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: December 31, ~~2020~~2021

☐ 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 February ~~12, 2021: 71,422,868~~ 9, 2022: 74,667,868

~~Table of Contents~~

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	1817
Item 4.	Controls and Procedures	1817
PART II
Item 1.	Legal Proceedings	1918
Item 1A.	Risk Factors	1918
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1918
Item 3.	Defaults Upon Senior Securities	1918
Item 4.	Mine Safety Disclosures	1918
Item 5.	Other Information	1918
Item 6.	Exhibits	2019

SIGNATURES		2120

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERITYRE CORPORATION

Balance Sheets

	December 31, 2020			June 30, 2020			December 31, 2021			June 30, 2021
	(Unaudited)						(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	626,614		$	666,756		$	542,857		$	516,192
Accounts receivable		282,582			292,642			292,161			728,315
Inventory - net		511,977			493,892
Current inventory - net								905,562			659,333
Prepaid and other current assets		122,756			86,467			149,144			94,483
Total Current Assets		1,543,929			1,539,757			1,889,724			1,998,323

RIGHT TO USE LEASE ASSETS, OPERATING, NET		623,633			692,007			466,104			544,070

PROPERTY AND EQUIPMENT
Molds and models		583,611			583,611			583,611			583,611
Equipment		2,927,269			3,037,474			3,094,067			2,910,018
Furniture and fixtures		73,423			73,423			73,423			73,423
Software		233,528			247,610			233,528			233,528
Less - accumulated depreciation		(3,710,536	)		(3,816,004	)		(3,719,968	)		(3,690,515	)
Property and Equipment - net		107,295			126,114			264,661			110,065

OTHER ASSETS
Patents and trademarks - net		84,237			92,905			66,221			75,977
Non-current inventory		244,274			300,778			185,672			163,289
Deposits		11,000			11,000			11,000			11,000
Total Other Assets		339,511			404,683			262,893			250,266
TOTAL ASSETS	$	2,614,368		$	2,762,561		$	2,883,382		$	2,902,724

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	523,460		$	691,962		$	681,427		$	767,193
Current portion of long-term debt		2,000			59,440			2,000			2,000
Current portion of lease liability		146,700			145,800			148,500			147,600
Deferred revenue		841			12,192			20,124			25,892
Total Current Liabilities		673,001			909,394			852,051			942,685

Long-term debt		61,551			153,996			60,878			61,326
Long-term lease liability		374,400			448,200			225,900			300,600
TOTAL LIABILITIES		1,108,952			1,511,590			1,138,829			1,304,611

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Common Stock: 100,000,000 shares authorized of $0.001 par value, 71,422,868 and 70,172,868 shares issued and outstanding, respectively		71,423			70,173
Common Stock: 100,000,000 shares authorized of $0.001 par value, 73,047,868 and 74,667,868 shares issued and outstanding, respectively								74,668			73,048
Additional paid-in capital		62,742,033			62,719,473			62,866,097			62,805,404
Accumulated deficit		(61,308,040	)		(61,538,675	)		(61,196,212	)		(61,280,339	)
Total Stockholders’ Equity		1,505,416			1,250,971			1,744,553			1,598,113
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,614,368		$	2,762,561		$	2,883,382		$	2,902,724

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

Table of Contents

AMERITYRE CORPORATION

Statements of Operations

(Unaudited)

	For the Three Months Ended December 31,						For the Six Months Ended December 31,						For the Three Months Ended December 31,					For the Six Months Ended December 31,
	2020			2019			2020			2019			2021		2020			2021		2020

NET SALES	$	1,204,990		$	1,067,440		$	2,256,276		$	2,046,737		$	1,453,499	$	1,204,990		$	2,849,113	$	2,256,276

COST OF GOODS SOLD		903,543			768,758			1,611,109			1,459,357
COST OF SALES														1,123,434		903,543			2,134,276		1,611,109

GROSS PROFIT		301,447			298,682			645,167			587,380			330,065		301,447			714,837		645,167

EXPENSES
Research and development		30,507			35,897			50,978			61,913			24,399		30,507			45,966		50,978
Sales and marketing		51,102			51,309			110,902			94,780			74,048		51,102			142,421		110,902
General and administrative		186,014			172,936			396,500			366,366			213,392		186,014			446,240		396,500

Total Expenses		267,623			260,142			558,380			523,059			311,839		267,623			634,627		558,380

INCOME FROM OPERATIONS		33,824			38,540			86,787			64,321			18,226		33,824			80,210		86,787

OTHER INCOME/(EXPENSE)
Interest expense		0			(103	)		0			(438	)
OTHER INCOME (EXPENSE)
Interest income		423			119			841			293			294		423			660		841
Gain on debt extinguishment		149,570			0			149,570			0			-		149,570			-		149,570
Loss on asset disposal/impairment		(17,225	)		0			(20,078	)		0
Other income (expense)		10,260			(161	)		13,515			3,122
Total Other Income/(Expense), net		143,028			(145	)		143,848			2,977
Loss on asset disposal														-		(17,225	)		-		(20,078	)
Other income														507		10,260			3,257		13,515
Total Other Income, net														801		143,028			3,917		143,848

NET INCOME		176,852			38,395			230,635			67,298		$	19,027	$	176,852		$	84,127	$	230,635

Preferred Stock Dividend		0			(25,000	)		0			(50,000	)

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	176,852		$	13,395		$	230,635		$	17,298

BASIC AND DILUTED INCOME PER SHARE	$	0.00		$	0.00		$	0.00		$	0.00		$	0.00	$	0.00		$	0.00	$	0.00

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		70,566,890			48,260,422			70,369,879			47,994,144			73,452,868		70,566,890			73,250,368		70,369,879

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

Table of Contents

AMERITYRE CORPORATION

Statements of ~~Stockholders’~~Stockholders’ Equity

(Unaudited)

	Preferred Stock						Common Stock				Additional Paid in			Stock			Accumulated			Common Stock				Additional Paid in		Stock			Accumulated
	Shares			Amount			Shares		Amount		Capital			Payable			Deficit			Shares		Amount		Capital		Payable			Deficit			Total
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		46,923		62,714,077			12,323			(61,405,314	)
Preferred stock dividends		-			-			-		-		-			-			(8,300	)
Preferred stock conversion to common stock		(2,000,000	)		(2,000	)		20,000,000		20,000		(18,000	)		-			-
Stock based compensation expense for employee and Board of Director service		-			-			1,250,000		1,250		23,396			(12,323	)		-
Net loss for the quarter		-			-			-		-		-			-			(125,061	)
Balance, June 30, 2020		-			-			70,172,868		70,173		62,719,473			-			(61,538,675	)		70,172,868	$	70,173	$	62,719,473	$	-		$	(61,538,675	)	$	1,250,971
Stock based compensation expense for employee and Board of Director service		-			-			-		-		-			12,323			-
Stock option based compensation expense – options																					-		-		-		12,323			-			12,323
Net income for the quarter		-			-			-		-		-			-			53,783			-		-		-		-			53,783			53,783
Balance, September 30, 2020		-			-			70,172,868		70,173		62,719,473			12,323			(61,484,892	)		70,172,868		70,173		62,719,473		12,323			(61,484,892	)		1,317,077
Stock option based compensation expense – options																					-		-		-		(12,323	)		-			(12,323	)
Stock based compensation expense for employee and Board of Director service		-			-			1,250,000		1,250		22,560			(12,323	)		-			1,250,000		1,250		22,560		-			-			23,810
Net income for the quarter		-			-			-		-		-			-			176,852			-		-		-		-			176,852			176,852
Balance, December 31, 2020		-		$	-			71,422,868	$	71,423	$	62,742,033		$	-		$	(61,308,040	)		71,422,868		71,423		62,742,033		-			(61,308,040	)		1,505,416
Stock option based compensation expense – options																					-		-		-		31,590			-			31,590
Net income for the quarter																					-		-		-		-			80,651			80,651
Balance, March 31, 2021																					71,422,868		71,423		62,742,033		31,590			(61,227,389	)		1,617,657
Stock option based compensation expense – options																					-		-		-		33,406			-			33,406
Stock based compensation expense for employee and Board of Director service																					1,625,000		1,625		63,371		(64,996	)		-			-
Net loss for the quarter																					-		-		-		-			(52,950	)		(52,950	)
Balance, June 30, 2021																					73,047,868		73,048		62,805,404		-			(61,280,339	)		1,598,113
Stock based compensation expense for employee and Board of Director service																					-		-		-		33,156			-			33,156
Net income for the quarter																					-		-		-		-			65,100			65,100
Balance, September 30, 2021																					73,047,868	$	73,048	$	62,805,404	$	33,156		$	(61,215,239	)	$	1,696,369
Stock based compensation expense for employee and Board of Director service																					1,620,000		1,620		60,693		(33,156	)		-			29,157
Net income for the quarter																					-		-		-		-			19,027			19,027
Balance, December 31, 2021																					74,667,868	$	74,668	$	62,866,097	$	-		$	(61,196,212	)	$	1,744,553

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

Table of Contents

AMERITYRE CORPORATION

Statements of Cash Flows

(Unaudited)

For the Six Months Ended
December 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net income
$ 230,635 $ 67,298
Adjustments to reconcile net income to net cash used by operating activities:

Depreciation and amortization expense
108,161 120,762
Stock based compensation
23,810 19,654
Gain on debt extinguishment
(149,570
)
0
Loss on asset disposal/impairment
20,078 0
Changes in operating assets and liabilities:

Accounts receivable
10,060 (39,633 )
Inventory and inventory reserve
(42,890
)
(111,706
)
Prepaid and other current assets
21,195 (28,823
)
Accounts payable and accrued expenses
(166,270
)
(99,169
)
Deferred revenue
(11,351
)
(19,408
)
Lease liability payable, operating lease
(72,900
)
(70,500
)
Net Cash Used by Operating Activities
(29,042
)
(161,525
)
CASH FLOWS USED IN INVESTING ACTIVITIES

Purchase of property and equipment
0 (30,318
)
Cash paid for leasehold improvements
(10,785
)
0
Net Cash Used by Investing Activities
(10,785
)
(30,318
)
CASH FLOWS USED IN FINANCING ACTIVITIES

Payments on notes payable
(315
)
(25,121
)

NET DECREASE IN CASH
(40,142
)
(216,964
)

CASH AT BEGINNING OF PERIOD
666,756 557,026
CASH AT END OF PERIOD
$ 626,614 $ 340,062
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

For the Six Months Ended
December 31,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net income
$ 84,127 $ 230,635
Adjustments to reconcile net income to net cash provided (used) by operating activities:

Depreciation and amortization expense
119,925 108,161
Stock based compensation
62,313 23,810
Gain on debt extinguishment
- (149,570
)
Loss on asset disposal
- 20,078
Changes in operating assets and liabilities:

Accounts receivable
436,154 10,060
Prepaid and other current assets
(90,988 ) 21,195
Inventory and any change in inventory reserve
(268,612
)
(42,890
)
Accounts payable and accrued expenses
(85,766
)
(166,270
)
Deferred revenue
(5,768
)
(11,351
)
Lease liability payable, operating lease
(73,800
)
(72,900
)
Net Cash Provided (Used) by Operating Activities
177,585 (29,042
)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment
(147,722
)
-
Cash paid for leasehold improvements of an operating lease
(2,750
)
(10,785
)
Net Cash Used by Investing Activities
(150,472
)
(10,785
)

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on notes payable
(448
)
(315
)
Net Cash Used by Financing Activities
(448
)
(315
)

NET INCREASE (DECREASE) IN CASH
26,665 (40,142
)
CASH AT BEGINNING OF PERIOD
516,192 666,756
CASH AT END OF PERIOD
$ 542,857 $ 626,614

NON-CASH FINANCE ACTIVITIES

Interest paid
$ 0 $ 776

$
-

$
776

Income taxes paid
$ 0 $ 0

$
-

$
-

NON-CASH INVESTING AND FINANCING ACTIVITIES

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

Write off of fully depreciated and disposed fixed assets
$ 124,287 $ 0
$
-

$
124,287

Use of store inventory, capitalized as fixed asset
$ 6,600 $ 0

$
36,327

$
6,600

Accrued preferred stock dividends
$ 0 $ 50,000
Issuance of common stock previously accrued for
$ 0 $ 583

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

6
Table of Contents

AMERITYRE CORPORATION
Notes to the Unaudited Financial Statements
December 31, ~~2020~~2021

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, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”). Operating results for the fiscal quarter ended December 31, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, ~~2021.~~2022.

COVID-19 Update

~~The~~Despite our revenue gains the past 2 quarters, the COVID-19 ~~crisis did not have a material impact on~~pandemic affected the Company’s overall financial results for the ~~second quarter of fiscal year 2021, as evidenced by~~three and six months ended December 31, 2021. We continue to experience supply chain delays and increased costs from our ~~net sales revenues of $1.2 million,~~raw material suppliers, many which ~~were approximately 13% higher than~~are being attributed to COVID-19 effects in the marketplace. This has resulted in downward pressure on our ~~net revenues for the year earlier period.~~Gross Profit margins. We continue to see strong demand for our products from our customers, and we continue to be diligent in minimizing COVID-19 exposure risk in our ~~facility,~~facility. We have implemented price increases on our tire products where possible to reduce the negative impact of increasing costs.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies disclosed herein have not changed since our audited financial statements and notes thereto included in our June 30, ~~2020~~2021 Annual Report on Form 10-K, 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;~~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 $20,124, inclusive of $2,294 of shipping and handling revenue (see below), as of December 31, 2021. Deferred revenue was $841, inclusive of $122 of shipping and handling revenue (see below), as of December 31, 2020. ~~There was no deferred revenue as of December 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 $2,294 as of December 31, 2021 and $122 as of December 31, ~~2020 and $0 as of December 31, 2019.~~2020.

7
Table of Contents

AMERITYRE CORPORATION
Notes to the Unaudited Financial Statements
December 31, ~~2020~~2021

Basic and Fully Diluted Net Income (Loss) Per Share

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

Our outstanding stock options ~~and warrants and shares issuable upon conversion of outstanding convertible notes~~ have been excluded from the basic and fully diluted net loss per share calculation. We excluded ~~1,030,000~~0 and ~~2,870,000~~1,030,000 common stock equivalents for the periods ended December 31, ~~2020~~2021 and ~~2019,~~2020, respectively, because they are anti-dilutive. All options expired as of December 31, 2021.

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.

December 31, 2020

June 30, 2020

December 31, 2021

June 30, 2021

(Unaudited)

(Unaudited)

Raw Materials
$ 272,914 $ 263,573 $ 460,164 $ 416,709
Finished Goods
597,343 618,104 743,747 525,565
Inventory reserve
(114,006
)
(87,006
)
(112,677
)
(119,652
)
Inventory – net (Current and long term)
$ 756,251 794,671 $ 1,091,234 822,622

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.~~  immediate sale. Finished good inventory levels were higher on December 31, 2021 due to the timing of the shipment of a large customer order. This order was expected to ship in mid-December but was delayed until early January 2022. We continue to maintain higher than normal raw material inventories as we execute our strategy of strategic raw material purchases when they are available.

8

~~Table of Contents~~
~~AMERITYRE CORPORATION~~
~~Notes to the Unaudited Financial Statements~~
~~December 31, 2020~~
NOTE 4 – RIGHT TO USE LEASE ASSETS

Based on our lease accounting policy, we have identified the following operating leases. As of December 31, ~~2020,~~2021, we have no financing leases:

December 31, 2020

June 30, 2020

December 31, 2021

June 30, 2021

(Unaudited)

(Unaudited)

Facility lease
$ 521,100 $ 594,000 $ 374,400 $ 448,200
Leasehold improvements related to our facility
291,161 280,376 289,604 286,854
Accumulated amortization – leasehold improvements
(188,628
)
(182,369
)
(197,900
)
(190,984
)
Right to use leased assets, operating, net
$ 623,633 $ 692,007 $ 466,104 $ 544,070

In March 2019 we negotiated a ~~five-year~~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 ~~$521,100,~~$374,400, payable at amounts ranging from ~~$11,750~~$12,450 to $12,600 a month until June 30, 2024.

8
Table of Contents
AMERITYRE CORPORATION
Notes to the Unaudited Financial Statements
December 31, 2021
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 December 31, ~~2020,~~2021, $2,000 and ~~$61,551~~$60,878 (June 30, ~~2020,~~2021, $2,000 and ~~$61,867)~~$61,326) were recorded for the current and long-term portion, respectively, of the related liability.

In April 2020, the Company secured a loan from the Small Business Administration Paycheck Protection Program. The loan amount was $149,570 and had a term of 2 years at 1% interest. In November 2020, the ~~Company’s~~Company received full forgiveness by the Small Business Administration.

NOTE 6 – STOCK OPTIONS AND WARRANTS

On July 22, 2020, the Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”) which contains provisions for up to 5,000,000 stock-based instruments to be granted to employees, consultants and directors.

On October 26, 2021, the Board of Directors adopted the 2022 Equity Incentive Plan (the “2022 Plan”) which contains provisions for up to 10,000,000 stock-based instruments to be granted to employees, consultants and directors.
Effective September 24, 2020, the Company filed a ~~withdraw~~Certificate of ~~designation~~Withdrawal of the Certificate of Designation related to the Company’s 2013 Series Convertible Preferred Stock. In doing so, the 2,000,000 shares of preferred stock previously designated as 2013 Series Convertible Preferred Stock ~~designation. In doing so,~~returned to the ~~State~~status of ~~Nevada also withdrew all~~authorized and unissued shares of “blank check” preferred stock, and as a result we now have a total of 5,000,000 shares ~~authorized.~~of preferred stock under our Articles of Incorporation which may be designated in one or more series with such relative rights, preferences and limitations as the Board of Directors may determine. The Company ~~will~~may file aone or more new ~~designation~~designations authorizing the issuance of preferred shares should this be needed in the ~~future.~~future as may be determined by the Board of Directors.

NoAll previously granted stock oroptions expired as of December 31, 2021; no stock options have been granted as of December 31, ~~2020~~2021 or thus far in fiscal year ~~2021.~~  2022.

A summary of the status of our outstanding stock options as of December 31, ~~2020~~2021 and June 30, 202021 and changes during the periods then ended is presented below:

December 31, 2020

June 30, 2020

Weight Average

Intrinsic

Weight Average

Intrinsic

Shares

Exercise Price

Value

Shares

Exercise Price

Value

Outstanding beginning of period

2,870,000

$
0.12

3,970,000

$
0.12

Granted

0

$
0.00

0

$
0.00

Expired/Cancelled

(1,840,000
)

$
(0.12
)

(1,100,000
)

$
(0.10
)

Exercised

0

$
0.00

0

$
0.00

Outstanding end of period

1,030,000

$
0.12

$
0

2,870,000

$
0.12

$
0

Exercisable

1,030,000

$
0.12

$
0

2,870,000

$
0.12

$
0

December 31, 2021

June 30, 2021

Weight Average

Intrinsic

Weight Average

Intrinsic

Shares

Exercise Price

Value

Shares

Exercise Price

Value

Outstanding beginning of period
1,030,000 $ 0.12 2,870,000 $ 0.12
Granted
- $ 0.00 - $ 0.00
Expired/Cancelled
(1,030,000
)
$ (0.12
)
(1,840,000
)
$ (0.12 )
Exercised
- $ 0.00 - $ 0.00
Outstanding end of period
- $ 0. 00 $ - 1,030,000 $ 0.12 $ -
Exercisable
- $ 0. 00 $ - 1,030,000 $ 0.12 $ -

9
Table of Contents

AMERITYRE CORPORATION
Notes to the Unaudited Financial Statements
December 31, ~~2020~~2021

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

Outstanding

Exercisable

Range of
Exercise Prices

Number Outstanding
at
December 31, 2020

Weighted
Average
Remaining
Contractual Life

Weighted
Average
Exercise Price

Number
Exercisable at
December 31, 2020

Weighted
Average Remaining
Contractual Life

$
0.08

150,000

0.92

$
0.08

150,000

0.92

$
0.10

480,000

1.00

$
0.10

480,000

1.00

$
0.17

400,000

0.92

$
0.17

400,000

0.92

1,030,000

1,030,000

NOTE 7 – SUBSEQUENT EVENTS

Effective January 1, ~~2021,~~2022, the Company renewed the Chief Executive Officer’s Employment Agreement. The new Agreement extends his term of employment to December 31, ~~2021.~~2022. Inclusive in this new Agreement is a stock award of ~~2.7~~1.68 million shares of the Company’s common stock vesting ratably over 12 months (January ~~2021~~2022 – December ~~2021)~~2022), valued at a fixed rate of ~~$0.031,~~$0.049 per share, the average price per share of the Company’s common stock for the period December ~~24, 2020~~27, 2021 to December 31, ~~2020.~~ 2021.

On January 1, ~~2021,~~2022, 60,000 shares of common stock were granted to the Company’s Chief Financial Officer as part of her employment renewal. ~~The~~These shares of the Company’s common stock ~~vesting~~vest ratably over 12 months (January ~~2021~~2022 – December ~~2021)~~2022), and are valued at a fixed rate of ~~$0.031,~~$0.049 per share, the average price per share of the Company’s common stock for the period December ~~24, 2020~~27, 2021 to December 31, ~~2020.~~ 2021.

10
Table of Contents

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

This discussion and analysis section contains statements of a forward-looking nature relating to future events or our future financial performance or financial condition. Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in ~~“Risk Factors”~~“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2020,~~2021, as well as those discussed elsewhere in this report. The historical results set forth in this discussion and analyses are not necessarily indicative of trends with respect to any actual or projected future financial performance. This discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this report.

Overview

Amerityre engages in the research and development, manufacturing, and sale of solid polyurethane foam and polyurethane elastomer tires. We have developed unique polyurethane formulations that allow us to make products with superior performance characteristics, compared to conventional rubber tires, in the areas of abrasion resistance, energy efficiency and load-bearing capabilities. 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 necessary to cure rubber. We believe tires produced with our proprietary polyurethane formulations last longer, are less susceptible to failure and are friendlier to the environment when compared to competitor offerings.

We focus our business on 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, including bicycle tires, hand truck tires, mobility tires, and lawn/garden tires. Our product development and marketing efforts are focused on building customer relationships and expanding sales with original equipment manufacturers (“OEMs”) 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.

Closed cell Polyurethane Foam Tires – The sale of polyurethane foam tires to original equipment manufacturers, distributors, and dealers accounts for the majority of our sales revenue. We produce a broad range of tire sizes for the light duty tire market, including bicycle tires, hand truck tires, mobility tires, lawn/garden tires, golf car tires, and light industrial vehicle tires.
Despite the ongoing negative effects of COVID-19 on the overall ~~business climate,~~US economy, we experienced higher than expected demand for our polyurethane foam tires in the recent quarter. Sales for the fiscal second quarter ~~2021~~2022 were ~~9.9%~~32.3% higher than the sales level in fiscal second quarter ~~2020. Some of these sales are likely “catch up” sales related~~2021. We continue to see the ~~reopening of our customers from the COVID shutdown, but we are seeing the same~~ strong sales trends that we saw ~~last~~during fiscal year ~~during~~2021 as our current customer base is experiencing strong sales and our domestically produced tires are attractive to those new customers looking for an alternative source for their tires
Our industrial tire product line, which includes our golf car tires, our 480 x 12 tires, and our 570 x 12 tires, continues to see outstanding demand in the ~~pre-COVID period.~~marketplace. We expect this trend to continue in the coming quarters.

Polyurethane Elastomer ~~Industrial~~ Tires – Our elastomer formulations are used to manufacture tires requiring higher levels of abrasion resistance and greater load bearing capability. Forklift tires constitute a large part of this market opportunity, with other industrial and agricultural applications representing other opportunities. Overall sales volumes of our forklift tires remain small, less than 0.1% of our total sales revenue. Price sensitive consumers continue to favor imported solid rubber press-on forklift tires rather than our ~~products. We~~products, and consequently we have decided not ~~devoted~~to devote significant resources towards promoting this product line. ~~Our~~We have been working with OEMs to utilize our elastomer formulations for large industrial ~~tire product line, which includes our golf car tires, our 480 x 12~~equipment tires and ~~our 570 x 12 tires, continues~~agricultural applications, which may lead to ~~see strong growth. We offer the 480 x 12 and 570 x 12 tires in both polyurethane foam and light density elastomer formulations. We expect these tires to continue to grow in popularity~~new revenue sources in the ~~coming quarters.~~future.

~~The Company continues to see greater interest in its light-density~~Light Density Elastomer Tires – Demand for our light density elastomer formulation ~~for use~~(Elastothane^TM 500) is higher in ~~tire~~ applications ~~where customers need higher~~requiring greater abrasion resistance and load bearing ~~capability. Elastothane TM 500 formulation provides better performance in these areas compared to~~capability than our ~~closed cell~~polyurethane foam ~~formulation.~~tires. Lawn and garden tire applications continue to drive increased sales of this ~~formulation.~~formulation, although we have seen some custom tire applications for this formulation as well. We ~~continue to believe this new formulation represents a significant upside opportunity for our product portfolio.~~
~~Agricultural Tires~~ –expect Agricultural tires sales to continue to ~~be negatively impacted by low farm income levels. However, the recent~~ increase in ~~farm commodity prices may result in more disposal income for~~the coming quarters as farmers ~~in 2021.~~continue to see higher levels of disposable income. However, economic challenges such as raw material supply shortages could limit anticipated benefits or our ability to capitalize on them. We continue to approach OEMs and large distributors about promoting and utilizing our tires for ~~certain~~specific targeted applications, but progress with these potential customers has been limited to date. The introduction of our ElastothaneTM 500 formulation has enabled us to offer a better product alternative for abrasive applications.and several are evaluating sample tires.

We believe investment in new and improved products is important to the continued growth and success of our overall business, and we will selectively invest in promising opportunities that can be supported within our current financial model. We have several product ~~evaluation~~evaluations programs ongoing which have the potential to develop into significant future business. We expect our current R&D investments to continue to prove to be a prudent investment of our capital resources.

11
Table of Contents
A major component of our strategic operating plan is to establish a partnership or other type of business combination with a larger OEM or tire manufacturer who would have a larger distribution channel as well as financial resources to fully leverage our current tire portfolio as well as new products that can be developed using our formulations. We continue to pursue opportunities with larger entities that we believe may help us maximize the potential of our intellectual property and the overall value of the business.
We continue to manage supply chain issues and increases in raw material and operating costs, which continue to pressure our Gross Profit Margins. In January 2022 we implemented another price increase on our tire assemblies to mitigate the effects of these cost increases. However, as evidenced by our lower Gross Margins for the recent quarter, we are slightly “behind the cost curve” as our previous price increases were not successful in offsetting all cost increases during the Fiscal 2022 second quarter. We expect that our newest price increase will help to improve our Gross Margins and we will continue to closely manage the cost drivers of our business and take appropriate corrective actions, including further price increases if warranted. However, there can be no assurance that any corrective measures we are undertaking now or that we may attempt in the future will improve our Gross Margins or otherwise achieve their intended purpose, including due to economic conditions and other factors which are beyond our control.
Our sales growth over the past year has been very strong. However, it is unclear if the environment of rising costs and the corresponding higher sales prices will adversely affect demand for our products moving forward. We expect raw material availability to continue to be an issue in the upcoming quarters due to ongoing supply chain issues. While we continue to enjoy a strong backlog of business, we may be restricted as to how much product we can produce and sell if raw material is not available on a timely basis or at reasonable costs. We continue to work with our suppliers to ensure that negative supply impacts are minimized to the extent practicable, although in some cases this may result in Amerityre incurring higher raw material costs.

As described above, our product line covers diverse market segments which are unrelated in terms of customer base, product distribution, market demands and competition. Our ~~external~~ sales team is comprised of independent manufacturer ~~representatives.~~representatives with inside sales support. The Company’s continued emphasis on proper product pricing continues to drive more profitable sales. Our website educates the marketplace about our products as well as offers an outlet for online sales.

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~~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.

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~~At present we do not have any critical accounting policies ~~because they are important to the portrayal of our financial condition and results of operations and they~~that require critical management judgments and estimates about matters that may be uncertain.  If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.
~~Valuation of Intangible Assets and Goodwill~~
Patent and trademark costs have been capitalized at December 31, 2020, totaling $487,633 with accumulated amortization of $403,396 for a net book value of $84,237. Patent and trademark costs capitalized at December 31, 2019, totaled $487,633 with accumulated amortization of $385,880 for a net book value of $101,753.

12
Table of Contents
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 December 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 six month periods ended December 31, 2020 and 2019, respectively.
Amortization expense for the periods ended December 31, 2020 and 2019 was $8,667 and $8,849 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 December 31, ~~2020~~2021 and ~~2019~~2020 with respect to certain key financial measures. The comparisons illustrated in the table are discussed in greater detail below.

For the Three Months Ended
December 31,

For the Six Months Ended
December 31,

(in 000’s)

Change

(in 000’s)

Change

2020

2019

2020 vs. 2019

2020

2019

2020 vs. 2019

Net revenues

$
1,205

$
1,067

12.9
%

$
2,256

$
2,047

10.2
%
Cost of revenues

(904
)

(768
)

17.6
%

(1,611
)

(1,460
)

10.3
%
Gross profit

301

299

0.3
%

645

587

9.9
%
Research & Development

(31
)

(36
)

(13.9
%)

(51
)

(62
)

(17.7
%)
Sales and Marketing

(51
)

(51
)

0.0
%

(111
)

(95
)

16.8
%
General and Administrative

(186
)

(174
)

6.9
%

(396)
)

(366
)

8.2
%
Other income (expense)

143

-

100.0
%

144

3

4,700
%
Net income

176

38

363.2
%

231

67

244.8
%
Preferred stock dividend

-

(25
)

(100.0
%)

-

(50
)

(100.0
%)
Net income

$
176

$
13

1,253.8
%

$
231

$
17

1,258.8
%
13

~~Table of Contents~~

For the Three Months Ended
December 31,

For the Six Months Ended
December 31,

(in 000’s)

Change

(in 000’s)

Change

2021

2020

2021 vs. 2020

2021

2020

2021 vs. 2020

Net revenues
$ 1,453 $ 1,205 20.6
%
$ 2,849 $ 2,256 26.3
%
Cost of revenues
(1,123
)
(904
)
24.4
%
(2,134
)
(1,611
)
32.5
%
Gross profit
330 301 9.6
%
715 645 10.9
%
Research & Development
(24
)
(31
)
(22.6
%)
(46
)
(51
)
(9.8
%)
Sales and Marketing
(74
)
(51
)
45.1
%
(142
)
(111
)
27.9
%
General and Administrative
(213
)
(186
)
13.9
%
(445
)
(396
)
) 12.4
%
Other income (expense)
1 143 (99.3
%)
4 144 (97.2
%)
Net income
$ 20 $ 176 (88.6
%)
$ 86 $ 231 (62.8
%)

Quarter Ended December 31, ~~2020~~2021 Compared to December 31, ~~2019~~2020

Net Revenues. Net revenues of ~~$1,204,990~~$1,453,499 for the quarter ended December 31, ~~2020,~~2021, represents a ~~12.9%~~20.6% increase over net revenues of ~~$1,067,440~~$1,204,990 for the same period in ~~2019.~~2020. These results exceeded our ~~expectations. The improved results were mainly driven~~expectations as we continued to successfully navigate the challenges presented by ~~higher than expected polyurethane foam tire sales from current customers benefitting from business reopening from~~ the COVID-19 ~~shutdown.~~pandemic, including limited raw material availability, higher material costs and other supply chain issues. We expect our polyurethane foam products to continue to ~~account for~~constitute the majority of our sales ~~during~~going forward. The increase is due to increases in our prices to offset the ~~upcoming fiscal year.~~raw material prices plus increase in demand.

Cost of Revenues. Cost of revenues for the quarter ended December 31, ~~2020~~2021 was ~~$903,543~~$1,123,434 or ~~75.0%~~77.3% of sales compared to ~~$768,758~~$903,543 or ~~72.0%~~75.0% of sales for the same period in ~~2019.~~2020. We experienced higher raw material costs, particularly chemical feedstocks, during the recent ~~quarter.~~quarter which pressured gross profit margins. Our raw material chemical suppliers have informed us that there will likely be ~~significant~~continued price increases in the coming months due to tight raw material supplies as well as continued high market demand. The supply chain issues in procuring material from overseas has caused higher costs and long delays for our raw materials due to operating issues at the supplier manufacturing facilities and increased difficulties in receipt of imported material. Despite the changes in the government due to the election, we also expect tariffs to remain in place for the foreseeable future.steel rims. We expect these headwinds to continue to pressure our Gross Margins ~~for~~throughout the ~~rest~~remainder of ~~the~~ fiscal year 2022. We have mitigated some of these issues by increasing the sales prices of our tires. However, continuing increases in raw material costs may result in reduced product sales if we are forced to turn away sales because they are at ~~a minimum. We~~sales price levels that are ~~looking~~unprofitable, or if customers refuse to purchase our products at ~~ways to mitigate these adverse factors, including~~ the ~~adjustment of product pricing to our customers.~~increased prices.

Gross Profit. Gross profit for the quarter ended December 31, ~~2020~~2021 was ~~$301,447~~$330,065 compared to ~~$298,682~~$301,447 for the same period in ~~2019.~~2020. This increase of ~~$2,765~~$28,618 or ~~9.9%~~9.6% over the same period in ~~2019,~~2020, was primarily driven by ~~the~~ greater sales ~~of higher margin products.~~volumes. The December 31, ~~2020~~2021 gross profit reflects a ~~25.0%~~22.7% gross margin for product sales compared to a gross margin on product sales of ~~28.0%~~25.0% in ~~2019.~~2020. Higher raw material costs that were not completely offset by higher sales prices for our tire products reduced our Gross Margins in the recent quarter.
13
Table of Contents

Research & Development Expenses (R&D). Research and development expenses for the quarter ended December 31, ~~2020~~2021 were ~~$30,507~~$24,399 compared to ~~$35,897~~$30,507 for the same period in ~~2019.~~2020. We continue to invest in product formulation and new product development where appropriate to support our business plan.

Sales & Marketing Expenses. Sales and marketing expenses for the quarter ended December 31, ~~2020~~2021 were ~~$51,102, virtually identical~~$74,048 as compared to ~~the $51,309 spent on Sales and Marketing expenses~~$51,102 for the same period in ~~2019.~~2020. The difference between periods relates to higher sales commissions paid and trade show expenses as the Company attended its first trade show since 2019 in October 2021, when compared to the same three-month period in 2020.

General & Administrative Expenses. General and administrative expenses for the quarter ended December 31, ~~2020~~2021 were ~~$186,014~~$213,392 compared to ~~$172,936~~$186,014 for the same period in ~~2019,~~2020, driven by higher compensation costs, bank fees, consulting expense partially offset by lower legal ~~and depreciation~~ costs.

Other Income (Expense), net. Other income, net, for the quarter ended December 31, ~~2020~~2021 was ~~$143,028~~$801 compared to ~~an expense position of $145~~$143,028 for the same period in ~~2019.~~2020. The ~~primary driver of this variance was the~~ forgiveness of our loan from the Small Business Administration Paycheck Protection ~~Program.~~Program (“PPP loan”) was received in November 2020 and accounted for the majority of the gain in the quarter ended December 31, 2020.

Net Income. Net income for the quarter ended December 31, ~~2020~~2021 was ~~$176,852,~~$19,027, compared to net income of ~~$38,395~~$176,852 for the same period in ~~2019, resulting~~2020. The forgiveness of our PPP loan in the quarter ended December 31, 2020 resulted in a ~~positive increase~~gain of $149,570. Without this one-time gain, the difference in net income ~~of $138,457.~~between the periods was $27,282, or a ~~363.2% increase~~31.3% decrease in net income. The decrease in net income ~~versus~~for the ~~same~~ period ~~in 2019.~~ended December 31, 2021 was also driven by lower Gross Margins due to higher material and operating costs incurred during the quarter

Six Months Ended December 31, ~~2020~~2021 Compared to December 31, ~~2019~~2020

Net Revenues. Net revenues of ~~$2,256,276~~$2,849,113 for the six-month period ended December 31, ~~2020,~~2021, represents a ~~10.2%~~26.3% increase over net sales of ~~$2,046,737~~$2,256,276 for the same period in ~~2019.~~2020. These results ~~were above~~exceeded our expectations as we continued to navigate the challenges presented by the COVID-19 pandemic, including limited raw material availability, higher supply costs and ~~driven by increased demand for~~other supply chain issues. We expect our polyurethane foam ~~tires from current customers. With~~products to continue to constitute the ~~expected continuation~~majority of ~~the reopening of businesses closed~~our sales going forward. The increase is due to ~~COVID -19, as well as an increasing stronger overall economy, we expect sales for~~increases in our prices to offset the ~~rest of the fiscal year to be strong.~~raw material prices plus increase in demand.

Cost of Revenues. Cost of revenues for the six-month period ended December 31, ~~2020~~2021 was ~~$1,611,109~~$2,134,276 or ~~71.4%~~74.9% of sales compared to ~~$1,459,357~~$1,611,109 or ~~71.3%~~71.4% of sales for the same period in ~~2019. This result was achieved despite~~2020. We experienced higher raw material costs, particularly chemical feedstocks, during the ~~previously noted~~recent quarter which pressured gross profit margins. Our chemical suppliers have informed us that there will likely be continued price increases in the coming months due to a tight supply of available raw materials in the market, as well as increased market demand. The supply chain issues, particularly in procuring material ~~costs.~~from overseas, has caused higher costs and long delays for our steel rims. We ~~were able~~expect these headwinds to ~~mitigate~~continue to pressure our Gross Margins throughout fiscal year 2022. We have mitigated some of these ~~costs through~~issues by increasing the ~~sale~~sales prices of ~~higher margin products compared to the previous period in 2019.~~our tires.

Gross Profit. Gross profit for the six-month period ended December 31, ~~2020~~2021 was ~~$645,167~~$714,837 compared to ~~$587,380~~$645,167 for the same period in ~~2019,~~2020, an increase of ~~$57,787~~$69,670 or ~~9.9%~~10.9% over the same period in ~~2019.~~2020. The December 31, ~~2020~~2021 gross profit reflects a ~~28.6%~~25.1% gross margin for product sales compared to a gross margin on product sales of ~~28.7%~~28.6% in ~~2019.~~2020. The current period results were adversely affected by higher raw material prices.

Research & Development Expenses (R&D). Research and development expenses for the six-month period ended December 31, ~~2020~~2021 were ~~$50,978~~$45,966 compared to ~~$61,913~~$50,978 for the same period in ~~2019. The lower expenses~~2020. We continue to invest in ~~the fiscal year 2020 period are driven by lower tire testing expenses compared~~product formulation and new product development where management deems appropriate to ~~the year earlier period.~~support our business plan.
14

~~Table of Contents~~

Sales & Marketing Expenses. Sales and marketing expenses for the six-month period ended December 31, ~~2020~~2021 were ~~$110,902~~$142,421 compared to ~~$94,780~~$110,902 for the same period in ~~2019.~~2020. The difference between periods relates to higher sales commissions paid ~~offset by lower~~and trade show ~~expenses, when compared to the same six-month period in 2019.~~expenses.

General & Administrative Expenses. General and administrative expenses for the six-month period ended December 31, ~~2020~~2021 were ~~$396,500~~$446,200 compared to ~~$366,366~~$396,500 for the same period in ~~2019. The difference between periods is due to~~2020, driven by higher compensation costs, bank fees, consulting expense partially offset by lower legal ~~expenses and depreciation~~ costs.
14
Table of Contents

Other Income, net. Other income for the quarter ended December 31, ~~2020~~2021 was ~~$143,848~~$3,917 compared to ~~$2,977~~$143,848 for the same period in ~~2019.~~2020. The primary driver of this variance is the forgiveness of our loan from the Small Business Administration Paycheck Protection ~~Program.~~Program, received in November 2020.

Net Income. Net income for the six-month period ended December 31, ~~2020~~2021 of ~~$230,635~~$84,127 compared to a net income of ~~$67,298~~$230,635 for the same period in ~~2019, an increase~~2020, a decrease in net income of ~~$163,337,~~$146,508, or ~~244.8%~~62.8%. Without the effect of the PPP loan forgiveness mentioned earlier, the net income for the six-month period ending December 31, 2020 would be $81,065, and the comparison with the period ending December 31, 2021 would show a net income increase of $3,062, or 3.63% compared to the period ending December 31, 2020.

Liquidity and Capital Resources

Cash Flows

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

Six Months ended Dec. 31,

(in 000’s)

2020

2019

Net cash used in operating activities
$ (29
)
$ (162
)
Net cash used in investing activities
(11
)
(30
)
Net cash used in financing activities
- (25
)
Net decrease in cash during the period
$ (40
)
$ (217
)

Six Months ended Dec. 31,

(in 000’s)

2021

2020

Net cash provided (used) by operating activities
$ 178 $ (29
)
Net cash used by investing activities
(150
)
(11
)
Net cash used by financing activities
- -
Net increase (decrease) in cash during the period
$ 28 $ (40
)

~~Net Cash Used~~The Company has evaluated its current cash position relative to its cash requirements in the future and has determined its cash levels are sufficient to cover its cash needs. The Company enjoys a strong level of cash on hand as well as an unused credit line facility. These cash resources have been critical during the past year as working capital needs have increased due to the increased costs and extended time required to receive imported materials (which are paid for when they are ready to ship from the manufacturer, not after they are received for use by ~~Operating Activities.~~ ~~In 2020,~~ the Company) as well as Management’s decision to increase chemical stock levels when extra material became available for purchase. The Company ~~decided to use a portion~~completed its upgrade of its ~~available~~Production pouring systems in September 2021, which was completely paid from 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~~reserves. The increase in the period. During the fiscal 2021 second quarter we also saw a rise in finished product inventories in advance of our Christmas holiday shutdown, in order to be prepared for customer product shipments in early January. Net cash used in operating activities was $29,042 for the period ended December 31, 2020 compared to net cash provided by operating activities is due to lower levels of ~~$161,525 for~~Account Receivables compared to the ~~same period in 2019.~~ year earlier period.

~~Non-cash items include depreciation and amortization, stock-based compensation, the forgiveness of~~The major driver in our loan from the Small Business Administration Paycheck Protection Program, proceeds of which were received in fiscal year 2020, and asset impairment.  Amortization includes the amortization of our right to use asset, our facility rent. Our net income was $230,635 for the six-month period ended December 31, 2020 compared to net income of $67,298 for the same six-month period in 2019.  The net income for the six-month period ended December 31, 2020 included non-cash expenses for depreciation and amortization of $108,161, stock-based compensation of $23,810, debt forgiveness of $149,570, and loss on impairment of assets $20,078.  As of December 31, 2019, depreciation and amortization was $120,762 and stock-based compensation totaled $19,654.
~~Net Cash Used~~cash provided by ~~Investing Activities.~~  ~~Net cash used by investing~~operating activities was ~~$10,785 for~~ the ~~six-month period ended December 31, 2020 and $30,318 for~~collection of accounts receivable offset by increased costs (and therefore value) of inventory on the ~~same period in 2019.  In fiscal year 2021, we invested in leasehold improvements by replacing our plant office HVAC units.~~
~~Net Cash Used by Financing Activities~~. Net cash used by financing activities was $315 for the six-month period December 31, 2020 and $25,121 for the same period in 2019. In fiscal year 2021 this was payment towards notes payable related to our forklift tires.balance sheet.

Our principal sources of liquidity consist of cash on hand 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 December 31, ~~2020, the~~2021, this credit line had not been used.

Historically, the current management team 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.
15

~~Table of Contents~~
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 December 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 February ~~8, 2021,~~9, 2022, our total cash balance was ~~$673,535,~~$359,764, none of which is ~~restricted;~~restricted, accounts receivables ~~were $429,709; and~~was $660,321, inventory, net of reserves for slow moving or obsolete inventory, and other current assets was ~~$605,814.~~$713,581. Our total indebtedness, specifically which management reviews for cash management, was ~~$1,057,996~~$1,102,085 and includes ~~$497,645~~$652,662 in accounts payable and accrued expenses, $24,445 in deferred revenue, $2,000 in current portion of long-term debt, ~~$61,551~~$60,878 in long-term debt and ~~$496,800~~$362,100 in total operating lease liability.

We continue to take actions to improve our liquidity and access to capital resources. 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 U.S. government Paycheck Protection Program, a Small Business Administration loan program initiated to combat the negative effects of COVID-19 on U.S. small businesses. These new sources of liquidity have been key tools to provide the Company with the tools to overcome negative effects of the coronavirus on our business.bank.

~~We are focused on the sale and distribution~~
15
Table of profitable product lines. Management continues to look for further financing facilities at affordable terms that will allow the Company to maintain sufficient working capital to capitalize on new 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.
Contents

In assessing our liquidity, management reviews and analyzes our current cash, accounts receivable, accounts payable, capital expenditure commitments, cash requirements and other obligations. In connection with the preparation of our financial statements for the ~~period~~fiscal year ended ~~December 31, 2020,~~June 30, 2021, we have analyzed our cash needs for the next ~~twelve~~12 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 until the negative effects of the COVID-19 pandemic can be fully quantified and addressed.~~ Although we have seen a significant increase in business activity in ~~the~~ recent ~~quarter, we are not assured~~quarters, there can be no assurance that a resurgence of the COVID-19 virus will not cause ~~another~~a disruption in our markets that causes a significant decrease in demand from our customers. While many government restrictions have been relaxed and the economy has continued to open in more jurisdictions, the emergence of new variants of COVID-19 may lead to possible resurgences of the virus. This could result in new restrictions on our customers or suppliers located or servicing these affected jurisdictions. Among the adverse consequences caused by the pandemic have been continued supply chain disruptions, resulting in material shortages and delays, as well as increased material costs. The long-term financial impact on our business cannot be reasonably estimated at this time. As a result, the effects of COVID-19 may not be fully reflected in our financial results until future periods. Refer to “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 for a description of the material risks that the Company currently faces including in connection with COVID-19. If there is a new shutdown of the economy, ~~and because we do not qualify at present~~reduction in demand for ~~additional Paycheck Protection Program funding,~~our products or other adverse effect on our business, 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 February ~~8, 2021,~~9, 2022, the Company has approximately ~~27,547,000~~16,937,000 shares authorized and available for issuance. Although we are reluctant to raise money through stock sales at what we believe are dilutive share prices, these authorized but unissued and unreserved shares of our common stock can be utilized, if necessary, to raise new funds.

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.

16

~~Table of Contents~~
Cautionary Note Regarding Forward Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding economic conditions in general and in the agricultural market, in particular, ~~the impact of the COVID-19 pandemic~~positive sales trends and ~~the reopening of the economy and anticipated increase in product sales~~ resulting therefrom, the possibility and expected effect of future shutdowns in connection with COVID-19, operational actions taken by us to reduce expenditures as the economy continues to recover, expected sales levels for the remainder of the fiscal year ending June 30, 2021, our ability to increase our authorized capital and pursue future financings, increasedprofits, continued demand for our products and ~~resulting~~those produced by our customers, our intention to seek out and engage in a partnership or other arrangement with one or more OEMs, our ability to successfully manage and respond to supply chain issues and other uncertainties, our sales prospects in light of new products such as the potential development of tires for large industrial and ~~profits, continued strength~~agricultural equipment, price increases in response to increases in raw material costs and the results of such price increases on our ~~current polyurethane foam tire market segment,~~gross margins, and the ~~prudence~~availability of ~~our research and development investments~~capital and liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2020.~~2021. In addition, there is a risk that the economic repercussions from COVID-19 and supply chain disruptions may be more severe or prolonged than we currently expect, particularly with the new strains emerging and the uncertainty if existing vaccinations will be effective against the new ~~strains.~~strains, and vaccine hesitancy. Additionally, there is a risk that our price increases or other challenges we face and actions we take in response may result in lower revenues or the loss of future business from our customers, or that any strategic partnerships or business arrangements do not yield the positive results intended or result in unanticipated adverse consequences, including due to potential friction between the parties. 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.

17
16
Table of Contents

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~~Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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

18
17
Table of Contents

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

~~In addition to below,~~For information regarding risk factors, see “Part I. Item 1A. Risk Factors,” in our ~~2020~~2021 Annual Report.

Recent market condition changes in the chemical markets, which we mentioned previously, represent a new risk factor to our operation. We have been informed that manufacturing plant problems, combined with an increase in demand for these chemical feedstocks, has created a shortage of available supply for raw materials, with several of these suppliers declaring a “force majeure”. To date, we have been able to obtain the necessary materials to meet the demand requirements of our customers, albeit at higher raw material prices. We expect these higher prices to continue to pressure gross margins for the remainder of the fiscal year 2021. We are currently evaluating our product pricing and will be likely implementing pricing adjustments to offset these raw material increases. We also continue to work with our suppliers to maintain our access to adequate quantities of raw materials to meet the increased demand for our products.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

19
18
Table of Contents

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

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)

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

Amended and Restated Bylaws of the Company

8-K

12/8/21

3.02

10.1

Employment Agreement between the Company and Michael Sullivan

8-K

1/13/22

10.1

10.2

2022 Equity Incentive Plan

Filed
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)

20
19
Table of Contents

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: February ~~12, 2021~~11, 2022

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)

2120
iso4217:USD xbrli:shares

	For the Six Months Ended December 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	230,635		$	67,298
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization expense		108,161			120,762
Stock based compensation		23,810			19,654
Gain on debt extinguishment		(149,570	)		0
Loss on asset disposal/impairment		20,078			0
Changes in operating assets and liabilities:
Accounts receivable		10,060			(39,633	)
Inventory and inventory reserve		(42,890	)		(111,706	)
Prepaid and other current assets		21,195			(28,823	)
Accounts payable and accrued expenses		(166,270	)		(99,169	)
Deferred revenue		(11,351	)		(19,408	)
Lease liability payable, operating lease		(72,900	)		(70,500	)
Net Cash Used by Operating Activities		(29,042	)		(161,525	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and equipment		0			(30,318	)
Cash paid for leasehold improvements		(10,785	)		0
Net Cash Used by Investing Activities		(10,785	)		(30,318	)
CASH FLOWS USED IN FINANCING ACTIVITIES
Payments on notes payable		(315	)		(25,121	)

NET DECREASE IN CASH		(40,142	)		(216,964	)

CASH AT BEGINNING OF PERIOD		666,756			557,026
CASH AT END OF PERIOD	$	626,614		$	340,062

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
					For the Six Months Ended December 31,
					2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income					$	84,127		$	230,635
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense						119,925			108,161
Stock based compensation						62,313			23,810
Gain on debt extinguishment						-			(149,570	)
Loss on asset disposal						-			20,078
Changes in operating assets and liabilities:
Accounts receivable						436,154			10,060
Prepaid and other current assets						(90,988	)		21,195
Inventory and any change in inventory reserve						(268,612	)		(42,890	)
Accounts payable and accrued expenses						(85,766	)		(166,270	)
Deferred revenue						(5,768	)		(11,351	)
Lease liability payable, operating lease						(73,800	)		(72,900	)
Net Cash Provided (Used) by Operating Activities						177,585			(29,042	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment						(147,722	)		-
Cash paid for leasehold improvements of an operating lease						(2,750	)		(10,785	)
Net Cash Used by Investing Activities						(150,472	)		(10,785	)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on notes payable						(448	)		(315	)
Net Cash Used by Financing Activities						(448	)		(315	)

NET INCREASE (DECREASE) IN CASH						26,665			(40,142	)
CASH AT BEGINNING OF PERIOD						516,192			666,756
CASH AT END OF PERIOD					$	542,857		$	626,614

NON-CASH FINANCE ACTIVITIES

Interest paid	$	0	$	776	$	-		$	776
Income taxes paid	$	0	$	0	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

Write off of fully depreciated and disposed fixed assets	$	124,287	$	0	$	-		$	124,287
Use of store inventory, capitalized as fixed asset	$	6,600	$	0	$	36,327		$	6,600
Accrued preferred stock dividends	$	0	$	50,000
Issuance of common stock previously accrued for	$	0	$	583

	December 31, 2020			June 30, 2020			December 31, 2021			June 30, 2021
	(Unaudited)						(Unaudited)
Raw Materials	$	272,914		$	263,573		$	460,164		$	416,709
Finished Goods		597,343			618,104			743,747			525,565
Inventory reserve		(114,006	)		(87,006	)		(112,677	)		(119,652	)
Inventory – net (Current and long term)	$	756,251			794,671		$	1,091,234			822,622

	December 31, 2020								June 30, 2020
				Weight Average			Intrinsic					Weight Average			Intrinsic
	Shares			Exercise Price			Value		Shares			Exercise Price			Value
Outstanding beginning of period		2,870,000		$	0.12					3,970,000		$	0.12
Granted		0		$	0.00					0		$	0.00
Expired/Cancelled		(1,840,000	)	$	(0.12	)				(1,100,000	)	$	(0.10	)
Exercised		0		$	0.00					0		$	0.00
Outstanding end of period		1,030,000		$	0.12		$	0		2,870,000		$	0.12		$	0
Exercisable		1,030,000		$	0.12		$	0		2,870,000		$	0.12		$	0

		Outstanding						Exercisable
Range of Exercise Prices		Number Outstanding at December 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2020		Weighted Average Remaining Contractual Life
$	0.08		150,000		0.92	$	0.08		150,000		0.92
$	0.10		480,000		1.00	$	0.10		480,000		1.00
$	0.17		400,000		0.92	$	0.17		400,000		0.92
			1,030,000						1,030,000

	For the Three Months Ended December 31,									For the Six Months Ended December 31,
	(in 000’s)						Change			(in 000’s)						Change
	2020			2019			2020 vs. 2019			2020			2019			2020 vs. 2019
Net revenues	$	1,205		$	1,067			12.9	%	$	2,256		$	2,047			10.2	%
Cost of revenues		(904	)		(768	)		17.6	%		(1,611	)		(1,460	)		10.3	%
Gross profit		301			299			0.3	%		645			587			9.9	%
Research & Development		(31	)		(36	)		(13.9	%)		(51	)		(62	)		(17.7	%)
Sales and Marketing		(51	)		(51	)		0.0	%		(111	)		(95	)		16.8	%
General and Administrative		(186	)		(174	)		6.9	%		(396)	)		(366	)		8.2	%
Other income (expense)		143			-			100.0	%		144			3			4,700	%
Net income		176			38			363.2	%		231			67			244.8	%
Preferred stock dividend		-			(25	)		(100.0	%)		-			(50	)		(100.0	%)
Net income	$	176		$	13			1,253.8	%	$	231		$	17			1,258.8	%

	Six Months ended Dec. 31,
	(in 000’s)
	2020			2019
Net cash used in operating activities	$	(29	)	$	(162	)
Net cash used in investing activities		(11	)		(30	)
Net cash used in financing activities		-			(25	)
Net decrease in cash during the period	$	(40	)	$	(217	)

		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
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)

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)