AMERITYRE CORP - Quarter Report: 2009 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended:

December 31, 2009

[  ] 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)

(702) 294-2689

(Issuer’s telephone number)

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

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

  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨      Accelerated filer ¨         Non-accelerated filer    ¨       Smaller reporting company ý

  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  Noý

 The number of shares outstanding of Registrant’s Common Stock as of February 12, 2010: 30,987,945

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a complete presentation of our financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Our unaudited balance sheet at December 31, 2009 and our audited balance sheet at June 30, 2009; the related unaudited statements of operations for the three and six month periods ended December 31, 2009 and 2008; and the related unaudited statement of cash flows for the six month periods ended December 31, 2009 and 2008, are attached hereto.

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

December 31, 2009 and June 30, 2009

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.  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.  Although we believe the disclosures and information presented are adequate to make the information not misleading. These interim condensed financial statements should be read in conjunction with our most recent audited financial statements and notes thereto included in our June 30, 2009 Annual Report on Form 10-K.  Operating results for the three and six months ended December 31, 2009 are not necessarily indicative of the results that may be expected for the current fiscal year ending June 30, 2010.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

On July 1, 2009, the FASB issued the FASB Accounting Standards Codification (the “Codification”). The Codification became the single source of authoritative nongovernmental U.S. GAAP, superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”) and related literature. The Codification eliminates the previous US GAAP hierarchy and establishes one level of authoritative GAAP. All other literature is considered non-authoritative. However, rules and interpretive releases of the Securities Exchange Commission (“SEC”) issued under the authority of federal securities laws will continue to be sources of authoritative GAAP for SEC registrants. The Codification was effective for interim and annual periods ending after September 15, 2009. The Company adopted the Codification for the quarter ending September 30, 2009.  There was no impact to the financial results as this change is disclosure-only in nature.

Stock Based-Compensation Expense

Since July 2005, we account for stock-based compensation under the provisions of Accounting Standards Codification 718, Compensation – Stock Compensation (ASC 718), formerly SFAS 123(R). Our financial statements as of and for the three and six month periods ended December 31, 2009 and 2008 reflect the impact of ASC 718.  Stock-based compensation expense recognized under ASC 718 for the six month periods ended December 31, 2009 and 2008 was $37,437 and $140,959, respectively, related to employee stock options issued during the respective periods.

ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Statement of Operations. Stock-based compensation expense recognized in our Statements of Operations for the six month periods ended December 31, 2009 and 2008 assumes all awards will vest, therefore no reduction has been made for estimated forfeitures.

Basic and Fully Diluted Net Loss Per Share

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

	For the Six Months Ended December 31,
	2009		2008
Loss (numerator)	$	(737,194)	$	(2,041,883)
Shares (denominator)		28,704,537		23,445,736
Per share amount	$	(0.03)	$	(0.09)

Our outstanding stock options and warrants have been excluded from the basic and fully diluted net loss per share calculation. We excluded 1,574,780 and 5,102,370 common stock equivalents for the six month periods ended December 31, 2009 and 2008, respectively, because they are anti-dilutive.

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

December 31, 2009 and June 30, 2009

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Income Tax

We file federal income tax returns in the U.S. and state income tax returns in those state jurisdictions where we are required to file. With few exceptions, we are no longer subject to U.S. federal, state or and local income tax examinations by tax authorities for years before June 30, 2004. We adopted the provisions of Accounting Standards Codification 740, Income Taxes (ASC 740), (formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes), on July 1, 2007, the first day of our fiscal year. As a result of the implementation of Accounting Standards Codification 740, no adjustment should be made for unrecognized tax benefits.

There are no tax positions included in the balance at December 31, 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Our policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

NOTE 3 – GOING CONCERN

Our financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have historically incurred significant losses which have resulted in a total retained deficit of $55,380,414 at December 31, 2009 which raises substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

We have taken certain steps to reduce our operating and financial requirements while expanding our revenues in an effort to enable us to continue as a going concern until such time that revenues are sufficient to cover expenses, including: (1) we implemented numerous cost reduction measures, including reduced officer and board compensation, over the last seven months of the 2009 fiscal year and have carried the reductions into the current fiscal year. We will continue to monitor our overall selling, general and administrative expenses throughout the current fiscal year, reducing wherever possible; (2) we revised the selling prices for our products at the beginning of the fiscal year to adjust for raw material increases to our customers; (3) we re-focused our sales and marketing efforts on three product areas with products already in production, low duty cycle foam tires, tire fill and solid tires. We have expanded sales in all three areas and expect to continue to do so during the fiscal year.  We expect the increase in revenues from the expanded commercialization activities should reduce net loss in the near term and move us closer to profitability.

To supplement our cash needs during the 2010 fiscal year, on September 21, 2009, we completed a private placement of our common stock for aggregate proceeds of approximately $500,000.  On October 19, 2009, we received an aggregate loan of $150,000 from the members of the Clean Green Partnership per the credit agreement referenced in Note 5 below.  Under the credit agreement, Clean Green Partnership had the option to convert the balance of the loan to common stock at $0.21 per share.  The members elected to immediately convert the funds loaned into stock per the credit agreement. We have analyzed our cash needs for fiscal 2010 and concluded that our available cash may not be sufficient to meet our current minimum working capital, capital expenditure and other cash requirements for fiscal 2010, especially if our sales revenues do not meet our expectations. If necessary, we may seek to raise additional capital through the issuance of debt or equity securities. Our ability to obtain financing through the offer and sale of our securities is subject to market conditions and other factors beyond our control. We may also issue common stock in lieu of cash as compensation for certain employment, development, and other professional services.

Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plan described above, and attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

December 31, 2009 and June 30, 2009

NOTE 4 - STOCK OPTIONS AND WARRANTS

General Option Information

During the six month periods ended December 31, 2009 and 2008, we did not grant any options.

A summary of the status of our outstanding stock options as of December 31, 2009 and June 30, 2009 and changes during the periods then ended is presented below:                                                       

The following table summarizes the range of outstanding and exercisable options as of December 31, 2009:

As of December 31, 2009 the unrecognized stock-based compensation related to stock options was approximately $104,327. This cost is expected to be expensed over the next 1.5 years.

General Warrant Information

The following table summarizes outstanding warrants to purchase our common stock at December 31, 2009.

Number of Warrants Outstanding at December 31, 2009	Expiration Date	Exercise Price
103,825	2/1/2011	$5.50
515,955	2/11/2011	$0.50

AMERITYRE CORPORATION

Notes to the Unaudited Financial Statements

December 31, 2009 and June 30, 2009

NOTE 5 - STOCK ISSUANCES

In December 2008, the Board of Directors agreed to annual board compensation of $12,000, all payable through the grant of common stock (30,000 shares based on the closing price of $0.40 per share on December 1, 2008 payable quarterly). In addition to the above compensation, the Board of Directors approved annual compensation for the chairman of the Audit Committee of $25,000, payable quarterly in cash and/or stock.

In October 2009 we issued an aggregate of 37,500 shares (7,500 shares each) of our restricted common stock to our directors as compensation for their services as members of our board of directors for the period commencing June 1, 2009 through August 31, 2009. The aggregate value of the shares was $15,000, based on the closing price of $0.40 per share, the date the shares were approved to be issued during December 2008.

During October 2009, we issued 6,250 shares of our restricted common stock to the Chairman of our audit committee as partial compensation for his services as Chairman for the period commencing June 1, 2009 through August 31, 2009. The value of the shares was $2,500, based on the closing price of $0.40 per share, on the date the shares were approved to be issued during December 2008.

On July 23, 2009, we entered into a credit agreement with Clean Green Partnership, a partnership which includes Louis Haynie and Henry Moyle, both directors, under which we could receive loans up to an aggregate of $500,000 subject to interest of 1% per month, secured by our inventory, convertible at the lender’s discretion to common stock at a conversion price of $0.21 per share. On October 19, 2009, we received an aggregate loan of $150,000 from the members of the Clean Green Partnership per the credit agreement.  The members elected to immediately convert the funds loaned into stock per the credit agreement.  Accordingly, on October 23, 2009, we issued an aggregate of 714,285 shares.  

During October 2009, we issued 30,952 shares of an outside consultant as partial compensation for his assistance on research and development services. The value of the shares was $13,000, based on the closing price of $0.42 per share.

NOTE 6 - INVENTORY

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

	December 31, 2009 (Unaudited)		June 30, 2009
Raw Materials	$	151,157		$	191,384
Finished Goods	$	542,513		$	450,703
Total Inventory	$	693,670		$	642,087

NOTE 7 – SUBSEQUENT EVENTS

On January 15, 2010, the Company notified The Nasdaq Stock Market (“Nasdaq”) of its intent to file its Form 25 with the Securities and Exchange Commission to delist the Company’s common stock from Nasdaq.  The Company has been unable to meet minimum requirements of Nasdaq’s Equity Standard Listing Rule 5550(b) because the Company does not have a minimum of $2,500,000 in stockholders’ equity, $35,000,000 market value of listed securities, or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. The Form 25 was filed on January 26, 2010.  Pursuant to the Form 25, the Company’s common stock will no longer be traded on Nasdaq after February 4th, 2010.  The Company has asked a market maker to make application on the Company’s behalf to have its common stock quoted on Nasdaq’s Over the Counter Bulletin Board (“OTCBB”).

Management has evaluated subsequent events as of February 15, 2010, and has determined there are no further subsequent events to be reported.

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

This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance or financial condition.  Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. 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

Since our inception in 1995, we have been engaged in the research and development of technologies related to the formulation of polyurethane compounds and the manufacturing process for producing tires constructed of polyurethane.  We believe that we have developed unique polyurethane formulations that, when used in tire applications, substantially simplify the production process and allow for the creation of products with superior performance characteristics, including abrasion resistance and load-bearing capabilities, than conventional rubber tires.  We also believe that the manufacturing processes we have developed to produce polyurethane tires are more efficient than traditional 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.  Using our polyurethane technologies, we believe tires can be produced that last longer, are less susceptible to failure and offer improved fuel economy.  

Polyurethane foam tire sales are our most significant products to date, however we believe Elastothane^® and Amerifill® are significant to our potential future growth. We are concentrating on marketing three principal product areas: low duty cycle foam tires, tire fill and solid tires. We continue to work on developing and testing foam fire retardant material, composite tires and pneumatic tires. Our most recent activities in these areas are set forth below:

Low duty foam tires – The sale of polyurethane foam tires to original equipment manufacturers, distributors and retail stores continues to account for most of our revenue at this time. We have the ability to produce a broad range of products for the low-duty cycle tire market. We are continuing our marketing efforts and expanding our product lines by introducing new sizes and tires for specific applications.

Tire fill – Light weight fill-Through research and testing, we have found that our Amerifill® material is not compatible with most tire fill equipment in use today; therefore our customers must also acquire the necessary tire fill equipment to use our materials. In order to penetrate this market we are supplying our customers with tire fill equipment at small margin.  Profits from this initiative will be derived from the sale of Amerifill® to our customers. Since launching this program in the spring of 2008, we have supplied a number of fill machines and have now begun to supply the Amerifill® material. Elastomer tire fill is currently being reformulated to become a commercially marketable product.

Solid tires – In July 2009, we shipped the first orders of our new line of long wearing, polyurethane forklift tires to K-2 Industrial Tire Inc. ("K-2"). K-2 has partnered with us for worldwide introduction and distribution of the Kryon(TM) brand tire line. K-2 intends to offer a complete line of press-on tires for the forklift industry with our unique, proprietary polyurethane formulations. The Kryon forklift tires are made of non-marking polyurethane, a significant advantage over non-marking rubber tires that are usually priced at a premium to regular rubber tires.  We continue the testing and finalizing of the formulation.  There are other potential commercial applications for the solid polyurethane elastomer tires that we will continue to explore.

Polyurethane foam fire retardant material – We have formulated and tested small quantities of a flame retardant polyurethane foam for use as packaging material. The flame retardant material has performed well in flammability testing and exceeded the requirements of the UL 94-HB (Horizontal Burn) test. We are currently evaluating commercial applications for this product. We expect to begin selling this product in our fiscal third quarter.

Composite tires – We believe there are multiple applications for use of our polyurethane elastomer material as treads for new or retread tire casings. However, economic constraints may have limited development and market penetration in this area. The first potential commercial application for this technology was initiated in fiscal 2008 by Desert Research Technology (“DRT”), to manufacture paddle-type sand tires. We have supplied DRT with samples of the chemical system necessary to produce the tires. Our licensee, Qingdao Qizhou Rubber Company, LTD. (“Qingdao”) has told us they will be further delayed in commencing OTR tire retreads due to financial constraints

and we cannot estimate the extent of the delay at this time. However, if Qingdao’s OTR tire retread facility is eventually made operational, Qingdao will purchase the polyurethane elastomer chemical systems necessary to produce the OTR tire retreads directly from us.

Pneumatic tires – We continue to evaluate the properties of our tires in the laboratory and on vehicles. We have also provided prototype tires to other tire or automotive manufacturers for performance evaluations, which may include uniform tire quality grading or other performance testing and/or testing to non-U.S. safety standards. In addition, we are still working to finalize elements of the manufacturing process. We are discussing the construction and installation of a pilot manufacturing facility capable of demonstrating this production capability with potential strategic partners.

Factors Affecting Results of Operations

Our operating expenses consisted primarily of the following:

·

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

·

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

·

Research and development expenses, which consist primarily of equipment and materials used in the development of 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

·

Amortization of deferred compensation that results from the expense related to certain stock options to our employees.

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 accounting principles generally accepted in the United States.  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.

Revenue Recognition

Revenue for products is recognized when the sales amount is determined, shipment of goods to the customer has occurred and collection is reasonably assured. Generally, we ship all of our products FOB origination. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term.

Valuation of Intangible Assets and Goodwill

At December 31, 2009, we had capitalized patent and trademark costs, net of accumulated amortization, totaling $592,678. 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 until a patent has been issued.  We evaluate the recoverability of intangibles and review the amortization period on a continual basis utilizing the guidance of

Accounting Standards Codification 350, Intangibles – Goodwill and Other (ASC 350), (formerly Statement of Financial Accounting Standards “SFAS” No. 142, "Goodwill and Other Intangible Assets"). In June 2009, our management team assessed several of our pending patents and trademarks and decided to abandon several of them due to they no longer apply to our current manufacturing processes. We test our patents and trademarks for impairment at least annually and whenever events or changes in circumstances indicated that the carrying value may not be recoverable.  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.

Inventory

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

Stock-Based Compensation

Equity securities issued for services rendered have been accounted for at the fair market value of the securities on the date of authorization.  On July 1, 2005, we adopted the Accounting Standards Codification 718, Compensation – Stock Compensation (ASC 718), formerly SFAS No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”).  ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Statement of Operations. Under ASC 718, stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The stock-based compensation expense recognized under ASC 718 for the six month periods ended December 31, 2009 and 2008 was $37,437 and $140,959, respectively, and assumes all awards will vest.  Therefore, no reduction has been made for estimated forfeitures.

The valuation of options and warrants granted to unrelated parties for services are measured as of the earlier of the date at which a commitment for performance by the counterparty to earn the equity instrument is reached, or the date the counterparty’s performance is complete.  Pursuant to the requirements of Emerging Issues Task Force No. 96-18, the options and warrants will be revalued in situations where they are granted prior to the completion of the performance.

Seasonality

A substantial majority of our sales are to customers within the United States. We experience some seasonality in the sale of our closed-cell polyurethane foam tires for bicycles and lawn and garden products because sales of these products generally decline during the winter months in the United States.  Sales of our closed-cell polyurethane form tire products generally peak during the spring and summer months; typically resulting in greater sales volumes during the third and fourth quarters of the fiscal year.

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 revenues and cash flows. These key performance indicators include:

·

Net revenues, which consists of product sales revenues, equipment sales revenues and license fees, if any;

·

Sales revenue, net of returns and trade discounts, which 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 revenues of our products and the mix of product and equipment sales and license fees, if any;

·

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

·

Distribution of revenue across our products offered.

·

The following summary table presents a comparison of our results of operations for the three and six month periods ended December 31, 2009 and 2008 with respect to certain key financial measures.  The comparisons illustrated in the table are discussed in greater detail below.

·

(1) For the three and six months ended December 31, 2008 the amounts include zero and $33,333, respectively, of license revenue with no associated cost of revenues for the period.

·

(2) Includes deferred compensation for employee stock options of $18,718 and $70,480  in the three month periods ended December 31, 2009 and 2008 respectively, and deferred compensation for employee stock options of $37,437 and $140,959 in the six month periods ended December 31, 2009and 2008 respectively.

·

(3) For the six months ended December 31, 2008 this amount includes $53,123 for the pro rata value of the stock option granted to Mr. Steinke during the period for services pursuant to a consulting agreement dated September 1, 2007. It also includes $18,261, representing the pro rata value of the stock option granted to Mr. Chacon during the period for services pursuant to a consulting agreement dated May 1, 2008.

Three Month Period Ended December 31, 2009 Compared to December 31, 2008

Net revenues.   We had net revenues of $750,240 for the three month period ended December 31, 2009, a 5.4% increase over net revenues of $711,983 for the three month period ended December 31, 2008. The 5.4% increase as compared with 2008 is a result of a strong broad based growth across our operating market segments.   Sales of $694,440 of our closed-cell polyurethane foam products and $55,800 in equipment sales accounted for approximately 93% and 7%, respectively, of our net revenues for the three month period ended December 31, 2009. Sales of $663,983 of our closed-cell polyurethane foam products and $48,000 in equipment sales accounted for approximately 93% and 7%, respectively, of our net revenues for the three month period ended December 31, 2008.

The $694,440 of foam product revenues represents a 5% increase compared to $663,983 for the same period in 2008.  During the reporting period, we increased our number of product units sold to our original equipment manufacturer, retail chain and distributor market segments by 5% over the three month period ended December 31, 2008, despite a continuing weakness in U.S. consumer markets in 2009.

Also during the three month period ended December 31, 2009 we had $11,640 and $6,736 of returns of our products and trade discounts, respectively, compared to $4,104 and $4,886, respectively, for the same period in 2008.

Cost of revenues.  Our cost of revenues was $572,604 or approximately 76% of net revenues for the three month period ended December 31, 2009, compared to cost of revenues of $530,511 or approximately 74.5% of net revenues for the three month period ended December 31, 2008.

For the three month period ended December 31, 2009 our cost of revenues related to foam products was $528,471, or 76.1% of foam product revenues, compared to $484,985, or 73% of foam product revenues for the same three month period in 2008. Our cost of revenues related to foam products was affected by management’s decision to scrap over $19,000 of our inventory classified as obsolete. Overall, we believe that our cost of revenues related to foam products can continue to improve if our increased sales efforts generate additional product orders so that we can take advantage of manufacturing efficiencies.  We believe we currently have sufficient foam product manufacturing equipment and employees to accomplish a substantial increase in production without incurring a proportionately equivalent increase in labor costs.

During the three month period ended December 31, 2009 our cost of revenues related to equipment sales was $44,133, or approximately 79% of equipment sales. As indicated in the Overview and Recent Developments section above, in order to penetrate the tire fill market, we are supplying our customers with tire fill equipment effectively at a small cost. We anticipate that profits from this initiative will be derived from the sale of tire fill material to our customers.

Gross Profit.  For the three month period ended December 31, 2009 we had $177,636 of gross profit compared to $181,472 for the same period in 2008.  Gross profit for the three month period ended December 31, 2009 decreased by $3,836, or 2%, over same period in 2008 due primarily to our decision to scrap obsolete inventory detailed above. Our gross profit margin in future periods will be influenced by the percent of total revenues derived from foam product sales, equipment sales and licensee fees, respectively. Our profit margin on foam products is substantially higher than our profit margin on equipment. Our profit margin is potentially highest on license fees, if any, that have no associated cost revenues.

Selling, General, and Administrative Expenses.  For the three month period ended December 31, 2009 we had $547,861 of SG&A expenses, including the amortization of deferred compensation, compared to $929,096 for the same period in 2008.  We amortized $18,718 of deferred compensation for the three month period ended December 31, 2009 compared to $70,480 for same period in 2008.  We expect our quarterly SG&A expenses to decrease during the balance of the 2010 fiscal year as a result of cost reduction measures currently being implemented.

Research and Development Expenses.  For the three month period ended December 31, 2009 we had $31,713 of research and development expenses compared to $68,689 for the same period in 2008.  Our research and development expenses for the three month period ended December 31, 2009, decreased by $36,976, or 54%, as compared with the same period in 2008 due primarily to a decrease in outside testing services and a reduction in research and development tooling expenses during the period.  We expect research and development expenses to stay constant over the balance of the fiscal year ending June 30, 2010.

Consulting Expenses.  For the three month period ended December 31, 2009, we had no consulting

expenses compared to $132,359 in consulting expenses for the same period in 2008.  Our consulting expenses for the three month period ended December 31, 2009 decreased by $132,359, or 100% as compared with the same period in 2008 due to the termination in April 2009 of our consulting agreements with our former CEO, Richard Steinke and our former Chief Chemical Systems Formulator, Manuel Chacon. We expect no consulting expenses for the balance of the fiscal year.

Depreciation and Amortization Expenses.  For the three month period ended December 31, 2009 we had $62,069 of depreciation and amortization expenses compared to $64,791 for the same period in 2008.  Our depreciation and amortization expenses for the three month period ended December 31, 2009 decreased by $2,722, or 4%, compared to the same period in 2008 due to reductions for fully depreciated assets.

Net Loss.  For the three month period ended December 31, 2009 we had a net loss of $457,138 compared to a net loss of $994,117 for the same period in 2008.  Our net loss for the three month period ended December 31, 2009 decreased by $536,979 as compared with the same period in 2008, due primarily to the increase in product sales and cost reduction measures described above.

Six Month Period Ended December 31, 2009 Compared to December 31, 2008

Net revenues.   We had net revenues of $1,890,073 for the six month period ended December 31, 2009, a 20% increase over net revenues of $1,564,900 for the six month period ended December 31, 2008. Our net sales increase as compared with 2008 is a result of a strong broad based growth across our operating market segments. $1,709,073 in sales of our closed-cell polyurethane foam products and $181,000 in equipment sales accounted for approximately 90% and 10%, respectively, of our net revenues for the six month period ended December 31, 2009. $1,393,656 in sales of our closed-cell polyurethane foam products, $137,911 in equipment sales and $33,333 in license fees accounted for approximately 89%, 9% and 2%, respectively, of our net revenues for the six month period ended December 31, 2008.

The $1,709,073 of foam product revenues represents a 22% increase compared to $1,393,656 for the same period in 2008.  During the reporting period, we increased our number of product units sold to our original equipment manufacturer, retail chain and distributor customers by 20% over the six month period ended December 31, 2008, despite continuing weakness in U.S. consumer markets in 2009.

We had no revenues derived from licensing fees during the six months ended December 31, 2009, compared to $33,333 for the six month period ended December 31, 2008. The decrease in license fees is a result of reaching the end of the license fee arrangement with our Chinese OTR retread licensee. Any additional revenue we may derive from our Chinese OTR retread licensee will come from the sale of equipment and/or chemical systems.

Also during the six month period ended December 31, 2009 we had $13,822 and $11,510 of returns of our products and trade discounts, respectively, compared to $20,887 and $7,494, respectively, for the same period in 2008.

Cost of revenues.  Our cost of revenues of $1,341,236 for the six month period ended December 31, 2009, representing approximately 71% of net revenues, compared to cost of revenues of $1,103,137 for the six month period ended December 31, 2008, representing approximately 70% of net revenues. For the six month period ended December 31, 2009 our cost of revenues related to foam products was $1,192,824, or 70% of foam product revenues, compared to $970,239, or 69% of foam product revenues for the same six month period in 2008. During the six month period ended December 31, 2009 our cost of revenues related to equipment sales was $148,412, or approximately 82% of equipment sales, compared to $132,898, or approximately 96% of equipment sales in the prior year period. As indicated in the Overview and Recent Developments section above, in order to penetrate the tire fill market we are supplying our customers with tire fill equipment at a small margin. We anticipate that profits from this initiative will be derived from the sale of tire fill material to our customers.

Gross Profit.  For the six month period ended December 31, 2009 we had $548,837 of gross profit compared to $461,763 for the same period in 2008.  Gross profit for the six month period ended December 31, 2009 increased by $87,074, or 19%, over same period in 2008 due primarily to the increase in foam product and equipment sales offset by a decrease on license fees. Because our profit margin on licensee fees (with no associated cost of revenues) and foam products is substantially higher than our profit margin on equipment, our gross profit margin in future periods will be influenced by the percent of total revenues derived from foam product sales, equipment sales and licensee fees, respectively.

Selling, General, and Administrative Expenses.  For the six month period ended December 31, 2009 we had $1,095,992 of SG&A expenses, including the amortization of deferred compensation, compared to $1,959,789 for the same period in 2008.  We amortized $37,437 of deferred compensation for the six month period ended

December 31, 2009 compared to $140,959 for same period in 2008.  We expect our quarterly SG&A expenses to decrease during the balance of the 2010 fiscal year as a result of cost reduction measures currently being implemented.

Research and Development Expenses.  For the six month period ended December 31, 2009 we had $54,062 of research and development expenses compared to $176,312 for the same period in 2008.  Our research and development expenses for the six month period ended December 31, 2009, decreased by $122,250, or 69%, as compared with the same period in 2008 due primarily to a decrease in outside testing services and a reduction in research and development tooling expenses during the period.  We expect research and development expenses to stay constant over the balance of the fiscal year ending June 30, 2010.

Consulting Expenses.  For the six month period ended December 31, 2009, we had no consulting expenses compared to $268,857 in consulting expenses for the same period in 2008.  Our consulting expenses for the six month period ended December 31, 2009 decreased by $268,857, or 100% as compared with the same period in 2008 due to the termination in April 2009 of our consulting agreements with our former CEO, Richard Steinke and our former Chief Chemical Systems Formulator, Manuel Chacon.

Depreciation and Amortization Expenses.  For the six month period ended December 31, 2009 we had $123,788 of depreciation and amortization expenses compared to $134,656 for the same period in 2008.  Our depreciation and amortization expenses for the six month period ended December 31, 2009 decreased by $10,868, or 8%, compared to the same period in 2008, primarily due to reductions for fully depreciated assets.

Net Loss.  For the six month period ended December 31, 2009 we had a net loss of $737,194 compared to a net loss of $2,041,883 for the same period in 2008.  Our net loss for the six month period ended December 31, 2009 decreased by $1,304,689 as compared with the same period in 2008, due primarily to the increase in product sales and the decrease in SG&A expenses as a result of our cost cutting efforts.

Liquidity and Capital Resources

Our principal sources of liquidity consist of cash and cash equivalents and payments received from our customers.  We have no long-term liabilities, and we do not have any significant credit arrangements.  Historically, our expenses have exceeded our revenues, resulting in operating losses.  From time to time, we have obtained additional liquidity to fund our operations through the sale of shares of our common stock.  In assessing our liquidity, our management reviews and analyzes our current cash balances on-hand, short-term investments, accounts receivable, accounts payable, capital expenditure commitments and other obligations.

Cash Flows

The following table sets forth our cash flows for the six month periods ended December 31, 2009 and 2008.

		Six Months Ended December 31,
		2009							2008
Net cash used by operating activities		$	(536,054		)				$	(1,621,627	)
Net cash used in investing activities		(57,186			)				(38,916		)
Net cash provided by financing activities		657,499							320,562
Net increase (decrease) in cash and cash equivalents during period		$		64,259					$	(1,339,981	)

Net Cash Used By Operating Activities.  Our primary sources of operating cash during the six month period ended December 31, 2009 was proceeds from a loan, prior period finance activities and collected accounts receivable.  Our primary uses of operating cash are payments made to our vendors and employees. Net cash used by operating activities was $536,054 for the six months ended December 31, 2009 compared to $1,621,627 for the same period in 2008.  The decrease in cash used in operating activities is due to decreases in overall selling, general, and administrative expenditures for the six months ended December 31, 2009 compared to the same period in 2008.  Non-cash items include depreciation and amortization and stock based compensation. Our net loss was $737,194 for the six months ended December 31, 2009 compared to a net loss of $2,041,883 for the same period in 2008.  Net loss for the six month period ended December 31, 2009 included non-cash expenses of $37,437 for stock-based compensation related to employee stock options, $63,000 issued as bonus compensation and $55,000 for stock issued for services.  Net loss for the six month period ended December 31, 2008 included non-cash expenses of $140,959 for stock-based compensation related to employee stock options, $71,384 for the issuance of a stock option

for consulting services, $25,765 for stock issued/accrued for services.  

Net Cash Used In Investing Activities.  Net cash used by investing activities was $57,186 for the six month period ended December 31, 2009 and $38,916 for the same period in 2008.  Our primary uses of investing cash for the six month period ended December 31, 2009 were $9,660 related to patents and trademarks and $47,526 for property and equipment. Our primary uses of investing cash for the six month period ended December 31, 2008 were $21,077 deposits on patents and trademarks and $17,839 for property and equipment.

 

Net Cash Provided by Financing Activities.  During the six months ended December 31, 2009, we completed the private placement of our securities at a price of $0.21 per share. We sold an aggregate of 2,416,664 shares of our common stock and received net proceeds of $507,500 in a private placement.  We also received an aggregate loan of $150,000 under a credit agreement with a partnership.  The members of the partnership elected to immediately convert the funds loaned into stock per the credit agreement and, accordingly, we issued an aggregate of 714,285 shares of our common stock in full satisfaction of the loan.  During the six months ended December 31, 2008 financing activities provided net cash of $320,562 for the issuance of common stock for cash.

Contractual Obligations and Commitments

The following table summarizes our contractual cash obligations and other commercial commitments at December 31, 2009.

		Payments due by period
		Total			Less than 1 year					1 to 3 years			3 to 5 years			After 5 years
Facility lease (1)		$	90,000			$	90,000			$	—		$	—			$	—
Total contractual cash obligations		$	90,000			$	90,000			$	—		$	—		$		—

(1)  In November 2007, we negotiated an extension of the lease for our executive and manufacturing facilities located at 1501 Industrial Road, Boulder City, Nevada.  The property consists of a 49,200 square-foot building, which includes approximately 5,500 square-feet of office space, situated on approximately 4.15 acres.  In June 2009, we negotiated an adjustment to the extended lease for monthly base rent of $15,000. The lease agreement has a term of one year starting on June 15, 2009.

Cash Position, Outstanding Indebtedness and Future Capital Requirements

Our total indebtedness at December 31, 2009 was $519,732 and our total cash and cash equivalents were $92,893, none of which is restricted. Our total indebtedness at December 31, 2009 includes $290,423 in accounts payable, and $229,309 in accrued expenses and deferred revenues.  We have no long-term liabilities.

In an effort to increase revenues, we have recently expanded our product lines and begun the sale of polyurethane foam tire fill and solid polyurethane elastomer tires. We believe the revenues reported for the fiscal quarter ended December 31, 2009 are beginning to reflect our progress toward our sales goals, which progress we anticipate will become more apparent during the next three to six months. However, our ability to continue as a going concern is dependent upon our ability to obtain additional financing or capital sources, to meet our financing requirements, and ultimately to achieve profitable operations.

Although we believe that we will successfully implement our business plan to provide for additional revenues to offset operating costs, management cannot give any assurances that it will be able to do so or that we will ever operate profitably.  Our business plan assumes, among other things, that our revenues will increase from the sale of the new product lines, our raw materials expenses may increase, and our expenses from operations will decrease due to the cost reduction measures currently being implemented.   

Our financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have historically incurred significant losses which have resulted in a total retained deficit of $55,380,414 at December 31, 2009 which raises substantial doubt about our ability to continue as a going concern (See Note 3 to the attached financial statements). The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

As described above, we have taken certain steps to reduce our operating and financial requirements while expanding our revenues in an effort to enable us to continue as a going concern until such time that revenues are sufficient to cover expenses, including: (1) we implemented numerous cost reduction measures, including reduced officer and board compensation, over the last seven months of the 2009 fiscal year and the first half of our 2010 fiscal year; (2) we revised the selling prices for our products at the beginning of the fiscal year to adjust for raw material increases to our customers; (3) we re-focused our sales and marketing efforts on three product areas with products already in production, low duty cycle foam tires, tire fill and solid tires. We have expanded sales in all three areas and expect to continue to increase sales during the fiscal year.  We also hope to continue to reduce our overall selling, general and administrative expenses throughout the fiscal year. We expect the increase in revenues from our expanded sales activity and our continuing efforts to control expenses should reduce net loss in the near term and move us closer to profitability.

To supplement our cash needs during the 2010 fiscal year, on September 21, 2009, we completed a private placement of our common stock for aggregate proceeds of approximately $500,000.  We also, on October 12, 2009, received an aggregate loan of $150,000 from the members of the Clean Green Partnership per a credit agreement. We have analyzed our cash needs for fiscal 2010 and have concluded that our available cash, including the cash raised in the private placement, may not  be sufficient to meet our current minimum working capital, capital expenditure and other cash requirements for fiscal 2010, especially if our sales revenues do not meet our expectations. If necessary, we may seek to raise additional capital through the issuance of debt or equity securities. Our ability to obtain financing through the offer and sale of our securities is subject to market conditions and other factors beyond our control. We may also issue common stock in lieu of cash as compensation for certain employment, development, and other professional services. In any case, we will most likely need additional capital to fully implement our business plans.

Our ability to obtain further financing through the offer and sale of our securities is subject to market conditions and other factors beyond our control. We cannot assure you that we will be able to obtain financing on favorable terms or at all.  If our cash is insufficient to fund our business operations, our business operations could be adversely affected in the event we do not obtain additional financing and are unable to obtain such funding when needed.   Insufficient funds may require us to delay, scale back or eliminate expenses and or employees. If we cannot generate adequate sales of our products, or increase our revenues through other means, then we may be forced to cease operations.

We filed a Form 25 on January 26, 2010 with the Securities and Exchange Commission to delist our common stock from The Nasdaq Stock Market (“Nasdaq”).  We have been unable to meet minimum requirements of Nasdaq’s Equity Standard Listing Rule 5550(b) because we do not have a minimum of $2,500,000 in stockholders’ equity, $35,000,000 market value of listed securities, or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years.  Pursuant to the Form 25, our common stock is no longer traded on Nasdaq, effective February 4th, 2010.  We have found a market maker to make application on our behalf to have our common stock quoted on Nasdaq’s Over the Counter Bulletin Board (“OTCBB”) under the symbol “AMTY.OB,” effective February 4th, 2010. The delisting of our common stock from Nasdaq may make it more difficult for us to obtain equity financing if we need to do so.

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.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS 168, “The FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”), which establishes the FASB Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with US GAAP. SFAS 168 explicitly recognizes rules and interpretive releases of the SEC under federal securities laws as authoritative GAAP for SEC registrants. SFAS 168 was subsequently incorporated into ASC Topic 105, “Generally Accepted Accounting Principles” and was adopted by the Company during the current quarter. The adoption did not have a material impact on our financial position or results of operations but will impact our financial reporting by eliminating all references to pre-codification standards.  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to changes in prevailing market interest rates affecting the return on our investments but do not consider this interest rate market risk exposure to be material to our financial condition or results of operations.  We invest primarily in United States Treasury instruments with short-term (less than one year) maturities.  The carrying amount of these investments approximates fair value due to the short-term maturities.  Under our current policies, we do not use derivative financial instruments, derivative commodity instruments or other financial instruments to manage our exposure to changes in interest rates or commodity prices.

ITEM 4. CONTROLS AND PROCEDURES

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

As required by SEC Rule 13a-15(b), an evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, 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 management, including our principal executive officer and our principal financial officer, concluded that the design and operation of these disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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 Annual Report on Form 10-K for the year ended June 30, 2009.  In addition to the risk factors detailed in the above report, the following risk factors should be considered:

Shareholders and potential investors may experience more difficulty trading our stock since it is no longer listed but is now only quoted on Nasdaq’s Over the Counter Bulletin Board.

Effective February 4th, 2010, our common stock has been delisted from Nasdaq and is quoted on Nasdaq’s OTC Bulletin Board.  As a result, secondary trading of our shares may be subject to certain state imposed restrictions and the ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Further, our shares may be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule. Broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000 by an individual, or $300,000 together with his or her spouse), are subject to additional sales practice requirements.

 

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery,

prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.

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

On October 19, 2009, we received an aggregate loan of $150,000 from the members of the Clean Green Partnership per a credit agreement entered into on July 23, 2009.  The members elected to immediately convert the funds loaned into stock per the credit agreement.  Accordingly, on October 23, 2009, we issued an aggregate of 714,285 shares to the members of Clean Green in full satisfaction of the loan.  We believe the issuance of the securities described above were exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”) pursuant to Section 4(2) of the Act because the securities were issued in a transaction not involving a public offering. 

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

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

Our Annual Meeting of Stockholders was held in the Sunset Room at the Sunset Station Hotel and Casino, 1301 West Sunset Road, Henderson, Nevada 89014, on December 2, 2009, at 10:00 am, Pacific Time, to:

1. Elect five directors to serve until the 2010 Annual Meeting of Stockholders; and

2. Ratify the selection of HJ & Associates, LLC as the Company’s independent auditor for the Company’s fiscal year ending June 30, 2010.

The results of the voting were as follows:

A total of 20,037,788 shares were represented at the meeting in person or by proxy, or approximately 66% of the total 30,291,778 shares eligible to vote.

ITEM 5.  OTHER INFORMATION

We filed a Form 25 on January 26, 2010 with the Securities and Exchange Commission to delist our common stock from The Nasdaq Stock Market (“Nasdaq”).  We have been unable to meet minimum requirements of Nasdaq’s Equity Standard Listing Rule 5550(b) because we do not have a minimum of $2,500,000 in stockholders’ equity, $35,000,000 market value of listed securities, or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years.  Pursuant to the Form 25, our common stock is no longer traded on Nasdaq, effective February 4th, 2010.  We have found a market maker to make application on our behalf to have our common stock quoted on Nasdaq’s Over the Counter Bulletin Board (“OTCBB”) under the symbol “AMTY.OB,” effective February 4th, 2010.

On February 11, 2010, the board of directors appointed Michael Kapral, our CEO and President, as a new member of the board of directors, effective immediately.  There is no arrangement or understanding between Mr. Kapral and any other person pursuant to which he was selected as a director. Mr. Kapral receives compensation under his existing employment agreement for his service as CEO and President but will not receive any additional

compensation for service as a director. Mr. Kapral has not been appointed to serve on any committee of the board at this time. Mr. Kapral was appointed Chief Executive Officer and President on April 24, 2009.  Previously he served as Vice President of Marketing since April 1, 2008.  Mr. Kapral brings to Amerityre a broad range of capabilities acquired during an extensive 25 year career in the tire and tire products industry.  From 2001 to 2008, he was the General Manager of the Tire Division at Carpenter Company in Richmond, Virginia.  Prior to that, from 1995 to 2001, he was Territory Manager for Bridgestone Firestone Tire. Mr. Kapral’s experience includes tire fill material manufacture and sales, retread manufacturing operations and consumer retail tire sales in tire product areas ranging from medium truck tires to off-the-road tires.  He began his career working for his father in their retread shop, later moving into retail sales in their four store tire business located in Southern New York State. 

ITEM 6.  EXHIBITS

Exhibit 31.01 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

Exhibit 31.02 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

Exhibit 32.01 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

Exhibit 32.02 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

SIGNATURES

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

Dated: February 15, 2010

AMERITYRE CORPORATION

/S/Michael Kapral

Michael Kapral

Chief Executive Officer

/S/Anders A. Suarez

Anders A. Suarez

Chief Financial Officer and

Principal Accounting Officer