s “control” is based on analysis of the following; (i) when a customer arranges their own shipping, and once the product has left our dock, Amerityre recognizes revenue for the product.  In effect by arranging their own shipping the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange their own shipping we cannot recognize revenue until it is delivered and the customer takes “control” of the product. This establishes a “deferred revenue” event until such time as delivery of the product has been completed and we have proof from the shipper of the delivery (and change in control).

Deferred revenue was $18,404, inclusive of $45 of shipping and handling revenue (see below), as of September 30, 2019.  Deferred revenue was $6,462, inclusive of $1,114 of shipping and handling revenue (see below), as of September 30, 2018. 

Shipping and Handling

Shipping and Handling Fees require that freight costs charged to customers be classified as revenues. Freight expenses are included in costs of sales and are recognized as incurred.  Due to our adoption of ASC 606 as discussed above, we defer the revenues of shipping and handling until the related revenue is also recognized.

The result of this accounting is a deferral of $45 as of September 30, 2019 and $1,114 as of September 30, 2018.

Right to Use Assets – Leases

We account for all Company leases following a multi-step analysis process which includes:

● Analysis of all agreements to determine if a lease exists, inclusive of this analysis is the length of the agreement and amount of the resulting liability. Based on this we have determined the following:

● Assets with a length less than 1 year are not considered leases and,

● Assets with a value of less than our capitalization policy of $2,500 are not considered a lease.

Items that do not qualify as leases are treated similar to service agreements and expensed as incurred.

Once an item qualifies for lease accounting we analyze the item for operating or finance lease treatment with the major difference that finance leases include interest as a term note would. In the case that a finance lease does not have a stated interest rate, we will impute the interest.

Both operating and finance leases result in a right to use asset and related lease liability on our balance sheet.

Items that enhance a lease asset, such as leasehold improvements, are capitalized with the related right to use asset. Amortization of that improvement is based on all known facts inclusive of the lease term. 

Basic and Fully Diluted Net Income (Loss) Per Share

Basic and Fully Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period.

Our outstanding stock options and warrants and shares issuable upon conversion of outstanding convertible notes have been excluded from the basic and fully diluted net loss per share calculation.  We excluded 3,970,000 and 4,210,000 common stock equivalents for the quarters ended September 30, 2019 and 2018, respectively, because they are anti-dilutive.

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC, did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

XML

Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
NET SALES	$ 979,297	$ 827,244
COST OF REVENUES	690,599	561,012
GROSS PROFIT	288,698	266,232
EXPENSES
Research and development	26,016	23,073
Sales and marketing	43,471	50,924
General and administrative	193,430	189,548
Total Expenses	262,917	263,545
INCOME FROM OPERATIONS	25,781	2,687
OTHER INCOME (EXPENSE)
Interest income	174	103
Interest expense	(335)	(1,562)
Other income	3,283	3,089
Total Other Income, net	3,122	1,630
NET INCOME	28,903	4,317
Preferred Stock Dividend	(25,000)	(25,000)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 3,903	$ (20,683)
BASIC AND DILUTED INCOME (LOSS) PER SHARE (in Dollars per share)	$ 0.00	$ 0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (in Shares)	47,727,867	44,514,035

XML

NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) - Chief Executive Officer [Member]	Jan. 01, 2018 $ / shares shares
NOTE 6 - STOCK OPTIONS AND WARRANTS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	480,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Option Exercise Price | $ / shares	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Date	Jan. 01, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date	Dec. 31, 2018

XML

Document And Entity Information - shares	3 Months Ended
	Sep. 30, 2019	Nov. 08, 2019
Document Information Line Items
Entity Registrant Name	AMERITYRE CORPORATION
Document Type	10-Q
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		47,727,867
Amendment Flag	false
Entity Central Index Key	0000945828
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-50053
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	87-0535207
Entity Address, Address Line One	1501 Industrial Rd
Entity Address, City or Town	Boulder City
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89005
City Area Code	702
Local Phone Number	293-1930
Entity Interactive Data Current	Yes

XML

Statements of Stockholders’ Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Stock Payable [Member]	Retained Earnings [Member]
Balance at Jun. 30, 2018	$ 2,000	$ 44,476	$ 62,638,754	$ 14,601	$ (61,438,920)
Balance (in Shares) at Jun. 30, 2018	2,000,000	44,476,346
Preferred stock dividends					(25,000)
Stock option based compensation expense – options			2,901
Stock based compensation expense for employee and Board of Director service		$ 1,156	18,035	(4,806)
Stock based compensation expense for employee and Board of Director service (in Shares)		1,155,796
Net income (loss) for the quarter					4,317
Balance at Sep. 30, 2018	$ 2,000	$ 45,632	62,659,690	9,795	(61,459,603)
Balance (in Shares) at Sep. 30, 2018	2,000,000	45,632,142
Preferred stock dividends					(25,000)
Stock option based compensation expense – options			967
Stock based compensation expense for employee and Board of Director service		$ 901	15,336	(9,212)
Stock based compensation expense for employee and Board of Director service (in Shares)		900,725
Net income (loss) for the quarter					(94,744)
Balance at Dec. 31, 2018	$ 2,000	$ 46,533	62,675,993	583	(61,579,347)
Balance (in Shares) at Dec. 31, 2018	2,000,000	46,532,867
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service				10,119
Net income (loss) for the quarter					69,879
Balance at Mar. 31, 2019	$ 2,000	$ 46,533	62,675,993	10,702	(61,534,468)
Balance (in Shares) at Mar. 31, 2019	2,000,000	46,532,867
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service		$ 1,195	19,042	(10,118)
Stock based compensation expense for employee and Board of Director service (in Shares)		1,195,000
Net income (loss) for the quarter					61,560
Balance at Jun. 30, 2019	$ 2,000	$ 47,728	62,695,035	583	(61,497,908)
Balance (in Shares) at Jun. 30, 2019	2,000,000	47,727,346
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service				10,119
Net income (loss) for the quarter					28,903
Balance at Sep. 30, 2019	$ 2,000	$ 47,728	$ 62,695,035	$ 10,702	$ (61,494,005)
Balance (in Shares) at Sep. 30, 2019	2,000,000	47,727,867

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NOTE 3 - INVENTORY

3 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 3 - INVENTORY

Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or net realizable value.  The inventory consists primarily of chemicals, finished goods produced in our plant and products purchased for resale.

	September 30, 2019			June 30, 2019
	(Unaudited)
Raw Materials	$	221,363		$	221,767
Finished Goods		650,716			557,977
Inventory reserve		(67,476	)		(61,513	)
Inventory – net (current and long term)	$	804,603		$	718,231

Our inventory reserve reflects items that were deemed to be defective or obsolete based on an analysis of all inventories on hand.

The Company critically reviews all slow moving inventory to determine if it is defective or obsolete.  If not defective or obsolete we presented these items as non-current inventory, although all inventory is ready and available for sale at any moment.  

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NOTE 5 - DEBT

3 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 5 - DEBT

A former board member, Silas O. Kines, who passed away on January 11, 2012, was also the principal owner of Forklift Tire of Florida and K-2 Industrial Tire, Inc.  In accordance with the Commission Agreement with Forklift Tire of Florida, dated February 2, 2011, between Amerityre Corporation and K-2 Industrial Tire, Inc., K-2 is due a five percent (5%) commission on all forklift tire sales.  In exchange for the forklift models transferred to Amerityre under that agreement, the first $96,000 in commission payments will be used to extinguish the long term liability recorded on the transaction.  As of September 30, 2019, $2,000 and $62,098 (June 30, 2019, $2,000 and $62,089) were recorded for the current and long-term portion, respectively, of the related liability.

In June 2016, the Company executed a term note with U.S. Bank to finance critical manufacturing equipment and operating enhancements.  The total amount financed was $55,068, at 5.59% interest, with payments of $1,059 due for 60 months starting July 2016. This note was paid in full in October 2019. 

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NOTE 3 - INVENTORY (Tables)

3 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory [Table Text Block]

Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or net realizable value.  The inventory consists primarily of chemicals, finished goods produced in our plant and products purchased for resale.

	September 30, 2019			June 30, 2019
	(Unaudited)
Raw Materials	$	221,363		$	221,767
Finished Goods		650,716			557,977
Inventory reserve		(67,476	)		(61,513	)
Inventory – net (current and long term)	$	804,603		$	718,231

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NOTE 3 - INVENTORY (Details) - Schedule of Inventory - USD ($)	Sep. 30, 2019	Jun. 30, 2019
Schedule of Inventory [Abstract]
Raw Materials	$ 221,363	$ 221,767
Finished Goods	650,716	557,977
Inventory reserve	(67,476)	(61,513)
Inventory – net (current and long term)	$ 804,603	$ 718,231