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:   March 31, 2020

☐ 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 ROAD, BOULDER CITY, NEVADA	89005
(Address of principal executive offices)	(Zip Code)

(702) 293-1930

(Issuer’s telephone number)

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

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 large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

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

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  ☒

The number of shares outstanding of Registrant’s Common Stock as of May 15, 2020: 68,922,868   

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.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
SIGNATURES		21

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

AMERITYRE CORPORATION

Balance Sheets

	March 31, 2020			June 30, 2019
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	421,653		$	557,026
Accounts receivable		392,764			277,690
Inventory - net		584,544			448,407
Prepaid and other current assets		119,437			82,596
Total Current Assets		1,518,398			1,365,719
RIGHT TO USE LEASE ASSETS, OPERATING, NET		730,320			845,256
PROPERTY AND EQUIPMENT
Molds and models		583,611			583,611
Equipment		3,033,823			3,003,797
Furniture and fixtures		73,423			66,173
Software		247,610			247,610
Less - accumulated depreciation		(3,816,853	)		(3,763,672	)
Total Property and Equipment - net		121,614			137,519
OTHER ASSETS
Patents and trademarks - net		97,328			110,601
Non-current inventory		255,702			269,824
Deposits		11,000			11,000
Total Other Assets		364,030			391,425
TOTAL ASSETS	$	2,734,362		$	2,739,919
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	662,922		$	649,046
Current portion of long-term debt		2,000			13,609
Current portion of lease liability		144,600			141,000
Deferred revenue		6,275			19,408
Total Current Liabilities		815,797			823,063
Long-term debt, net of current portion		61,906			75,418
Long-term lease liability		484,650			594,000
TOTAL LIABILITIES		1,362,353			1,492,481
STOCKHOLDERS’ EQUITY
Preferred stock: 5,000,000 shares authorized of $0.001 par value, 2,000,000 shares issued and outstanding, respectively		2,000			2,000
Common Stock: 75,000,000 shares authorized of $0.001 par value, 48,922,868 and 47,727,867 shares issued and outstanding, respectively		48,923			47,728
Additional paid-in capital		62,714,077			62,695,035
Stock payable		12,323			583
Accumulated deficit		(61,405,314	)		(61,497,908	)
Total Stockholders’ Equity		1,372,009			1,247,438
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,734,362		$	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 March 31,						For the Nine Months Ended March 31,
	2020			2019			2020			2019
NET SALES	$	1,121,805		$	926,811		$	3,168,542		$	2,539,160
COST OF GOODS SOLD		768,943			637,804			2,228,300			1,836,081
GROSS PROFIT		352,862			289,007			940,242			703,079
EXPENSES
Research and development		26,614			23,297			88,527			71,087
Sales and marketing		52,652			43,184			147,432			147,433
General and administrative		173,297			168,984			539,663			522,427
Total Expenses		252,563			235,465			775,622			740,947
INCOME/(LOSS) FROM OPERATIONS		100,299			53,542			164,620			(37,868	)
OTHER INCOME/(EXPENSE)
Interest expense		(785	)		(711	)		(1,223	)		(3,049	)
Interest income		286			86			579			318
Other income		496			16,962			3,618			20,051
Total Other Income/(Expense), net		(3	)		16,337			2,974			17,320
NET INCOME/(LOSS)		100,296			69,879			167,594			(20,548	)
Preferred Stock Dividend		(25,000	)		(25,000	)		(75,000	)		(75,000	)
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	75,296		$	44,879		$	92,594		$	(95,548	)
BASIC AND DILUTED INCOME/(LOSS) PER SHARE	$	0.00		$	0.00		$	0.00		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		48,260,422			46,532,867			48,301,467			45,638,048

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		47,727,867		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	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock based compensation expense for employee and Board of Director service		-		-		1,195,001		1,195		19,042		(10,702	)		-
Net income for the quarter		-		-		-		-		-		-			38,395
Balance, December 31, 2019		2,000,000	$	2,000		48,922,868	$	48,923	$	62,714,077	$	-		$	(61,480,610	)
Preferred stock dividends		-		-		-		-		-		-			(25,000	)
Stock based compensation expense for employee and Board of Director service		-		-		-		-		-		12,323			-
Net income for the quarter		-		-		-		-		-		-			100,296
Balance, March 31, 2020		2,000,000	$	2,000		48,922,868	$	48,923	$	62,714,077	$	12,323		$	(61,405,314	)

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

5

AMERITYRE CORPORATION

Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended March 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	167,594		$	(20,548	)
Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities:
Depreciation and amortization expense		181,390			65,282
Stock based compensation		31,977			27,897
Changes in operating assets and liabilities:
Accounts receivable		(115,074	)		(56,417	)
Inventory and inventory reserve		(122,015	)		(40,260	)
Prepaid and other current assets		(36,841	)		(15,737	)
Accounts payable and accrued expenses		(61,124	)		187,805
Deferred revenue		(13,133	)		40,318
Lease liability payable, operating lease		(105,750	)		-
Net Cash (Used) Provided by Operating Activities		(72,976	)		188,340
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and equipment		(37,276	)		(21,436	)
Cash paid for leasehold improvements of an operating lease asset		-			(78,302	)
Net Cash Used by Investing Activities		(37,276	)		(99,738	)
CASH FLOWS USED IN FINANCING ACTIVITIES
Payments on notes payable		(25,121	)		(14,065	)
NET INCREASE (DECREASE) IN CASH		(135,373	)		74,537
CASH AT BEGINNING OF PERIOD		557,026			213,854
CASH AT END OF PERIOD	$	421,653		$	288,391

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
Interest paid	$	1,223	$	3,049
Income taxes paid	$	-	$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued preferred stock dividends	$	75,000	$	75,000
Issuance of common stock previously accrued for	$	583	$	35,427
Application of last payment of lease liability prepaid in previous period	$	-	$	726
Reclassification of accrued expense to stock payable	$	-	$	7,500
Recognition of operating lease right to use asset and related liability	$	-	$	172,500

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

6

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

March 31, 2020

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 Annual Report on Form 10-K for the fiscal year ended June 30, 2019 (the “2019 Annual Report”).  Operating results for the fiscal quarter ended March 31, 2020 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 therein have not changed since our audited financial statements and notes thereto included in our 2019 Annual Report, except as noted below.

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 shipment of product themselves, and once the product has left our dock, Amerityre Corporation (the “Company” or “Amerityre”), recognizes revenue for the product.  In effect by arranging their own freight, the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange shipment of product themselves, 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 $6,275, inclusive of $945 of shipping and handling revenue (see below), as of March 31, 2020.  Deferred revenue was $61,030 inclusive of $4,879 of shipping and handling revenue as of March 31, 2019.

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 $945 as of March 31, 2020 and $4,879 as of March 31, 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 analysis we then would asses:

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

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

7

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

March 31, 2020

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 such 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 income (loss) per share calculation.  We excluded 2,870,000 and 6,360,000 common stock equivalents for the periods ended March 31, 2020 and 2019, respectively, because they are anti-dilutive as our closing stock price at the period end was lower than the strike price of options outstanding.

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the Financial Accounting Standards Board (“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.

	March 31, 2020			June 30, 2019
	(Unaudited)
Raw Materials	$	251,244		$	221,767
Finished Goods		673,684			557,977
Inventory reserve		(84,682	)		(61,513	)
Inventory - net	$	840,246			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.  

NOTE 4 – RIGHT TO USE LEASE ASSETS

Based on our lease accounting policy, we have identified the following operating leases. As of March 31, 2020, we have no financing leases:

	March 31, 2020			June 30, 2019
	(Unaudited)
Facility lease	$	629,250		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(179,306	)		(170,120	)
Right to use leased assets, operating, net	$	730,320		$	845,256

8

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

March 31, 2020
 

In March 2019 we negotiated a five-year extension of the lease for 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 $629,250, 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, was 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 March 31, 2020, $2,000 and $61,906 (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. 

In February 2020, the Company secured a $50,000 line of credit with a local community bank. As of March 31, 2020, the line had not been used.

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 an exercise 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 March 31, 2020 and June 30, 2019 and changes during the periods then ended is presented below:

	March 31, 2020								June 30, 2019
				Weight Average			Intrinsic					Weight 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		(1,100,000	)	$	(0.14	)				(240,000	)	$	(0.10	)
Exercised		-		$	0.00					-		$	0.00
Outstanding end of period		2,870,000		$	0.12		$	-		3,970,000		$	0.12		$	-
Exercisable		2,870,000		$	0.12		$	-		3,970,000		$	0.12		$	-

9

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

March 31, 2020

The following table summarizes the range of outstanding and exercisable options as of March 31, 2020:

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at March 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at March 31, 2020		Weighted Average Remaining Contractual Life
$	0.08		150,000		1.67	$	0.08		150,000		1.67
$	0.10		1,920,000		0.94	$	0.10		1,920,000		0.94
$	0.17		800,000		1.17	$	0.17		800,000		1.17
			2,870,000						2,870,000

NOTE 7 – STOCK TRANSACTIONS

After an analysis of the above stock options expiration and in association with the Company’s desire to retain its Chief Executive Officer, the Board of Directors approved the termination of the 2017 Omnibus Stock Option and Award Plan on December 4, 2019. Any stock instrument available but unencumbered under this plan was also released.

On December 4, 2019, the Board of Directors adopted the 2019 Equity Incentive Plan which contains provisions for up to 2,500,000 stock-based instruments to be granted to employees, consultants and directors.

On December 18, 2019, the Company renewed the Chief Executive Officer’s Employment Agreement.  The new Agreement extends his term of employment to December 31, 2020.  Inclusive in this new Agreement is a stock award of 1.98 million shares of the Company’s common stock vesting ratably over 12 months (January 2020 – December 2020), valued at a fixed rate of $0.0192, the average price per share of the Company’s common stock for the period December 24, 2019 to December 31, 2019. 

On January 22, 2020, 60,000 shares of common stock were granted to the Company’s Chief Financial Officer as part of her employment renewal.  The shares are valued as of January 21, 2020 and vest ratably on a quarterly basis through December 2020.  No additional changes were made to her compensation on renewal of her employment.

On January 24, 2020, 460,000 shares of common stock were granted to the Company’s Board members as compensation for the term ending November 2020.  Each non-executive Board member receives 93,750 shares, with the Audit Committee Chair receiving 156,250 shares and the Compensation Committee Chair receiving 116,250 shares.  The shares vest ratably on a monthly basis over the January 2020 – November 2020 period. The shares are valued at $0.02, the closing price per share of our common stock on January 24, 2020. 

NOTE 8 – SUBSEQUENT EVENTS

In April 2020, the Company secured a loan from the Small Business Administration Paycheck Protection Program. The loan amount is $149,570 and has a term of 2 years at 1% interest. Per the terms of the loan, the first payment is expected on or about November 15, 2020.

In April 2020, the Company modified, and filed with the State of Nevada, its 2013 Series Convertible Preferred Stock Designation of Rights (the “Designation of Rights”). The modification removed section 3.06 of the original Designation of Rights, which involved limitations on the automatic conversion of Preferred Stock to common stock.   

In May 2020, the outstanding Preferred Shares automatically converted to 20,000,000 shares of common stock in accordance with the Designation of Rights conversion provisions.

10

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

The following discussion and analysis contain forward-looking statements 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 the Risk Factors contained in our 2019 Annual Report as well as those discussed elsewhere in this report.  The historical results set forth in this discussion and analysis 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 solid polyurethane foam 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.

Our strategy continues to be based on focusing resources on the development of market segments where we have identified technological and product performance advantages. Top line sales revenue growth in the fiscal 2020 3rd quarter was 21.9% higher than the third quarter of fiscal 2019. Costs for raw materials remained stable during the fiscal third quarter of 2020. We continue to broaden our customer base while working to increase product sold to existing customers. With the US economy facing a major downturn in the coming months due to the COVID-19 pandemic, weakness in the overall economy remains a significant risk factor in the last quarter of fiscal year 2020 as well as fiscal year 2021.

To date, we have been successful in continuing to operate our business as a supplier to essential businesses. We have implemented social distancing in our workplace and implemented new work practices for cleaning work areas. These measures have not impacted the performance of our plant, and none of our employees have been infected. We have had some customers inform us that their business has slowed due to mandated business closures, and as a result their Amerityre orders will be reduced and/or delayed. Our suppliers have told us they do not expect any issues with supplying us raw materials when we require them. Several customers have requested additional time to pay their bills but currently all customer account balances are paid.

We continue to 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 continued to experience strong demand for our polyurethane foam tires in the fiscal 2020 third quarter, exceeding our expectations. Higher sales were driven by a strong overall economy for the majority of the quarter, as well as seasonal factors that have traditionally boosted sales this time of year. The Coronavirus pandemic did not adversely affect our fiscal 2020 third quarter results, however, we expect there will be an adverse effect on demand for our product in fiscal 2020 4^th quarter, as the USA and many parts of the world face an historical drop-in economic activity. At this time, it is not possible to estimate the exact magnitude of the revenue drop we will experience, but we expect that our sales will be adversely affected for at least the next 2 fiscal quarters.

Polyurethane Elastomer Industrial Tires – We had negligible sales of elastomer forklift and elastomer industrial tires during the fiscal 2020 third quarter. We continue to generate interest in our elastomer tires produced in our Elastothane^TM 500 formulation. Our trial programs for these tires continues to generate interest in various market segments.

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Agricultural Tires – Agricultural tires sales continue to remain under pressure due to international trade issues and low farm incomes. The recent breakout of the Coronavirus pandemic has introduced another significant headwind to the Agricultural sector. Adding to these factors, the collapse in oil prices has reduced demand for and the price of ethanol, which will further reduce demand for corn. We continue to have discussions with original equipment manufacturers (OEMs) and distributors to identify new opportunities for our elastomer products, but lack of demand from the farming community will continue to depress demand for our products in the Agricultural sector.

Due to the Company’s limited resources and the current business climate, business development projects which require significant investment have been put on hold. We believe investment in new and improved products is important to the continued growth of our business, and we will continue to selectively invest in promising opportunities that fit our current financial plan.

As described above, our product line covers a wide range of 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 strategy of targeted marketing campaigns, custom product development, and proper product pricing continue to drive more profitable sales.  Our website remains a valuable tool for educating our customers about our products.

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 costs 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 and stock option awards issued to employees and consultants for services performed for the Company.

The Company recently borrowed $149,570 under the Small Business Administration Paycheck Protection Program and will be working with the Small Business Administration starting first quarter fiscal year 2021 on forgiveness provisions. This sum likely be recognized as income in the second quarter of fiscal 2021.

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.

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 they 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.

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Valuation of Intangible Assets and Goodwill

Patent and trademark costs have been capitalized at March 31, 2020, totaling $487,633 with accumulated amortization of $390,305 for a net book value of $97,328. Patent and trademark costs capitalized at March 31, 2019, totaled $487,633 with accumulated amortization of $372,172 for a net book value of $115,461.

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 March 31, 2020, and 2019, 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 three and nine month periods ended March 31, 2020 and 2019, respectively.

Amortization expense for the nine month ended March 31, 2020 and 2019 was $13,273 and $17,144 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.

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 March 31, 2020 and 2019 with respect to certain key financial measures.  The comparisons illustrated in the table are discussed in greater detail below. 

	For the Three Months Ended March 31,									For the Nine Months Ended March 31,
	(in 000’s)						Change			(in 000’s)						Change
	2020			2019			2020 vs. 2019			2020			2019			2020 vs. 2019
Net revenues	$	1,122		$	927			21.0	%	$	3,169		$	2,539			24.8	%
Cost of revenues		(769	)		(638	)		20.5	%		(2,229	)		(1,836	)		21.4	%
Gross profit		353			289			22.1	%		940			703			33.7	%
Research & Development		(27	)		(23	)		17.4	%		(89	)		(71	)		25.4	%
Sales and Marketing		(53	)		(43	)		23.3	%		(147	)		(147	)		0.0	%
General and Administrative		(173	)		(169	)		2.4	%		(539	)		(522	)		3.3	%
Other income (expense)		-			16			(100.	%)		3			16			(82.4	%)
Net income (loss)		100			70			44.9	%		168			(21	)		(940.0	%)
Preferred stock dividend		(25	)		(25	)		0.00	%		(75	)		(75	)		0.0	%
Net income (loss) attributable to common shareholders	$	75		$	45			70.5	%	$	93		$	(96	)		(197.9	%)

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Quarter Ended March 31, 2020 Compared to March 31, 2019

Net Revenues.  Net revenues of $1,121,805 for the quarter ended March 31, 2020, represents a 21.0% increase over net revenues of $926,811 for the same period in 2019. These better than expected results were driven by higher polyurethane foam tires from current customers. We expect our polyurethane foam products to continue to account for the majority of our sales during the upcoming fiscal quarter.

Cost of Revenues.  Cost of revenues for the quarter ended March 31, 2020 was $768,943 or 68.5% of sales compared to $637,804 or 68.8% of sales for the same period in 2019 We anticipate that raw material cost volatility will remain stable for the rest of fiscal year 2020, with no additional costs associated with trade tariffs.  

Gross Profit.  Gross profit for the quarter ended March 31, 2020 was $352,862 compared to $289,007 for the same period in 2019. Gross profit for the quarter ended March 31, 2020 increased by $63,855 or 22.1% over the same period in 2019 due to higher revenues.  The March 31, 2020 gross margin of 31.5 was slightly higher than the 31.2% achieved in the same period in 2019.

Research & Development Expenses (R&D).  Research and development expenses for the quarter ended March 31, 2020 were $26,614 compared to $23,297 for the same period in 2019.

Sales & Marketing Expenses. Sales and marketing expenses for the quarter ended March 31, 2020 were $52,652 compared to $43,184 for the same period in 2019. The difference between periods is due to increased commissions expense.

General & Administrative Expenses.  General and administrative expenses for the quarter ended March 31, 2020 were $173,297 compared to $168,984 for the same period in 2019.

Other Income (Expense), net.  Other expense, net, for the quarter ended March 31, 2020 was ($3) compared to other income, net, of $16,337 for the same period in 2019. The primary driver of this variance is lower interest expense due to the payoff of debt offset by the absence of the receipt of a USDA federal grant for building lighting upgrades in 2019.

Net Income.  Net income for the quarter ended March 31, 2020 of $100,296 compared to $69,879 for the same period in 2019, an increase in net income of $30,417.

Nine Months Ended March 31, 2020 Compared to March 31, 2019

Net Revenues.  Net revenues of $3,168,542 for the nine-month period ended March 31, 2020, represents a 24.8% increase over net revenues of $2,539,160 for the same period in 2019. These results were above our expectations and driven by increased demand for polyurethane foam tires from current customers.

Cost of Revenues.  Cost of revenues for the nine-month period ended March 31, 2020 was $2,228,300 or 70.3% of sales compared to $1,836,081 or 72.3% of sales for the same period in 2019. The Gross margin of 29.66% for the nine months ending March 31, 2020 was approximately 2% higher than the 27.69% from the same period in 2019, and was driven by sales of higher margin products. We expect raw material costs to remain steady in the FY 2020 4^th quarter. 

Gross Profit.  Gross profit for the nine-month period ended March 31, 2020 was $940,242 compared to $703,079 for the same period in 2019, an increase of $237,163 or 33.7% over the same period in 2019.

Research & Development Expenses (R&D).  Research and development expenses for the nine-month period ended March 31, 2020 were $88,527 compared to $71,087 for the same period in 2019. The higher expenses in the fiscal year 2020 period are due to costs associated with payroll and our new bike tire evaluation and test program. The Company plans to continue to invest in R&D as a key component of our new product and business improvement initiatives.

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Sales & Marketing Expenses. Sales and marketing expenses for the nine-month period ended March 31, 2020 were $147,432 compared to $147,433 for the same period in 2019.

General & Administrative Expenses.  General and administrative expenses for the nine-month period ended March 31, 2020 were $539,663 compared to $522,427 for the same period in 2019. The difference between periods was due to higher payroll costs, planned higher legal costs related to the engagement of new SEC counsel, offset by lower repairs, amortization and depreciation expenses.

Other Income, net.  Other income for the nine-month period ended March 31, 2020 was $2,974 compared to $17,320 for the same period in 2019. The primary driver in this variance is lower interest expense due to the payoff of debt offset by the absence of the receipt of a USDA federal grant for building lighting upgrades in 2019.

Net Income (Loss).  Net income for the nine-month period ended March 31, 2020 of $167,594 compared to a net loss of $20,548 for the same period in 2019, an increase in positive net income of $188,142.

Liquidity and Capital Resources

Cash Flows

The following table sets forth a summary of our cash flows for the periods below. 

	Nine Months ended Mar. 31,
	(in 000’s)
	2020			2019
Net cash (used) provided by operating activities	$	(73	)	$	188
Net cash used in investing activities		(37	)		(100	)
Net cash used in financing activities		(25	)		(14	)
Net (decrease) increase in cash during the period	$	(135	)	$	74

Net Cash Provided/(Used) by Operating Activities. In 2019, the Company decided to use a portion of its available cash to make a lump sum payment for annual insurance premiums rather than finance these expenditures over the course of the year. As a result, our prepaid assets increased in the period. Finished good inventories were higher than normal at the end of the FY 2020 third quarter due to an inventory build of product which we shipped in the first week of April 2020. In addition, our receivable balance at period end was high, much of which has subsequently been collected; offset by a lower accounts payable and accrued expense balance at period end. Net cash used in operating activities was $72,976 for the period ended March 31, 2020 compared to net cash provided by operating activities of $188,340 for the same period in 2019. 

Non-cash items include depreciation and amortization and stock-based compensation.  Amortization includes the amortization of our right to use asset, our facility rent. Our net income was $167,594 for the period ended March 31, 2020 compared to a net loss of $20,548 for the same period in 2019.  The net income for the period ended March 31, 2020 included non-cash expenses for depreciation and amortization of $181,390 and stock-based compensation of $31,977.  As of March 31, 2019, depreciation and amortization was $65,282 and stock-based compensation totaled $27,897.

Net Cash Used by Investing Activities.  Net cash used by investing activities was $37,276 for the period ended March 31, 2020 and $99,738 for the same period in 2019.  In fiscal year 2020, we invested in manufacturing equipment and upgraded our in-house computer infrastructure and server. In fiscal year 2019, we upgraded our plant lightening.

Net Cash Used by Financing Activities.  In line with the Company’s initiative to pay off high interest term debt with available cash, a total of $25,121 was used in financing activities for the period ended March 31, 2020 and $14,065 for the same period in 2019. The use of cash for the period ended March 31, 2020 was used to retire all of our term debt early.

Our principal sources of liquidity consist of cash and payments received from our customers.  In February 2020, the Company secured a $50,000 line of credit with a local community bank. As of March 31, 2020, the line had not been used. In April 2020, the Company secured a Small Business Administration Paycheck Protection Program loan for $149,570, which has a term of 2 years at 1% interest. The first payment is expected to be due on or about November 15, 2020. However, an analysis of the terms of the loan leads management to conclude that it is likely that the Company can meet all requirements necessary to have this loan forgiven before any loan payments need to be made.

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Historically, management has been reluctant to pursue financing at terms that subject the Company to the high costs of debt, or raise money through the sale of equity at prices we believe do not reflect the true value of the Company. 

As part of its effort to maintain adequate working capital levels, Amerityre has not declared dividends on its preferred stock since June 2016. These unpaid dividends have accrued in the amount of $25,000 per quarter since that time. The preferred stock automatically converted on May 13, 2020 into 20,000,000 shares of common stock.

We continue to have access to 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 of March 31, 2020, we have not needed to activate this financing option due to increased focus on enforcement of established collection policies and proactive communication with customers.

Cash Position, Outstanding Indebtedness and Future Capital Requirements

At May 13, 2020, our total cash balance was $640,124, none of which is restricted; accounts receivables was $206,069; and inventory, net of reserves for slow moving or obsolete inventory, and other current assets was $655,795. Our total indebtedness, which management reviews for cash management, was $1,343,271 and includes $1,129,795 in accounts payable, accrued expenses and operating lease liability; $2,000 in current portion of long-term debt and $61,906 in long-term debt; and $149,570 in Paycheck Protection Program funding.

We continue to take actions to improve our liquidity and access to capital resources. To fully execute the annual strategic business plan discussed during our shareholder meeting in December 2019, we require more capital resources. However, management continues to maintain that an equity financing in the current market environment would be too dilutive and not in the best interests of our shareholders. We have been successful in securing a line of credit with our bank, and additional financing was secured in April 2020 from the US government Paycheck Protection Program, a Small Business Administration loan program initiated to combat the negative effects of the novel coronavirus (COVID-19) on US small businesses. These new sources of liquidity will be key tools to help the Company overcome negative effects of the coronavirus on our business.

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. We believe that the Company’s emphasis on proper product pricing and new marketing campaigns has driven more profitable sales. 

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 March 31, 2020, 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.  We expect to limit manufacturing and sales operation investments beyond the current level until the negative effects of the COVID-19 pandemic can be quantified and addressed. Although we believe that the economy will ultimately improve over this 12 month period, we cannot assure you that the economy will rebound as anticipated. If either the pandemic does not sufficiently abate or the economic consequences are more severe, we may lack sufficient working capital to meet our needs for the next 12 months.

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 May 15 2020, the Company has approximately 707,000 shares of common stock authorized and available for issuance.

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.

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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 the negative impact of COVID-19 on our business and the economy, economic conditions in general and in the agricultural market in particular, tariffs imposed by China and the US arising from the current geo-political tension between those jurisdictions, our ability to increase our authorized capital and pursue future financings, our sales prospects in light of new products, increased sales and resulting profits, continued strength of our current polyurethane foam tire market segment, our ability to timely obtain raw materials at reasonable costs and in sufficient quantities to manufacture products and meet consumer demand, our ability to have a portion of our Paycheck Protection Program loan forgiven and the amount that will ultimately be forgiven, 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 2019 Annual Report and the COVID-19 risk factor in this report. 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 SEC’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 a 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 Securities Exchange Act of 1934 and the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

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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. We also have the following information regarding additional risk factors:

Public health epidemics or outbreaks, such as COVID-19, could materially and adversely impact our business.

In December 2019, a novel strain of coronavirus (COVID-19 emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread throughout the world and infections have been reported globally.

Because COVID-19 infections have been reported throughout the United States, federal, state and local governmental authorities have issued stay-at-home orders (which vary at the state and local level), proclamations and/or directives aimed at minimizing the spread of COVID-19. Additionally, more restrictive proclamations and/or directives may be issued in the future. To date, Amerityre has continued normal operations as we provide products which support essential businesses and operations. However, there is no guarantee that we will be able to continue regular operations going forward in light of COVID-19. These government restrictions have also negatively impacted the operations of some of our customers, leading to delay and/or cancellation of orders and uncertain order levels going forward. There is also a risk that some customers may not be able to pay for Amerityre products already shipped due to reductions in their revenues and a deterioration of their financial position as a result of COVID-19.

The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 pandemic and government restrictions and other effects thereof, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, the Company, or our customers may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations and revenue. Further, we cannot be certain when businesses will begin hiring back unemployed workers and the extent to which workers may elect to remain on unemployment insurance where they make more money not working. All of these factors may affect supply chains which can impact our needs to fill customer orders and reduce demand for our products. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results of operations.

The counter-COVID-19 measures taken to date will likely negatively impact the Company’s business during the upcoming fiscal 4^th quarter and potentially beyond. Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 pandemic on the Company’s business and the duration for which it may have an impact cannot be determined at this time. There can therefore be no assurance that the pandemic will not have a material adverse impact on the future results of the Company. The extent of the impact will depend on future developments, including actions that have been or may be taken to contain COVID-19 and the duration of time until businesses can reopen following government shutdowns and resume normal operations.

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

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

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
3.5	Certificate of Amendment to the 2013 Series Convertible Preferred Stock	8-K	4/28/20	3.1
10.1	Employment Agreement between the Company and Michael Sullivan	8-K	12/20/19	5.02
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)

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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:  May 15, 2020

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)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE 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 and nine months ended March 31, 2020;

2.           Based on my knowledge, this 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 office 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 such 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; and

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: May 15, 2020

/s/ Michael F. Sullivan              

Michael F. Sullivan

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL 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 and nine months ended March 31, 2020;

2.           Based on my knowledge, this 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 office 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 such 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; and

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: May 15, 2020

/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 and nine months ended March 31, 2020, 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)

May 15, 2020 

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 and nine months ended March 31, 2020, 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)

May 15, 2020 

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Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
NET SALES	$ 1,121,805	$ 926,811	$ 3,168,542	$ 2,539,160
COST OF GOODS SOLD	768,943	637,804	2,228,300	1,836,081
GROSS PROFIT	352,862	289,007	940,242	703,079
EXPENSES
Research and development	26,614	23,297	88,527	71,087
Sales and marketing	52,652	43,184	147,432	147,433
General and administrative	173,297	168,984	539,663	522,427
Total Expenses	252,563	235,465	775,622	740,947
INCOME/(LOSS) FROM OPERATIONS	100,299	53,542	164,620	(37,868)
OTHER INCOME/(EXPENSE)
Interest expense	(785)	(711)	(1,223)	(3,049)
Interest income	286	86	579	318
Other income	496	16,962	3,618	20,051
Total Other Income/(Expense), net	(3)	16,337	2,974	17,320
NET INCOME/(LOSS)	100,296	69,879	167,594	(20,548)
Preferred Stock Dividend	(25,000)	(25,000)	(75,000)	(75,000)
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 75,296	$ 44,879	$ 92,594	$ (95,548)
BASIC AND DILUTED INCOME/(LOSS) PER SHARE (in Dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ 0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (in Shares)	48,260,422	46,532,867	48,301,467	45,638,048

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies disclosed therein have not changed since our audited financial statements and notes thereto included in our 2019 Annual Report, except as noted below.

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 shipment of product themselves, and once the product has left our dock, Amerityre Corporation (the “Company” or “Amerityre”), recognizes revenue for the product.  In effect by arranging their own freight, the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange shipment of product themselves, 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 $6,275, inclusive of $945 of shipping and handling revenue (see below), as of March 31, 2020.  Deferred revenue was $61,030 inclusive of $4,879 of shipping and handling revenue as of March 31, 2019.

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 $945 as of March 31, 2020 and $4,879 as of March 31, 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 analysis we then would asses:

●Assets with a length less than one 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 such 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 income (loss) per share calculation.  We excluded 2,870,000 and 6,360,000 common stock equivalents for the periods ended March 31, 2020 and 2019, respectively, because they are anti-dilutive as our closing stock price at the period end was lower than the strike price of options outstanding.

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the Financial Accounting Standards Board (“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.

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DEBT (Details) - USD ($)	1 Months Ended	9 Months Ended
	Jun. 30, 2016	Mar. 31, 2020	Feb. 29, 2020	Jun. 30, 2019
DEBT (Details) [Line Items]
Long-term Debt, Current Maturities		$ 2,000		$ 13,609
Long-term Debt, Excluding Current Maturities		$ 61,906		75,418
Line of Credit Facility, Maximum Borrowing Capacity			$ 50,000
Notes Payable, Other Payables [Member]
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		$ 61,906
Notes Payable to Banks [Member]
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

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STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range - $ / shares	9 Months Ended
	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options Outstanding	2,870,000	3,970,000	3,730,000
Number of Options Exercisable	2,870,000
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	1 year 8 months 1 day
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.08
Weighted Average Remaining Contractual Life Exercisable Options	1 year 8 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	1,920,000
Weighted Average Remaining Contractual Life of Outstanding Options	11 months 8 days
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.10
Weighted Average Remaining Contractual Life Exercisable Options	11 months 8 days
Number of Options Exercisable	1,920,000
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	800,000
Weighted Average Remaining Contractual Life of Outstanding Options	1 year 2 months 1 day
Weighted Average Exercise Price Outstanding Options (in Dollars per share)	$ 0.17
Weighted Average Remaining Contractual Life Exercisable Options	1 year 2 months 1 day
Number of Options Exercisable	800,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Deferred Revenue, Current	$ 6,275	$ 61,030	$ 6,275	$ 61,030	$ 19,408
Revenues	$ 1,121,805	$ 926,811	$ 3,168,542	$ 2,539,160
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)			2,870,000	6,360,000
Shipping and Handling Revenue [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Revenues			$ 945	$ 4,879

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DEBT

9 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 5 – DEBT

A former board member, Silas O. Kines, was 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 March 31, 2020, $2,000 and $61,906 (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. 

In February 2020, the Company secured a $50,000 line of credit with a local community bank. As of March 31, 2020, the line had not been used.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

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 shipment of product themselves, and once the product has left our dock, Amerityre Corporation (the “Company” or “Amerityre”), recognizes revenue for the product.  In effect by arranging their own freight, the customer is “taking control” of the product when it leaves our warehouse; or (ii) when a customer does not arrange shipment of product themselves, 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 $6,275, inclusive of $945 of shipping and handling revenue (see below), as of March 31, 2020.  Deferred revenue was $61,030 inclusive of $4,879 of shipping and handling revenue as of March 31, 2019.

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 $945 as of March 31, 2020 and $4,879 as of March 31, 2019.

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 analysis we then would asses:

●Assets with a length less than one 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 such 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 income (loss) per share calculation.  We excluded 2,870,000 and 6,360,000 common stock equivalents for the periods ended March 31, 2020 and 2019, respectively, because they are anti-dilutive as our closing stock price at the period end was lower than the strike price of options outstanding.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Other recent accounting pronouncements issued by the Financial Accounting Standards Board (“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.

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RIGHT TO USE LEASE ASSETS

9 Months Ended

Mar. 31, 2020

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 March 31, 2020, we have no financing leases:

	March 31, 2020			June 30, 2019
	(Unaudited)
Facility lease	$	629,250		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(179,306	)		(170,120	)
Right to use leased assets, operating, net	$	730,320		$	845,256

In March 2019 we negotiated a five-year extension of the lease for 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 $629,250, payable at amounts ranging from $11,750 to $12,600 a month until June 30, 2024.

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SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 8 – SUBSEQUENT EVENTS

In April 2020, the Company secured a loan from the Small Business Administration Paycheck Protection Program. The loan amount is $149,570 and has a term of 2 years at 1% interest. Per the terms of the loan, the first payment is expected on or about November 15, 2020.

In April 2020, the Company modified, and filed with the State of Nevada, its 2013 Series Convertible Preferred Stock Designation of Rights (the “Designation of Rights”). The modification removed section 3.06 of the original Designation of Rights, which involved limitations on the automatic conversion of Preferred Stock to common stock.   

In May 2020, the outstanding Preferred Shares automatically converted to 20,000,000 shares of common stock in accordance with the Designation of Rights conversion provisions.

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STOCK OPTIONS AND WARRANTS (Tables)

9 Months Ended

Mar. 31, 2020

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 March 31, 2020 and June 30, 2019 and changes during the periods then ended is presented below:

	March 31, 2020								June 30, 2019
				Weight Average			Intrinsic					Weight 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		(1,100,000	)	$	(0.14	)				(240,000	)	$	(0.10	)
Exercised		-		$	0.00					-		$	0.00
Outstanding end of period		2,870,000		$	0.12		$	-		3,970,000		$	0.12		$	-
Exercisable		2,870,000		$	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 March 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at March 31, 2020		Weighted Average Remaining Contractual Life
$	0.08		150,000		1.67	$	0.08		150,000		1.67
$	0.10		1,920,000		0.94	$	0.10		1,920,000		0.94
$	0.17		800,000		1.17	$	0.17		800,000		1.17
			2,870,000						2,870,000

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INVENTORY

9 Months Ended

Mar. 31, 2020

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.

	March 31, 2020			June 30, 2019
	(Unaudited)
Raw Materials	$	251,244		$	221,767
Finished Goods		673,684			557,977
Inventory reserve		(84,682	)		(61,513	)
Inventory - net	$	840,246			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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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
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
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
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	47,727,867
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service				10,119
Net income (loss) for the quarter					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
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	47,727,867
Balance at Mar. 31, 2020	$ 2,000	$ 48,923	62,714,077	12,323	(61,405,314)
Balance (in Shares) at Mar. 31, 2020	2,000,000	48,922,868
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
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service		$ 1,195	19,042	(10,702)
Stock based compensation expense for employee and Board of Director service (in Shares)		1,195,001
Net income (loss) for the quarter					38,395
Balance at Dec. 31, 2019	$ 2,000	$ 48,923	62,714,077		(61,480,610)
Balance (in Shares) at Dec. 31, 2019	2,000,000	48,922,868
Preferred stock dividends					(25,000)
Stock based compensation expense for employee and Board of Director service				12,323
Net income (loss) for the quarter					100,296
Balance at Mar. 31, 2020	$ 2,000	$ 48,923	$ 62,714,077	$ 12,323	$ (61,405,314)
Balance (in Shares) at Mar. 31, 2020	2,000,000	48,922,868

XML

Document And Entity Information - shares	9 Months Ended
	Mar. 31, 2020	May 15, 2020
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		68,922,868
Amendment Flag	false
Entity Central Index Key	0000945828
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
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 ROAD
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

RIGHT TO USE LEASE ASSETS (Details) - Schedule of Property Subject to or Available for Operating Lease - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Schedule of Property Subject to or Available for Operating Lease [Abstract]
Facility lease	$ 629,250	$ 735,000
Leasehold improvements related to our facility	280,376	280,376
Accumulated amortization – leasehold improvements	(179,306)	(170,120)
Inventory - net	$ 730,320	$ 845,256

XML

STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($)	9 Months Ended	12 Months Ended
	Mar. 31, 2020	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	(1,100,000)	(240,000)
Expired/Cancelled	$ (0.14)	$ (0.10)
Exercised	0	0
Exercised	$ 0.00	$ 0.00
Outstanding end of period	2,870,000	3,970,000
Outstanding end of period	$ 0.12	$ 0.12
Outstanding end of period	$ 0	$ 0
Exercisable	2,870,000	3,970,000
Exercisable	$ 0.12	$ 0.12
Exercisable	$ 0	$ 0

XML

STOCK OPTIONS AND WARRANTS

9 Months Ended

Mar. 31, 2020

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 an exercise 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 March 31, 2020 and June 30, 2019 and changes during the periods then ended is presented below:

	March 31, 2020								June 30, 2019
				Weight Average			Intrinsic					Weight 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		(1,100,000	)	$	(0.14	)				(240,000	)	$	(0.10	)
Exercised		-		$	0.00					-		$	0.00
Outstanding end of period		2,870,000		$	0.12		$	-		3,970,000		$	0.12		$	-
Exercisable		2,870,000		$	0.12		$	-		3,970,000		$	0.12		$	-

The following table summarizes the range of outstanding and exercisable options as of March 31, 2020:

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at March 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at March 31, 2020		Weighted Average Remaining Contractual Life
$	0.08		150,000		1.67	$	0.08		150,000		1.67
$	0.10		1,920,000		0.94	$	0.10		1,920,000		0.94
$	0.17		800,000		1.17	$	0.17		800,000		1.17
			2,870,000						2,870,000

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INVENTORY (Tables)

9 Months Ended

Mar. 31, 2020

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.

	March 31, 2020			June 30, 2019
	(Unaudited)
Raw Materials	$	251,244		$	221,767
Finished Goods		673,684			557,977
Inventory reserve		(84,682	)		(61,513	)
Inventory - net	$	840,246			718,231

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STOCK TRANSACTIONS (Details) - $ / shares	Jan. 24, 2020	Jan. 22, 2020	Dec. 18, 2019	Dec. 04, 2019
STOCK TRANSACTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				2,500,000
Shares Issued, Shares, Share-based Payment Arrangement, before Forfeiture			1,980,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			12 months
Shares Issued, Price Per Share (in Dollars per share)	$ 0.02		$ 0.0192
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	460,000	60,000
Non-Executive Board Member [Member]
STOCK TRANSACTIONS (Details) [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	93,750
Audit Committee Chair [Member]
STOCK TRANSACTIONS (Details) [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	156,250
Compensation Committee Chair [Member]
STOCK TRANSACTIONS (Details) [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	116,250

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INVENTORY (Details) - Schedule of Inventory - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Schedule of Inventory [Abstract]
Raw Materials	$ 251,244	$ 221,767
Finished Goods	673,684	557,977
Inventory reserve	(84,682)	(61,513)
Inventory - net	$ 840,246	$ 718,231

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STOCK OPTIONS AND WARRANTS (Details) - Chief Executive Officer [Member]	Jan. 01, 2018 $ / shares shares
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

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BASIS OF FINANCIAL STATEMENT PRESENTATION

9 Months Ended

Mar. 31, 2020

Accounting Policies [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 Annual Report on Form 10-K for the fiscal year ended June 30, 2019 (the “2019 Annual Report”).  Operating results for the fiscal quarter ended March 31, 2020 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2020.

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Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2020	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	48,922,868	47,727,867
Common stock, shares outstanding	48,922,868	47,727,867

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RIGHT TO USE LEASE ASSETS (Details)	9 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2019 ft² a
RIGHT TO USE LEASE ASSETS (Details) [Line Items]
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	$ 629,250
Lessee, Operating Lease, Renewal Term		5 years
Minimum [Member]
RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	11,750
Maximum [Member]
RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 12,600
Building [Member]
RIGHT TO USE LEASE ASSETS (Details) [Line Items]
Area of Real Estate Property (in Square Feet) | ft²		5,500

XML

STOCK OPTIONS AND WARRANTS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	6 Months Ended
	Dec. 31, 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

SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - USD ($)	1 Months Ended
	May 31, 2020	Apr. 30, 2020
SUBSEQUENT EVENTS (Details) [Line Items]
Proceeds from Other Debt		$ 149,570
Debt Instrument, Term		2 years
Debt Instrument, Interest Rate, Stated Percentage		1.00%
Conversion of Stock, Shares Converted	20,000,000

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Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 167,594	$ (20,548)
Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities:
Depreciation and amortization expense	181,390	65,282
Stock based compensation	31,977	27,897
Changes in operating assets and liabilities:
Accounts receivable	(115,074)	(56,417)
Inventory and inventory reserve	(122,015)	(40,260)
Prepaid and other current assets	(36,841)	(15,737)
Accounts payable and accrued expenses	(61,124)	187,805
Deferred revenue	(13,133)	40,318
Lease liability payable, operating lease	(105,750)	0
Net Cash Provided/Used by Operating Activities	(72,976)	188,340
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and equipment	(37,276)	(21,436)
Cash paid for leasehold improvements of an operating lease asset	0	(78,302)
Net Cash Used by Investing Activities	(37,276)	(99,738)
CASH FLOWS USED IN FINANCING ACTIVITIES
Payments on notes payable	(25,121)	(14,065)
NET INCREASE (DECREASE) IN CASH	(135,373)	74,537
CASH AT BEGINNING OF PERIOD	557,026	213,854
CASH AT END OF PERIOD	421,653	288,391
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
Interest paid	1,223	3,049
Income taxes paid	0	0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued preferred stock dividends	75,000	75,000
Issuance of common stock previously accrued for	583	35,427
Application of last payment of lease liability prepaid in previous period	0	726
Reclassification of accrued expense to stock payable	0	7,500
Recognition of operating lease right to use asset and related liability	$ 0	$ 172,500

XML

Balance Sheets - USD ($)	Mar. 31, 2020	Jun. 30, 2019
CURRENT ASSETS
Cash	$ 421,653	$ 557,026
Accounts receivable	392,764	277,690
Inventory - net	584,544	448,407
Prepaid and other current assets	119,437	82,596
Total Current Assets	1,518,398	1,365,719
RIGHT TO USE LEASE ASSETS, OPERATING, NET	730,320	845,256
PROPERTY AND EQUIPMENT
Molds and models	583,611	583,611
Equipment	3,033,823	3,003,797
Furniture and fixtures	73,423	66,173
Software	247,610	247,610
Less - accumulated depreciation	(3,816,853)	(3,763,672)
Total Property and Equipment - net	121,614	137,519
OTHER ASSETS
Patents and trademarks - net	97,328	110,601
Non-current inventory	255,702	269,824
Deposits	11,000	11,000
Total Other Assets	364,030	391,425
TOTAL ASSETS	2,734,362	2,739,919
CURRENT LIABILITIES
Accounts payable and accrued expenses	662,922	649,046
Current portion of long-term debt	2,000	13,609
Current portion of lease liability	144,600	141,000
Deferred revenue	6,275	19,408
Total Current Liabilities	815,797	823,063
Long-term debt, net of current portion	61,906	75,418
Long-term lease liability	484,650	594,000
TOTAL LIABILITIES	1,362,353	1,492,481
STOCKHOLDERS’ EQUITY
Preferred stock: 5,000,000 shares authorized of $0.001 par value, 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	48,923	47,728
Additional paid-in capital	62,714,077	62,695,035
Stock payable	12,323	583
Accumulated deficit	(61,405,314)	(61,497,908)
Total Stockholders’ Equity	1,372,009	1,247,438
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 2,734,362	$ 2,739,919

XML

STOCK TRANSACTIONS

9 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 – STOCK TRANSACTIONS

After an analysis of the above stock options expiration and in association with the Company’s desire to retain its Chief Executive Officer, the Board of Directors approved the termination of the 2017 Omnibus Stock Option and Award Plan on December 4, 2019. Any stock instrument available but unencumbered under this plan was also released.

On December 4, 2019, the Board of Directors adopted the 2019 Equity Incentive Plan which contains provisions for up to 2,500,000 stock-based instruments to be granted to employees, consultants and directors.

On December 18, 2019, the Company renewed the Chief Executive Officer’s Employment Agreement.  The new Agreement extends his term of employment to December 31, 2020.  Inclusive in this new Agreement is a stock award of 1.98 million shares of the Company’s common stock vesting ratably over 12 months (January 2020 – December 2020), valued at a fixed rate of $0.0192, the average price per share of the Company’s common stock for the period December 24, 2019 to December 31, 2019. 

On January 22, 2020, 60,000 shares of common stock were granted to the Company’s Chief Financial Officer as part of her employment renewal.  The shares are valued as of January 21, 2020 and vest ratably on a quarterly basis through December 2020.  No additional changes were made to her compensation on renewal of her employment.

On January 24, 2020, 460,000 shares of common stock were granted to the Company’s Board members as compensation for the term ending November 2020.  Each non-executive Board member receives 93,750 shares, with the Audit Committee Chair receiving 156,250 shares and the Compensation Committee Chair receiving 116,250 shares.  The shares vest ratably on a monthly basis over the January 2020 – November 2020 period. The shares are valued at $0.02, the closing price per share of our common stock on January 24, 2020. 

XML

RIGHT TO USE LEASE ASSETS (Tables)

9 Months Ended

Mar. 31, 2020

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 March 31, 2020, we have no financing leases:

	March 31, 2020			June 30, 2019
	(Unaudited)
Facility lease	$	629,250		$	735,000
Leasehold improvements related to our facility		280,376			280,376
Accumulated amortization – leasehold improvements		(179,306	)		(170,120	)
Right to use leased assets, operating, net	$	730,320		$	845,256