<PAGE> 1
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-KSB/A

(Mark One)
  [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

     For the fiscal year ended       June 30, 2001
                                     -------------
  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from ________ to __________

            Commission File Number          33-94318-C
                                            ----------
                            AMERITYRE CORPORATION
                    --------------------------
        (Exact name of registrant as specified in charter)

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

705 Yucca Street, Boulder City, Nevada                     89005
-------------------------------------------              ----------
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number, including area code (702)  293-1930
                                               ---------------
Securities registered pursuant to section 12(b) of the Act:

Title of each class       Name of each exchange on which registered
        None                                  N/A
------------------        -----------------------------------------

Securities registered pursuant to section 12(g) of the Act:
                                   None
                             ---------------
                             (Title of class)

  Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 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. (1) Yes [X]
No [ ]  (2)  Yes [X]  No  [ ]

  Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

  State issuer's revenues for its most recent fiscal year:  $116,336
                                                            --------

<PAGE> 2

  State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days:

  Based on the average of the bid and asked prices of the common stock at
September 19, 2001, of $2.85 per share, the market value of shares held by
nonaffiliates (10,305,690 shares) would be approximately $29,371,217.

  As of September 19, 2001, the Registrant had 13,607,136 shares of common
stock issued and outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated:  (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933:  NONE


<PAGE>
<PAGE> 3
                                    PART I
                       ITEM 1. DESCRIPTION OF BUSINESS

Business in General
-------------------
Amerityre Corporation (formerly American Tire Corporation), a Nevada
corporation (the "Company"), was organized on January 30, 1995, to take
advantage of existing proprietary and nonproprietary technology available for
the manufacturing of flat-free specialty tires. The Company is considered a
"development stage" company.

Since the Company's inception, the Company has developed additional
proprietary technology relating to "flat free" tires and tire-wheel assemblies
so that the Company has completed the fundamental development of the process
to manufacture flat free bicycle and lawn and garden tires (the "Products").

The Company believes that its technology allows it to produce Products that
offer the same safety and ride as the traditional pneumatic tire, at
competitive prices, without the associated problems resulting from a flat
tire.

"Flat-Free" Technology
----------------------
The Company's Products produced from its flat-free tire technology differ from
pneumatic tires in that pneumatic tires are made from rubber and require an
inner tube which is inflated with air. The Company's Products could be
considered "non-pneumatic" in that they do not require inflation, however,
they are multi-density in nature and consist of a series of layers of
specially formulated urethanes and a closed foam construction to simulate the
compliance of a pneumatic tire.  The closed foam contains millions of closed
cells containing air. Therefore, the Company's Products are best identified as
"flat-free" in that they have no inner tube and do not require inflation, but
rely on the infrastructure to maintain the tires' stability. The flat-free
tire is mounted on the wheel rim in much the same way a pneumatic tire is
mounted, with the assistance of a tire lever. Apart from cleaning, the
Company's Products are maintenance free and eliminate tedious puncture repair
or the need for air.  The Company's Products are designed  for use by "On/Off"
road and "Highway" bicycles, lawn and garden equipment and other specialty
equipment.

Through June 30, 2001, the Company's primary marketing strategy has been to
introduce the flat-free tires through sales to OEMs and existing tire
distributors. Although the Company is investigating other markets, the Company
has targeted two main segments of the tire market:

  (1)  Original Equipment Manufacturers.  By selling to OEMs, the Company
believes it will be able to develop product identification and consumer demand
by emphasizing "Made in the USA" and the "flat-free"  and "maintenance-free"
characteristics of the tires while relying on the efforts of OEMs in marketing
their products with the Company's tires.

  (2)  Tire Distributors and Dealers.  By selling to tire distributors, the
Company believes it will be able to take advantage of existing distribution
channels for moving its tires into the aftermarket, while emphasizing the
uniqueness of the flat-free and maintenance free characteristics of the tires
versus traditional pneumatic tires. The Company is establishing a dealer
network for its bicycle and lawn and garden tires throughout the United
States. Dealer locations can be accessed through the Company's internet
website at at www.amerityre.com.

<PAGE> 4

  (3)  Direct Marketing. Customers may purchase the Company's Products
directly from the Company by placing orders via the Company's internet website
at www.amerityre.com. In addition to the Company's bicycle and lawn and garden
tires, the Company also offers a limited number of bicycles under the
tradename "Lazer[TM]".  The Lazer[TM] bicycles were mounted with the Company's
flat-free tires.  In addition, tire-wheel assemblies are also offered.

Competition
-----------
Currently, the Company knows of three tire manufacturers that utilize a liquid
phase technology manufacturing process to produce non-pneumatic tires from a
low density polyurethane foam (Green Tire, Norwich, UK; Woo Tire, Waihai,
China; and Krypton-India, Calcutta, India) and, to the best of the Company's
knowledge, only a limited numbers of their tires have been marketed in the
United States. In addition to manufacturers of low density polyurethane foam
tires, the Company will be competing directly with firms that manufacture and
market pneumatic bicycle tires and tubes made from rubber.  The Company's
technology differs from existing nonpneumatic tire technology in (1) the
formulation of the polyurethane; (2) the manner in which the polyurethane is
distributed throughout the mold; and (3) the use of a simple mechanical
locking system that allows the tire to stay secure on the wheel. The Company
estimates that over 98% of all domestic bicycle tire sales are pneumatic
tires.  The bicycle tire industry is highly competitive and several of the
Company's competitors have financial resources which substantially exceed
those of the Company.  In addition, many competitors are large companies
(i.e., Michelin [France], Kenda [Japan], and Chengshin Rubber [China]) that
have established name recognition of their products, have established
distribution networks for their products, and have developed consumer loyalty
to such products.  Principal factors in marketing the Company's tires will be
that they are domestically produced with "flat-free" and "maintenance free"
characteristics and may give the Company a competitive advantage against
pneumatic tires produced by foreign manufacturers that are subject to puncture
and loss of air.

Manufacturing, Supplies, and Quality Control
--------------------------------------------
The Company manufactures its Products utilizing single and/or multiple head,
centrifugal molding machines.  These machines centrifugally mold Products by
pouring a predetermined amount of polyurethane into a mold, which is then
spread out in the mold through centrifugal force.  The molding process occurs
when the liquid polyurethane formula (made up of isocyanide and polyol) is
combined with a catalyst. This combination causes a chemical reaction that
results in the cross linking of the chemicals, which thereafter become solid.
The mold then moves to the next station where the tire is removed and the
process is repeated. The Company has manufacturing equipment that, based on
manufacturer's specifications, should permit the Company to produce
approximately 1,500,000 tires annually, per 8 hour shift. The Company
estimates that it could produce about 8 to 10 million tires per year without
additional leased space. At that level of production, the Company would
require approximately 150 employees as well as additional equipment.  The
Company trains its employees in the use of its specialized manufacturing
equipment utilized in the manufacturing process. The Company utilizes multiple
suppliers to purchase polyurethane and believes that it will be able to obtain
sufficient quantities of polyurethane and other chemicals without significant
problems or delays.




<PAGE> 5

All Products produced by the Company are inspected following the manufacturing
process and prior to shipment to ensure quality.  Products considered by the
Company's quality control personnel to be defective could be ground into
pellets, which can be melted and reused in the Company's manufacturing process
to make new products and reduce waste of raw materials.

Patents
-------
The Company's technology is proprietary and it either owns the technology
directly or has licensed it through third parties.  Set forth in the schedule
below are the patents that have either been issued or for which a patent
application is pending with respect to the Company's technology.

Description of Patent                  U.S. Patent Number         Issued Date
---------------------                  ------------------         -----------
Method For Making Polyurethane Tires
 with an Outer Skin                        4,855,096              8/08/1989
Apparatus for Making Foam Products         4,943,223              7/24/1990
Method for Making Tires and the Like       6,164,397             12/26/2000

Description of Patent Pending          Application Number
-----------------------------          ------------------
Non-Pnuematic Tire and Rim Combination      Pending
Air No Air Elastomeric Tire                 Pending

Further Research and Development
--------------------------------
The Company did not make any significant expenditures for new research and
development during the recently completed fiscal year. The Company does not
anticipate that its joint development agreement with The Goodyear Tire and
Rubber Company or any other existing development projects will require the
Company to commit any substantial funds for new research and development
during the fiscal year ended June 30, 2002.

Trademarks
----------
The Company utilizes various trademarks in association with the marketing of
its Products, including its logo design in conjunction with the name
"American[TM]", and the names "Lazer[TM]", "Amerityre[TM]" "AirRiders(TM)" and
"Urathon[TM]".

Regulation and Environmental Compliance
---------------------------------------
The Company knows of no particular federal or state regulations applicable to
its manufacturing processes.  The Company is subject to various local, state,
and federal laws and regulations including, without limitation, regulations
promulgated by federal and state environmental and health agencies, the
federal Occupational Safety and Health Administration, and laws pertaining to
hiring, treatment, safety, and discharge of employees.  The Company's
manufacturing operations must also meet federal, state, and local regulatory
standards in the areas of labor, safety, and health. The Company believes that
it will be able to operate in compliance with such regulations, including laws
related to the handling and use of environmentally hazardous materials.


<PAGE>
<PAGE> 6

Employees
---------
As of June 30, 2001, the Company had 11 full-time employees, including 5
administrative and 6 hourly employees. None of the Company's employees are
represented by a labor union.  The Company believes that it will be able to
hire a sufficient quantity of qualified laborers in the local area to meet the
Company's employment needs.  The Company's manufacturing process does not
require special training, other than orientation to the Company's production
techniques and specific equipment.

                      ITEM 2. DESCRIPTION OF PROPERTIES
Offices
-------
In February 2000, the Company moved its manufacturing operations to Las Vegas,
Nevada, where it now leases approximately 23,500 net rentable sq. ft. The term
of the lease on the facility is for 5 years at a base monthly rent of $0.25
per sq. ft. for the first 12 months, subject to annual increase based on
either (i) the increase in the US Department of Labor, Bureau of Labor
Statistics, U.S. All Cities Average, Consumer Price Index for Urban Wage
Earners and Clerical Workers or (ii) minimum of 3.5% Cost of Living Increase
annually not to exceed 4% over the term of the lease, and other pass through
charges. Management of the Company believes that the new facility will be
sufficient to handle projected production needs for the next five years.

The Company maintains an executive office suite consisting of approximately
4,000 square feet located at 705 Yucca Street, Boulder City, Nevada. The
facility is leased from a third-party. The Company issued the landlord 22,500
shares of the Company's common stock as payment for the lease for the period
from April 1, 2001 through March 31, 2002. The shares issued as consideration
for the lease were valued at $45,000, which has been treated as prepaid rent
and amortized over the term of the lease. The lease may be terminated at any
time by either party by giving prior notice of not less than 30 days. It is
the opinion of management that the Company maintains adequate insurance
coverage for loss or damage to its facility under its existing insurance
policy.

In September 2001, the Company sold the vacated 26,000 sq. ft. facility and
4.15 acres of real property at 446 West Lake Street, Ravenna, Ohio.

                            ITEM 3. LEGAL PROCEEDINGS

In April 2000 the Company filed an action in the United States District Court,
District of Nevada, Case No. CV-S 00-0540-DWH-LRL, against Roger A. Fleming
("Fleming"), a former officer, director and current shareholder. This action
is a breach of employment contract case that includes additional claims
against Fleming for breach of fiduciary duty, breach of covenant of good faith
and fair dealing, intentional interference with business relations and
prospective economic advantage, defamation, intentional misrepresentation and
detrimental reliance and for monies due on a promissory note. The cause of
action was moved to the United States District Court for the Northern District
of Ohio, Eastern Division, pursuant to a motion by the defendant. As of the
date of this filing the Company has negotiated proposed terms for a settlement
with Mr. Fleming's legal counsel, however, a definitive settlement agreement
has not yet been signed.

<PAGE>
<PAGE> 7

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

No matters were submitted to a vote of shareholders of the Company during the
fourth quarter of the fiscal year ended June 30, 2001.

                                  PART II
     ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The table below sets forth, for the respective periods indicated, the prices
for the Company's common stock in the over-the-counter market as reported by
the NASD's OTC Bulletin Board.  The bid prices represent inter-dealer
quotations, without adjustments for retail mark-ups, mark-downs or commissions
and may not necessarily represent actual transactions.

Fiscal Year Ended June 30, 1999               High Bid       Low Bid
-------------------------------               --------       -------
First Quarter                                  $3.375        $1.00
Second Quarter                                 $1.5938       $0.75
Third Quarter                                  $2.9375       $1.0312
Fourth Quarter                                 $1.9375       $0.875

Fiscal Year Ended June 30, 2000
-------------------------------
First Quarter                                  $1.125        $1.0625
Second Quarter                                 $0.75         $1.0625
Third Quarter                                  $1.9062       $3.8125
Fourth Quarter                                 $2.0625       $2.8125

Fiscal Year Ended June 30, 2001
-------------------------------
First Quarter                                  $1.125        $1.0625
Second Quarter                                 $4.0625       $1.8125
Third Quarter                                  $5.875        $2.6875
Fourth Quarter                                 $5.05         $2.65

At  September 19, 2001, the Company's Common Stock was quoted on the OTC
Bulletin Board at a bid and asked price of $2.80 and $2.90, respectively.
Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At September 19, 2001, the Company had approximately 541
shareholders of record based on information provided by the Company's transfer
agent.

<PAGE>
<PAGE> 8

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements. Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of the Company or its management or Board of Directors; (c) statements of
future economic performance; (d) statements of assumptions underlying other
statements and statements about the Company and its business relating to the
future; and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.

Results of Operations
---------------------
Year ended June 30, 2001 compared to year ended June 30, 2000
-------------------------------------------------------------
During its operating history the Company has had limited revenues from the
sale of its Products. Total revenues for the year ended June 30, 2001 were
$116,336 compared to $60,039 for the same period in 2000. Since inception on
January 30, 1995, the Company has had total sales of $259,331. Costs of sales
for the year ended June 30, 2001 were $126,572, or 108% of sales as compared
to $118,990, or 198% of sales for the year ended June 30, 2000.  Management of
the Company believes that the direct costs as a percent of sales will be
reduced to profitable levels once the volume of Product sales exceeds the
fixed costs of minimum Product production (i.e., labor costs). Management also
believes that it currently has sufficient employees to merit a substantial
increase in production without incurring a proportionately equivalent increase
in labor costs.

In August 2000, in an effort to increase sales of the Company's Products, the
Company entered into an exclusive worldwide sales and marketing agreement with
Focus Sales and Marketing LLC, a Newport Beach, California based sales and
marketing group headed by Alan F. Rypinski.  The Focus Group marketed the
Company's bicycle tires under the brand name  "AirRiders(TM)". Because no
significant sales were experienced by the Company under this agreement, the
agreement was terminated effective July 31, 2001. The Company knows of no
other predictable events or uncertainties that may be reasonably expected to
have a material impact on the net sales revenues or income from continuing
operations other than the lack of working capital.

Corporate Expense. For fiscal 2001, total operating expenses were $3,458,216,
consisting mainly of consulting expenses of $1,153,807, payroll and payroll
taxes of $755,208, depreciation and amortization of $175,383, and selling,
general and administrative expenses of $1,358,318, resulting in a loss from
operations of $3,468,452. For fiscal year 2000, total operating expenses were
$1,874,356, consisting mainly of consulting expenses of $325,324, payroll and
payroll taxes of $578,203, depreciation and amortization of $225,911, and
selling, general and administrative expenses of $729,418, resulting in a loss
from operations of $1,933,307. The increase in the operating expenses during
fiscal year 2001 can be attributed in large part to increases in (i)
consulting, advertising and marketing expenses associated with selling the
Company's Products, (ii) directors' expenses, and (iii) general office
expenses.


<PAGE>
<PAGE> 9

Interest Expense.  Interest expense for fiscal 2001 was $6,950, a reduction
from $10,562 in fiscal 2000.  The decrease in interest expense for fiscal year
2001 is directly attributed to the conversion to equity of convertible
promissory notes issued during previous periods.

Other Income (Expense). For fiscal year 2001, the Company had other income
consisting of interest income of $114,299 associated with stock subscription
receivables and temporary investment of cash not needed in the ordinary daily
business. These gains were offset by interest expense of $6,950 and a $5,125
loss on disposition of assets.

For fiscal 2000, the Company had other income of $45,641, which amount
represents the interest accrued on a stock subscription receivable from a
former affiliate of the Company and experienced a loss of $44,784, which
amount represents the impairment loss recorded on certain patents and patent
applications that were abandoned during the year.

The Company experienced a net loss of $3,366,228 for the year ended June 30,
2001, compared with a net loss of $1,897,712 for the year ended June 30, 2000.
The basic loss per share for fiscal 2001 was $0.28 as compared to $0.23 for
fiscal year 2000, based on the weighted average number of shares outstanding
of 12,106,491 and 8,413,121 for the respective periods.

Liquidity and Capital Resources
-------------------------------
During the fiscal year ended June 30, 2001, the Company financed operations
through the issuance of common stock for cash, prepayment of salaries, and
payment of professional services.

At June 30, 2001, the Company had current assets of $964,810 and current
liabilities of $355,709, for a working capital surplus of $609,101, a
significant change from the working capital deficit of $35,163 at June 30,
2000. The Company had cash and cash equivalents of $530,052 and net accounts
receivable of $13,678 at June 30, 2001 compared to cash and cash equivalents
of $22,483 and net accounts receivable of $16,069 at June 30, 2000.  Cash used
in operations for the fiscal year ended June 30, 2001 was $1,990,783, compared
to $1,389,897 for the fiscal year ended June 30, 2000, which have been funded
primarily by cash received from the sale of common stock and the issuance of
common stock for services and salary.  At June 30, 2001, the Company had net
property and equipment of $842,117, after deduction of $807,460 in accumulated
depreciation.  The Company's property and equipment consists mainly of
land,$59,000; building and improvements, $305,532; and equipment, $1,265,200.
Because at June 30, 2001, the Company has an accumulated deficit during the
development stage of $13,565,507, the report of the Company's auditor contains
a going concern modification as to the ability of the Company to continue.

During fiscal 2001, the Company continued to acquire working capital through
the issuance of additional shares of common stock for cash, services and
conversion of debt. The Company is aware of its ongoing cash requirements and
has implemented a cash flow plan that continues to include expenditures
associated with the promotion of markets for its Products. At June 30, 2001,
the Company had subscription receivables from affiliates to provide an
additional $1,458,307 in additional equity to the Company (Note 2 to the
Financial Statements), however, no assurance can be given that the Company
will be able to obtain any other commitments. The Company does not anticipate
expending any substantial sums for new research and development during the
fiscal year ended June 30, 2002.


<PAGE> 10

Impact of Inflation
-------------------
The Company does not anticipate that inflation will have a material impact on
its current or proposed operations.

Principal Customers
-------------------
During the most recent fiscal year ended June 30, 2001, the Company had no
individual customer that accounted for more than 10% of the Company's
revenues.

Seasonality
-----------
Management of the Company knows of no seasonal aspects relating to the nature
of the Company business operations that had a material effect on the financial
condition or results of operation of the Company.

                        ITEM 7.  FINANCIAL STATEMENTS

The financial statements of the Company are set forth immediately following
the signature page to this form 10-KSB.

          ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                        ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has had no disagreements with its certified public accountants
with respect to accounting practices or procedures or financial disclosure.
See ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

                                 PART III

    ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
        PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth the name, age, and position of each executive
officer and director that has served during the fiscal year ended June 30,
2001 and the term of office of each director of the Company.

   Name            Age   Position                   Director or Officer Since
   ----            ---   --------                   -------------------------
Richard A. Steinke  59   Chairman, Director, CEO    January 1995  (1)
James G. Moore, Jr. 53   COO and VP Operations      August 1999
David P. Martin     59   VP Sales and Marketing     November 1999
David K. Griffiths  64   Secretary/Treasurer        February 1995
Louis M. Haynie     74   Director                   July 1997
Henry D. Moyle      72   Director                   March 1999
William K. Watkins  78   Director                   March 1999
James L. Sanderson  47   Director                   September 1999 (2)
Alan F. Rypinski    62   Director                   October 2000
Gene Stipe          74   Director                   November 2000

---------------------
(1)  Mr. Steinke became President and CEO in November 1999.
(2)  Mr. Sanderson did not stand for reelection at the Company's annual
meeting of shareholders in December 2000.


<PAGE>
<PAGE> 11

The term of office of each director is one year and until his successor is
elected and qualified at the Company's annual meeting, subject to removal by
the Shareholders.  The term of office for each Officer is one year and until a
successor is elected at the annual meeting of the Board of Directors and is
qualified, subject to removal by the Board of Directors.  The Company will
reimburse Directors for their expenses associated with attending Directors'
meetings. See Item 10. EXECUTIVE COMPENSATION, Compensation of Directors.

Biographical Information
------------------------
Set forth below is certain biographical information for each of the Company's
Officers and Directors and other key personnel at June 30, 2001.

Richard A. Steinke is a founder of the Company and currently serves as its,
President, Chairman and Chief Executive Officer. Mr. Steinke is also currently
the Chairman of the board of directors of Lew Corporation, a composite
material designing company located in Las Vegas, Nevada. From January 1992 to
December 1994, Mr. Steinke served as Chairman and C.E.O. of Alanco
Environmental Resources, Inc., a manufacturer of environmental/pollution
control equipment, Salt Lake City, Utah.  From June 1985 to December 1991, he
was the Chairman and C.E.O. of UTI Chemicals, Inc.,  a developer and
manufacturer of urethane chemicals, El Toro, California.  Mr. Steinke received
a B.A. in Political Science and Economics from the University of Arizona,
Tucson, Arizona, in 1967.

James G. Moore, Jr. joined the Company in August 1997 and was employed as the
Company's manager of mold design and processing.  In August 1999, Mr. Moore
was named Chief Operating Officer and Vice-President of Operations. Prior to
his employment with the Company, Mr. Moore worked at Goodyear Tire & Rubber
Company, Akron, Ohio, where he had over 25 years of experience as a master
tire carver, which included five years at the Goodyear apprentice school for
tire tread pattern carving and mold carving.  Mr. Moore also took multiple
engineering courses while enrolled in the civil engineering school at the
University of Akron, Akron, Ohio.

David P. Martin became the Company's Vice President of Sales and Marketing in
November 1999.  Prior to joining the Company, Mr. Martin was the General
Manager of Rocky Mountain Water Proofing, Salt Lake City, Utah, from November
1994 to November 1999. Mr. Martin spent 14 years with Paine Weber, Thomson
McKinnon and Prudential Securities as a registered representative.  Mr. Martin
has substantial sales experience including positions with Eastman-Kodak, GAF
Corporation, and Reproduction Systems, Inc.

David K. Griffiths has been the Company's Treasurer and principal accounting
officer since February 1995. In December 2000, Mr. Griffiths was elected by
the board of directors to serve also as the Company's Secretary. From 1960 to
1995, Mr. Griffiths was self-employed as an accountant/consultant for various
small businesses.  Mr. Griffiths offers the Company 38 years experience in
accounting and accounting related systems.  Mr. Griffiths received a B.S. in
Accounting from Arizona State University, Tempe, Arizona in 1959.

Louis M. Haynie was appointed to the Company's board of directors in July
1997. Mr. Haynie's  past board services include, Research Medical, Inc., Salt
Lake City, Utah, the University of Utah Regents Advisory Board, Redwood Land
Co., Salt Lake City, Utah, and MIS Corporation, Franklin, Tennessee.  Mr.
Haynie has a law degree from the University of Utah and has been in the
private practice of law since 1951.


<PAGE> 12

Henry D. Moyle was appointed to the Company's board of directors in March
1999.  Since 1992, Mr. Moyle has been president and C.E.O. of Silver Lake
Company, and since 1989 has been president and C.E.O. of Brighton Properties,
Inc.  From 1970 to 1983, Mr. Moyle was president and C.E.O. of Research
Industries Corporation.  Mr. Moyle received a B.A. from Stanford in 1957, and
a J.D. degree from the University of Utah in 1959.  Mr. Moyle is the owner of
Sunset Canyon Ranch, raising cattle and racehorses, and serves on the board of
directors of Silver Lake Company, Brighton Properties, Inc., and the Sunset
Medical Corporation.

William K. Watkins was appointed to the Company's board of directors in March
1999. Mr. Watkins is currently C.E.O., president and a director of Lew
Corporation, Las Vegas, Nevada. Since September 1980, Mr. Watkins has been
involved in researching, investing and developing various business ventures
throughout the United States.  From November 1954 through December 1961, Mr.
Watkins was vice president and general manager of Market Motors Ford, Inc.,
Akron, Ohio.  From January 1962 through August 1967, Mr. Watkins was president
and CEO of multiple car dealerships including Costa Mesa Chrysler Plymouth,
Inc., Costa Mesa, California.  From February 1968 to August 1980, Mr. Watkins
was president and CEO of Bill Watkins Ford, Scottsdale, Arizona.

Alan F. Rypinski is co-founder and chairman of Focus Sales & Marketing, LLC.
His most notable accomplishment is ArmorAll Protectant, launching an obscure
chemical product in 1971 from nothing to a $150 million international brand.
After selling ArmorAll to McKesson Corporation in 1979, Mr. Rypinski served as
President, Chairman, and Chairman Emeritus through December 1996.

Gene Stipe has served in the Oklahoma State Senate from 1956 until present.
He also served in the Oklahoma State House of Representatives prior to his
service in the Senate.  He currently serves as Chairman of the Senate
Transportation Committee.  Mr. Stipe is also Chairman of HCFS, Inc., a
healthcare outsource company with offices in Texas and Oklahoma.  His other
ventures have included the newspaper business, at one time owning over 20
newspapers in Oklahoma, Arkansas, and Texas; ownership of five radio stations;
the convenience store and full service grocery store business, with 32 stores
in Oklahoma and Texas; a title insurance company and abstract offices;
ranching; and the oil and gas business, including ownership and a Board
position with Rockwell Drilling, and participation and ownership in many
drilling ventures.  Mr. Stipe has a law degree from the University of Oklahoma
Law School and has been in private practice since 1949.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
-------------------------------------------------
The Company is not subject to the requirements of Section 16(a) of the
Exchange Act.

<PAGE>
<PAGE> 13
                     ITEM 10.  EXECUTIVE COMPENSATION

The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's chief executive officer and each of its other
executive officers that received compensation in excess of $100,000 during
such period (as determined at June 30, 2001, the end of the Company's last
completed fiscal year):

<TABLE>
<CAPTION>                          Summary Compensation Table
                                                         Long Term Compensation
                                                         ----------------------
                     Annual Compensation                 Awards       Payouts
                                           Other        Restricted
Name and                                   Annual        Stock     Options LTIP     All other
Principal Position Year Salary    Bonus($) Compensation   Awards   /SARs   Payout  Compensation
------------------ ---- ------    -------- ------------   ------   ------- ------  ------------
<S>              <C>     <C>      <C>      <C>          <C>      <C>     <C>     <C>
Richard A. Steinke  2001 $346,875    -0-      -0-         -0-      -0-     -0-       -0-
CEO, Pres. and      2000 $210,000    -0-      -0-         -0-      -0-     -0-       -0-
Chairman            1999  120,000    -0-      -0-         -0-      -0-     -0-       -0-

John Hoffman        2000 $ 33,333    -0-      -0-         -0-      -0-     -0-       -0-
CEO, Pres.          1999 $    -0-    -0-      -0-         -0-      -0-     -0-       -0-
[From 3/99 to 10/99]

Roger A. Fleming    2000 $  9,000 $  -0-      -0-         -0-      -0-     -0-     $ -0-
Pres. and Director  1999 $240,000 $  9,569(1) -0-         -0-      -0-     -0-     $240,000(2)
[from 7/97 to 7/99]

</TABLE>
(1) Represents cash bonus accrued to the benefit of Mr. Fleming based on
annual sales revenue during the period.
(2) Represents loss on termination of employment agreement recorded in the
fiscal year ended June 30, 1999.

Employment Agreements and Benefits
----------------------------------
On expiration of Mr. Steinke's employment agreement the Company extended the
term to June 30, 2000 and issued Mr. Steinke 180,000 shares as compensation
for services. The share issuance was recorded at the average trading price of
the common stock of $1.00 on the date of issuance and resulted in prepaid
compensation of $180,000. Pursuant to a resolution of the Company's board of
directors, Mr. Steinke was issued 150,000 shares of restricted common stock in
lieu of cash compensation for service through December 31, 2000. The stock was
valued at $346,875. The value per share was the closing price of the Company's
common stock on the date of the board resolution. The Company also provides
group health and medical insurance, similar to that which will be made
available to all full time employees and reimburses Mr. Steinke for out-of-
pocket expenses incurred in connection with the Company's business.

In June 1998, the Company entered into an Employment Agreement with Roger A.
Fleming, its President and Chief Operating Officer.  Beginning June 1, 1998,
the Employment Agreement called for Mr. Fleming to be employed for a term of
36 months, with monthly compensation of $10,000, subject to increase at the
discretion of the Board of Directors. In addition, Mr. Fleming was issued
180,000 shares of the Company's common stock as prepaid employment
compensation through June 30, 2001, the end of the term of this employment
agreement. These shares were recorded at the average trading price of the
common stock of $2.00 on the date of issuance and resulted in prepaid
compensation of $360,000.  As additional incentive, the Company issued Mr.
Fleming 200,000 shares of its common stock as a bonus for signing his
employment agreement.

<PAGE> 14

The additional compensation was recorded at the average trading price of the
common stock of $2.00 on the date of issuance and resulted in bonus
compensation to Mr. Fleming of $400,000.  Further, Mr. Fleming was issued a
stock option to purchase 200,000 shares of the Company's common stock at an
exercise price of $2.00 per share, exercisable for a term of 5 years.  On June
30, 1998, Mr. Fleming issued the Company a promissory note in the amount of
$400,000 as consideration for exercising the option.  The promissory note
bears interest at 8.5% annually and is payable in 5 equal annual installments
beginning June 30, 1999, with payment in full not later than June 30, 2003.
Mr. Fleming's employment as President of the Company was terminated in July
1999 and the balance of his pre-paid employment compensation was expensed at
June 30, 1999. (See Item 3. Legal Proceedings)

As a condition to employment, all the Company's management and key personnel
are required to sign a nondisclosure and noncompetition agreement.  Under the
terms of the nondisclosure and noncompetition agreement, employees will not be
able to provide services or information deemed confidential by the Company to
any other company or person which directly or indirectly competes with the
Company in the tire industry or an industry which, at the time of the
employees' employment, the Company intended to enter.  There is no time
limitation on the nondisclosure aspect of the agreement.  The noncompetition
clause is for a period of two years and prevents a former employee or
consultant of the Company from acting as an employee, consultant or in any
other capacity for a competitor of the Company.  Additionally, all employees
will be required, as a condition of their employment, to enter into a
nondisclosure agreement related to any information or process deemed
confidential by the Company.

Compensation of Directors
-------------------------
Pursuant to a resolution of the Company's board of directors, 5 non-officer
members of the board of directors were compensated by issuance to each of
10,000 shares of the Company's restricted common stock in lieu of cash
compensation during the fiscal year ended June 30, 2001. Each director's stock
was valued at $34,125 for aggregate compensation of $170,625.  The value per
share was determined by averaging the closing price for the Company's common
stock for the 4 days previous to the board's approval. In addition, directors
have been reimbursed for reasonable business expenses incurred on behalf of
the Company.

Termination of Employment and Change of Control Arrangement
-----------------------------------------------------------
Unless otherwise disclosed below, as of June 30, 2001, the end of the
Company's most recent fiscal year, there are no compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any person named in Cash Compensation set out above which would in any
way result in payments to any such person because of his resignation,
retirement, or other termination of such person's employment with the Company
or any change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.


<PAGE>
<PAGE>  15

  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of September 19, 2001, the name and address
of any person who is known by the Company to be the beneficial owner of more
than 5% of any class of the Company's voting securities.

Security Ownership of Certain Beneficial Owners
-----------------------------------------------
Title
 of      Name and Address              Amount and Nature of     Percentage
Class    Beneficial Owner              Beneficial Ownership(1)   of Class
-----    ----------------              --------------------     ----------
Common   Richard A. Steinke            (2)      1,425,500            10.48
         705 Yucca Street
         Boulder City, NV  89005

Common   Alan F. Rypinksi              (7)      1,010,000             6.91
         3101 North Pacific Coast Hwy.
         Suite 100 A
         Newport Beach, CA  92663

The following table sets forth as of September 19, 2001, the name and position
of each of the Company's officers and directors, and the amount of any class
of the Company's voting securities known by the Company to be beneficially
owned by each.

Security Ownership of Management of the Company
-----------------------------------------------
Title
 of      Name and Position of          Amount and Nature of     Percentage
Class    Officer and/or Director       Beneficial Ownership(1)   of Class
-----    -----------------------       --------------------     ----------
Common   Richard A. Steinke, CEO/Pres.   (2)      1,425,500          10.48
Common   James Moore, Vice-President                 50,000            .37
Common   David P. Martin, Vice-President (3)        163,629           1.20
Common   David K. Griffiths, Sec./Treas.             57,817            .43
Common   Louis M. Haynie, Director       (4)        585,500           4.30
Common   Henry D. Moyle, Director        (5)        585,000           4.30
Common   William K. Watkins              (6)        332,500           2.44
Common   Alan F. Rypinksi                (7)      1,010,000           6.91
Common   Gene Stipe                      (8)        260,000           1.88

         Total Beneficial Ownership of
         All Officers and Directors as
         a Group (9 person)                       4,469,946          30.09

(1)  All shares owned directly are owned beneficially and of record and such
shareholder has sole voting, investment, and dispositive power, unless
otherwise noted.
(2) Includes 455,000 shares owned beneficially and of record by Gemini Funding
Services Profit Sharing Account, of which Richard A. Steinke is the principal
beneficiary and 800,000 shares owned beneficially and of record by S102
Irrevocable Trust, for which Richard A. Steinke is the trustee.
(3) Includes 6,000 shares owned beneficially and of record by Peggy Martin,
the spouse of David P. Martin, and of which Mr. Martin may be deemed to have
beneficial ownership.

                    [Footnotes continue on next page.]

<PAGE> 16

(4) Includes 2,000 shares owned beneficially and of record by Gae B. Haynie,
spouse of Louis M. Haynie, of which Mr. Haynie may be deemed to have
beneficial ownership.
(5) Includes 55,000 shares owned beneficially and of record by Vickie L.
Moyle, spouse of Henry B. Moyle, of which Mr. Moyle may be deemed to have
beneficial ownership.
(6) Includes 32,500 shares owned beneficially and of record by Dolores A.
Watkins Family Trust, of which William K. Watkins is a beneficiary.
(7) Includes options to acquire up to 500,000 shares at an exercise price of
$3.00 per share expiring July 31, 2004 and options to acquire an additional
500,000 shares at an exercise price of $3.00 per share expiring July 31, 2005,
both owned beneficially and of record by Focus Sales and Marketing, L.L.C. and
of which Mr. Rypinski is a controlling principal.
(8) Includes options to acquire up to 250,000 shares at an exercise price of
$3.00 per share, expiring April 17, 2003.


             ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Stock Subscriptions Receivables
-------------------------------
During the fiscal year ended June 30, 1998, Roger A. Fleming, the Company's
president utilized a promissory note in the principal amount of $400,000 to
exercise an option to purchase 200,000 shares of the Company's common stock at
an exercise price of $2.00 per share. The promissory note bears interest at
8.5% annually and is payable in 5 equal annual installments beginning June 30,
1999, with payment in full not later than June 30, 2003. See Item 3. Legal
Proceedings.

During the year ended June 30, 2000, the Company issued 1,000,000 shares of
common stock for various notes receivable totaling $750,000 to affiliates of
the Company. These notes bear interest at rates of 8.0% and 8.5% per annum and
are due in full on December 1, 2002. These notes are also being presented as a
reduction of stockholders equity. During the year ended June 30, 2000, $12,016
was received on these notes receivable bringing the total balance owed
(including the promissory note from Mr. Fleming) at June 30, 2000 to
$1,206,230.

Technology License Agreement
----------------------------
On October 29, 1999, the Company entered into an exclusive license agreement
with the Company's President and two unrelated parties to license certain
intellectual property rights known as "Apparatus for Making Foam Products" and
"Method for Making Polyurethane Tires with an Outer Skin" embodied in United
States Patent No.'s 4,943,223 and 4,855,096, respectively. The agreement
grants the Company an exclusive license to use, sell, license, or otherwise
exploit the technology worldwide in exchange for a royalty of $0.25 of the net
selling price for all of units produced utilizing the technology. The
agreement provides for certain minimum production/royalty requirements
following the first year in order to maintain the exclusive license.  The
licensors may terminate the agreement should the Company fail to pay any
required royalty when due or fail to meet the minimum production/royalty
requirements. Due to Mr. Steinke's relationship with the Company, the
agreement cannot be considered to have been negotiated at arm's length.

<PAGE>
<PAGE> 17

                 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

  (a)(1)FINANCIAL STATEMENTS.  The following financial statements are included
in this report:

Title of Document                                                         Page
-----------------                                                         ----
Independent Auditors' Report of HJ & Associates, LLC.....................  18
Balance Sheet as of June 30, 2001........................................  19
Statements of Operations for the years ended June 30, 2001
 and 2000 and from inception on January 30, 1995 through June 30, 2001...  21
Statements of Stockholders' Equity.......................................  23
Statements of Cash Flows for the years ended June 30, 2001 and 2000
 and from inception January 30, 1995 through June 30, 2001...............  30
Notes to Financial Statements............................................  32

 (a)(2)FINANCIAL STATEMENT SCHEDULES.  The following financial statement
schedules are included as part of this report:

     None.

 (a)(3)EXHIBITS.  The following exhibits are included as part of this report:

         SEC
Exhibit  Reference
Number   Number     Title of Document                             Location
-------  ---------  -----------------                             --------
None.

 (b) Reports on Form 8-K.

There were no reports on Form 8-K filed with the Commission during the quarter
ended June 30, 2001

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:

                                        AMERITYRE CORPORATION

Date: October 9, 2001                   By /S/Richard A. Steinke, Chairman of
                                        the Board, President and CEO
                                        [Principal Executive Officer]

Date: October 9, 2001                   By /S/David K. Griffiths, Secretary
                                        Treasurer [Principal Accounting
                                        Officer]

Date: October 11, 2001                  /S/Louis M. Haynie, Director
Date: October 11, 2001                  /S/William K. Watkins, Director
Date: October 11, 2001                  /S/Gene Stipe, Director

<PAGE>
<PAGE> 18

                  INDEPENDENT AUDITORS' REPORT



Board of Directors
Amerityre Corporation
(Formerly American Tire Corporation)
(A Development Stage Company)
Boulder City, Nevada

We have audited the accompanying balance sheet of Amerityre Corporation
(formerly American Tire Corporation) (a development stage company) as of June
30, 2001 and the related statements of operations, stockholders' equity and
cash flows for the years ended June 30, 2001 and 2000 and from inception on
January 30, 1995 through June 30, 2001.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Amerityre Corporation
(formerly American Tire Corporation) (a development stage company) as of June
30, 2001, and the results of its operations and its cash flows for the years
ended June 30, 2001 and 2000 and from inception on January 30, 1995 through
June 30, 2001, in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  As discussed in Note 9 to the financial
statements, the Company has incurred significant losses which have resulted in
an accumulated deficit, raising substantial doubt about its ability to
continue as a going concern.  Management's plans in regard to these matters
are also described in Note 9.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
September 24, 2001

<PAGE>
<PAGE>  19
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
                               Balance Sheet

                                  ASSETS

                                                  June 30,
                                                    2001
                                                ----------
CURRENT ASSETS

  Cash and cash equivalents (Note 1)          $    530,052
  Accounts receivable - net                         13,678
  Inventory (Note 1)                               400,920
  Prepaid expenses                                  20,160
                                                ----------
    Total Current Assets                           964,810
                                                ----------
PROPERTY AND EQUIPMENT (Note 1)

  Land                                              59,000
  Building and improvements                        305,532
  Equipment                                      1,265,200
  Furniture and fixtures                             7,692
  Automobiles                                       12,153
  Less - accumulated depreciation                 (807,460)
                                                ----------
    Total Property and Equipment                   842,117
                                                ----------
OTHER ASSETS

  Patents  - net (Note 1)                           41,940
  Deposits                                           7,180
                                                ----------
    Total Other Assets                              49,120
                                                ----------
    TOTAL ASSETS                              $  1,856,047
                                                ==========


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

<PAGE>
<PAGE>  20
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
                          Balance Sheet (Continued)


                                                  June 30,
                                                    2001
                                                ----------
CURRENT LIABILITIES

  Accounts payable                            $    225,872
  Accrued expenses                                  11,240
  Note payable - related party (Note 3)             77,000
  Interest payable - related party (Note 3)         16,597
  Stock subscription deposit (Note 6)               25,000
                                                ----------
    Total Current Liabilities                      355,709
                                                ----------
    Total Liabilities                              355,709
                                                ----------
COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY

  Preferred stock: 5,000,000 shares
   authorized of $0.001 par value,
   -0- shares issued and outstanding                     -
  Common stock: 25,000,000 shares authorized
   of $0.001 par value, 13,291,635
   shares issued and outstanding                    13,292
  Additional paid-in capital                    16,576,110
  Stock subscriptions receivable (Note 2)       (1,458,307)
  Prepaid expenses (Note 3)                        (65,250)
  Deficit accumulated during the
   development stage                           (13,565,507)
                                                ----------
    Total Stockholders' Equity                   1,500,338
                                                ----------
    TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY                                   $  1,856,047
                                                ==========


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

<PAGE>
<PAGE>  21
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
                         Statements of Operations
                                                                   From
                                                                Inception on
                                                                January 30,
                                         For the Years Ended    1995 Through
                                              June 30,            June 30,
                                            2001          2000      2001
                                         ---------      --------   ----------
NET SALES                               $  116,336     $  60,039  $   259,331

COST OF SALES                              126,572       118,990      392,037
                                         ---------      --------   ----------
GROSS MARGIN                               (10,236)      (58,951)    (132,706)
                                         ---------      --------   ----------
EXPENSES

  Consulting                             1,153,807       325,324    2,221,943
  Payroll and payroll taxes                755,208       578,203    3,906,175
  Depreciation and amortization            175,383       225,911      988,920
  Bad debt expense                          15,500        15,500       52,112
  Selling, general and administrative    1,358,318       729,418    3,636,300
                                         ---------     ---------    ---------
    Total Expenses                       3,458,216     1,874,356   10,805,450
                                         ---------     ---------    ---------
LOSS BEFORE OTHER INCOME (EXPENSE)      (3,468,452)   (1,933,307) (10,938,156)
                                         ---------     ---------    ---------
OTHER INCOME (EXPENSE)

  Other income                                   -             -        2,298
  Interest income                          114,299        45,641      229,991
  Interest expense                          (6,950)      (10,562)    (637,401)
  Impairment loss (Note 1)                       -             -   (1,694,111)
  Asset impairment loss                          -       (44,784)     (58,426)
  Loss on termination of employment
    agreement (Note 3)                           -             -     (240,000)
  Gain (loss) on disposition of assets      (5,125)       45,300       36,513
                                         ---------     ---------    ---------
    Total Other Income (Expense)           102,224        35,595   (2,361,136)
                                         ---------     ---------    ---------
NET LOSS BEFORE DISCONTINUED
  OPERATIONS                            (3,366,228)   (1,897,712) (13,299,292)
                                         ---------     ---------    ---------
DISCONTINUED OPERATIONS

  Loss from discontinued operations              -             -     (495,108)
  Gain from disposal of subsidiary
  (Note 1)                                       -             -      228,893
                                         ---------     ---------    ---------
    Net Discontinued Operations                  -             -     (266,215)
                                         ---------     ---------    ---------
NET LOSS                             $  (3,366,228)  $(1,897,712)$(13,565,507)
                                         =========     =========   ==========

The accompanying notes are an integral part of these financial statements.
<PAGE>  22
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
                   Statements of Operations (Continued)
                                                                    From
                                                                 Inception on
                                                                 January 30,
                                         For the Years Ended     1995 Through
                                              June 30,             June 30,
                                            2001       2000          2001
                                         ---------   -----------  ----------

BASIC LOSS PER SHARE

  Loss from operations                 $     (0.28)  $     (0.23)
  Discontinued operations                        -             -
                                        ----------    ----------
    Basic Loss Per Share               $     (0.28)  $     (0.23)
                                        ==========    ==========
WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                     12,106,491     8,413,121
                                        ==========    ==========


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



<PAGE>
<PAGE>  23
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
                    Statements of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription   Prepaid    Development
                            Shares       Amount     Capital      Income     Receivable    Expenses     Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>         <C>          <C>          <C>          <C>         <C>

BALANCE, January 30, 1995
 (Inception)                        - $         - $         -  $         -  $         -  $        -  $        -

Common stock issued for
 cash during February
 1995 at $0.001 per share   2,510,000       2,510           -            -            -           -           -

Common stock issued for
 services rendered in
 February 1995 at $0.10
 per share                    300,000         300      29,700            -            -           -           -

Common stock issued for
 services rendered during
 April 1995 at $1.00 per
 share                        100,000         100      99,900            -            -           -           -

Common stock issued for
 notes receivable valued
 at $1.00 per share           170,000         170     169,830            -     (170,000)          -           -

Repayment of stock
 subscriptions receivable
 with cash or services
 rendered                           -           -           -            -       76,100           -           -

Common stock issued for
 cash at $1.00 per share      720,000         720     719,280            -            -           -           -

Stock offering costs                -           -     (78,271)           -            -           -           -

Net loss for the period
 ended June 30, 1995                -           -           -            -            -           -    (248,630)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
Balance, June 30, 1995      3,800,000       3,800     940,439            -      (93,900)          -    (248,630)

Common stock issued for
 cash at $6.00 per share       40,642          41    243,811             -            -           -           -

Stock offering costs                -           -     (1,600)            -            -           -           -

Repayment of stock
 subscriptions receivable
 by providing services              -           -          -             -        8,900           -           -

Net loss for the year
 ended June 30, 1996                -           -          -             -            -           -    (596,090)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
Balance, June 30, 1996      3,840,642 $     3,841 $ 1,182,650  $         -  $   (85,000)$         - $  (844,720)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>  24
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
               Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription   Prepaid    Development
                            Shares       Amount     Capital      Income     Receivable    Expenses     Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>         <C>          <C>          <C>          <C>         <C>

Balance, June 30, 1996      3,840,642 $     3,841 $ 1,182,650  $         -  $   (85,000) $        - $  (844,720)

Cancellation of common
 stock                        (34,977)        (35)   (209,827)           -            -           -           -

Common stock issued for
 cash at $6.00 per share
 pursuant to public
 offering                     344,083         344   2,064,154            -            -           -           -

Stock offering costs             -           -       (307,509)           -            -           -           -

Common stock issued in lieu
 of debt at $6.00 per share
 during November 1996          27,000          27     161,973            -            -           -           -

Common stock issued for
 cash at $6.00 per share
 during January 1997          155,000         155     929,845            -            -           -           -

Common stock issued to
 acquire Urathon Limited
 at $7.75 per share           200,000         200   1,549,800            -            -           -           -

Common stock issued for
 services rendered at
 $6.125 per share during
 February 1997                 15,000          15     91,860             -            -           -           -

Common stock issued for
 services rendered at
 $7.99 per share during
 June 1997                     15,000          15    119,865             -            -           -           -

Repayment of stock
 subscriptions receivable
 by providing services              -           -          -             -       40,000           -           -

Interest accrual on stock
 subscription receivable            -           -          -             -       (5,000)          -           -

Currency translation
 adjustment                         -           -          -        2,984             -           -           -

Net loss for the year
 ended June 30, 1997                -           -          -            -             -           -  (1,409,672)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
Balance, June 30, 1997      4,561,748 $     4,562 $ 5,582,811  $     2,984  $   (50,000)$         - $(2,254,392)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>  25
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
              Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription   Prepaid    Development
                            Shares       Amount     Capital      Income     Receivable    Expenses     Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>         <C>          <C>          <C>          <C>         <C>

Balance, June 30, 1997      4,561,748 $     4,562 $ 5,582,811  $     2,984  $   (50,000) $        - $(2,254,392)

Exercise of options for
 common stock at $2.50
 per share                      5,500           5      13,745            -            -           -           -

Common stock repurchased
 at $0.18 per share(Note 3)(1,270,000)     (1,270)   (228,730)           -            -           -           -

Common stock issued in lieu
 of interest on promissory
 notes at approximately
 $3.24 per share              152,250         152     492,629            -            -           -           -

Common stock issued in lieu
 of notes payable at $1.00
 per share                    400,000         400     399,600            -            -           -           -

Common stock issued as
 prepaid salary under related
 party compensation contracts
 at $2.00 per share           305,000         305     609,695            -            -    (610,000)          -

Common stock issued for
 subscription receivable
 at $2.00 per share           200,000         200     399,800            -     (400,000)          -           -

Common stock issued for
 services at $2.00 per
 share                        264,752         265     529,239            -            -           -           -

Receipt of stock
 subscriptions                      -           -           -            -       50,000           -           -

Currency translation
 adjustment                         -           -           -          188            -           -           -

Amortization of prepaid
 compensation contracts             -           -           -            -            -      33,333           -

Net loss for the year
 ending June 30, 1998               -           -           -            -            -           -  (4,267,829)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
Balance, June 30, 1998      4,619,250 $     4,619 $ 7,798,789  $     3,172  $  (400,000)$  (576,667)$(6,522,221)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------

</TABLE>

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

<PAGE>
<PAGE>  26
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
               Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription    Prepaid   Development
                            Shares       Amount     Capital      Income     Receivable     Expenses    Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                      <C>         <C>         <C>          <C>          <C>          <C>         <C>

Balance, June 30, 1998      4,619,250 $     4,619 $ 7,798,789  $     3,172  $  (400,000) $ (576,667)$(6,522,221)

Common stock issued for
 cash at $0.50 per share      875,000         875     436,625            -            -           -           -

Common stock issued in lieu
 of interest on promissory
 note at approximately $0.93
 per share                      7,225           7       6,731            -            -           -           -

Common stock issued in lieu
 of notes payable at $1.00
 per share                  1,135,000       1,135   1,133,865            -            -           -           -

Common stock issued in lieu
 of notes payable at $0.50
 per share                     90,000          90      44,910            -            -           -           -

Common stock issued for
 services at $0.50 per
 share                         90,000          90      44,910            -            -           -           -

Additional interest recorded
 on subscription receivable         -           -           -            -      (34,000)          -           -

Currency translation
 adjustment                         -           -           -       (3,172)           -           -           -

Amortization of prepaid
 compensation contracts             -           -           -            -            -     306,667           -

Termination of employment
 contract (Note 3)                  -           -           -            -            -    (240,000)          -

Net loss for the year
 ending June 30, 1999               -           -           -            -            -           -  (1,779,346)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
Balance, June 30, 1999      6,816,475 $     6,816 $ 9,465,830  $         -  $  (434,000)$   (30,000)$(8,301,567)
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE> 27
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                       (A Development Stage Company)
               Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                      Deficit
                                                                                                     Accumulated
                                                 Additional     Other        Stock                  During the
                               Common Stock        Paid-in  Comprehensive Subscription   Prepaid    Development
                            Shares       Amount    Capital      Income     Receivable    Expenses     Stage
                            ---------  ---------  -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>        <C>          <C>          <C>          <C>         <C>
Balance, June 30, 1999      6,816,475 $    6,816 $ 9,465,830  $         -  $  (434,000)$   (30,000)$ (8,301,567)

Common stock issued for
 cash at $0.50 per share    2,548,125      2,548   1,271,514            -            -           -            -

Common stock issued for
 cash at $1.00 per share       28,000         28      27,972            -            -           -            -

Common stock issued for
 cash at $2.00 per share       65,000         65     129,935            -            -           -            -

Common stock issued for
 cash at $3.19 per share        2,037          2       6,498            -            -           -            -

Common stock issued for
 cash at $1.16 per share        5,592          6       6,494            -            -           -            -

Common stock issued for
 services at an average
 price of $0.87 per share     363,306        363     314,729            -            -           -            -

Common stock issued for
 subscription receivable
 at $0.75 per share         1,000,000      1,000     749,000            -     (750,000)          -            -

Common stock issued for
 assets at $1.00 per share     12,500         13      12,487            -            -           -            -

Common stock issued as
 prepaid expenses at
 $1.00 per share               22,000         22      21,978            -            -     (22,000)           -

Common stock issued as
 prepaid expenses at
 $2.00 per share              200,000        200     399,800            -            -    (400,000)           -

Common stock issued as
 prepaid expenses at
 $2.50 per share              100,000        100     249,900            -            -    (250,000)           -

Additional interest
 recorded on
 subscriptions receivable           -          -           -            -      (34,246)          -            -

Receipt of cash on
 subscriptions receivable           -          -           -            -       12,016           -            -

Amortization of prepaid
 expenses                           -          -           -            -            -     268,233            -

Net loss for the year ended
 June 30, 2000                      -          -           -            -            -           -   (1,897,712)
                           ----------  --------- -----------   ----------  -----------  ---------- ------------
Balance, June 30, 2000     11,163,035  $  11,163 $12,656,137   $        -  $(1,206,230) $ (433,767)$(10,199,279)
                           ----------  --------- -----------   ----------  -----------  ---------- ------------
</TABLE>

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

<PAGE> 28
                              AMERITYRE CORPORATION
                       (formerly American Tire Corporation)
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                    Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription   Prepaid   Development
                            Shares       Amount     Capital      Income     Receivable   Expenses      Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>         <C>         <C>          <C>          <C>        <C>
Balance at June 30, 2000   11,163,035 $    11,163 $12,656,137 $          - $(1,206,230) $ (433,767)$(10,199,279)

Common stock issued for
 services at $2.31 per share  150,000         150     346,725            -           -           -            -

Common stock issued for
 services at $3.41 per share   50,000          50     170,575            -           -           -            -

Common stock issued for
 services at $4.89   per share  2,000           2       9,785            -           -           -            -

Common stock issued for
 services at $3.87 per share    2,581           3       9,997            -           -           -            -

Common stock issued for
 services at $2.78 per share   10,000          10      27,790            -           -           -            -

Common stock issued for
 services at $2.80 per share    7,000           7      19,593            -           -           -            -

Common stock issued for note
 receivable (exercise of
 options) at $0.75 per share  200,000         200     149,800            -    (150,000)          -            -

Common stock issued for note
 receivable (exercise of
 options) at $2.00 per share   50,000          50      99,950            -    (100,000)          -            -

Common stock issued for pre-
 paid legal fees at $1.50
 per share                     10,000          10      14,990            -           -     (15,000)           -

Common stock issued for pre-
 paid legal fees at $2.00
 per share                     10,000          10      19,990            -           -     (20,000)           -

Common stock issued for pre-
 paid rent at $2.00 per share  22,500          23      44,977            -           -     (45,000)           -

Common stock issued for cash
 at $0.50 per share            40,000          40      19,960            -           -           -            -

Common stock issued for cash
 at $1.00 per share            15,000          15      14,985            -           -           -            -

Common stock issued for cash
 at $1.50 per share           920,889         921   1,380,413            -           -           -            -

Common stock issued for cash
 at $2.00 per share           626,130         626   1,251,637            -           -           -            -
                           ----------  ---------- ----------- ------------ -----------  ---------- ------------
Balance Forward            13,279,135  $   13,280 $16,237,304 $          - $(1,456,230) $ (513,767)$(10,199,279)
                           ----------  ---------- ----------- ------------ -----------  ---------- ------------
</TABLE>

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



<PAGE> 29
                              AMERITYRE CORPORATION
                       (formerly American Tire Corporation)
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                    Accumulated
                                                  Additional     Other        Stock                  During the
                               Common Stock         Paid-in  Comprehensive Subscription   Prepaid   Development
                            Shares       Amount     Capital      Income     Receivable   Expenses      Stage
                          ----------- ----------- -----------  -----------  ----------- ----------- -----------
<S>                       <C>         <C>         <C>         <C>          <C>          <C>        <C>
Balance Forward            13,279,135 $    13,280 $16,237,304 $          - $(1,456,230) $ (513,767)$(10,199,279)

Common stock issued in
 exercise of options at
 $2.00 per share               12,500          12      24,988            -           -           -            -

Additional interest recorded
 on subscriptions receivable        -           -           -            -     (39,847)          -            -

Receipt of cash on
 subscriptions receivable           -           -           -            -      37,770           -            -

Amortization of prepaid
 expenses                           -           -           -            -           -     448,517            -

Expenses incurred through
 issuance of stock options          -           -     313,818            -           -           -            -

Net loss for the year ended
 June 30, 2001                      -           -           -            -           -           -   (3,366,228)
                           ----------  ---------- ----------- ------------ -----------  ---------- ------------
Balance, June 30, 2001     13,291,635  $   13,292 $16,576,110 $          - $(1,458,307) $  (65,250)$(13,565,507)
                           ==========  ========== =========== ============ ===========  ========== ============
</TABLE>

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


<PAGE>
<PAGE> 30
                            AMERITYRE CORPORATION
                    (Formerly American Tire Corporation)
                        (A Development Stage Company)
                          Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                        From
                                                                                    Inception on
                                                                                    January 30,
                                                         For the Years Ended        1995 Through
                                                                June 30,              June 30,
                                                          2001         2000            2001
                                                   ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss                                            $(3,366,228)   $(1,897,712)   $(13,565,507)
  Adjustments to reconcile net loss to net cash (used)
   by operating activities:
    Depreciation and amortization                         175,383        225,911         988,920
    Bad debt expense                                       15,500         15,500          52,112
    (Gain) loss on disposition of assets                    5,125        (45,300)        (36,513)
    Asset impairment loss                                       -         44,784       1,752,537
    (Gain) on disposition of subsidiary                         -              -        (228,893)
    Loss on termination of employment agreement                 -              -         240,000
    Loss from discontinued operations                           -              -         495,108
    Additional expense on stock options granted           313,818              -         313,818
    Common stock issued for services                      584,687        315,092       1,815,038
    Services provided in lieu of cash payment on
     subscriptions receivable                                   -              -          75,000
    Common stock issued in lieu of interest                     -              -         499,519
    Interest on subscription receivable                   (39,847)       (34,246)       (108,093)
  Changes in assets and liabilities:
    (Increase) decrease in accounts receivable
      and accounts receivable - related                   (10,314)       (32,802)        (65,790)
    (Increase) decrease in inventory                      (33,840)      (326,767)       (400,920)
    (Increase) decrease in prepaid expenses               438,392        272,004       1,036,590
    (Increase) decrease in other assets                   (15,543)         3,976         (19,861)
    Increase (decrease) in accounts payable
      and accrued expenses                                (57,916)        69,663         106,905
                                                        ---------       --------       ---------
      Net Cash (Used) by Operating Activities          (1,990,783)    (1,389,897)     (7,050,030)
                                                        ---------       --------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES

  Cash paid for patents                                    (6,375)        (1,390)        (77,742)
  Sale of equipment                                         5,500         70,000          75,500
  Purchase of equipment                                  (192,140)      (136,099)     (1,769,989)
  Purchase of subsidiary                                        -              -        (400,000)
                                                        ---------       --------       ---------
      Net Cash (Used) by Investing Activities          $ (193,015)    $  (67,489)  $  (2,172,231)
                                                        =========       ========       =========
</TABLE>


The accompanying notes are an integral part of these financial statements.
<PAGE>  31
                           AMERITYRE CORPORATION
                    (Formerly American Tire Corporation)
                        (A Development Stage Company)
                    Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
                                                                                        From
                                                                                    Inception on
                                                                                    January 30,
                                                         For the Years Ended        1995 Through
                                                                June 30,              June 30,
                                                          2001           2000           2001
                                                     ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES

  Repurchase of common stock                           $        -     $        -      $ (439,862)
  Receipt of subscriptions receivable                      37,770         12,016          99,786
  Payment of stock offering costs                               -              -        (160,401)
  Proceeds from notes payable                                   -              -       2,298,838
  Increase (decrease) in stock subscription deposit       (40,000)        25,500          25,000
  Payments made on notes payable and line of credit             -              -        (429,838)
  Payments made to related parties                              -         (6,000)        (16,000)
  Common stock issued for cash                          2,693,597      1,445,062       8,374,790
                                                        ---------      ---------       ---------
    Net Cash Provided by Financing Activities           2,691,367      1,476,578       9,752,313
                                                        ---------      ---------       ---------
NET INCREASE (DECREASE) IN CASH                           507,569         19,192         530,052

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR                                         22,483          3,291               -
                                                        ---------      ---------       ---------
CASH AND CASH EQUIVALENTS AT
 END OF YEAR                                           $  530,052     $   22,483      $  530,052
                                                        =========      =========       =========
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

CASH PAID FOR:

  Interest                                             $        -     $    4,017      $   84,220
  Income taxes                                         $        -     $        -      $        -

NON-CASH FINANCING ACTIVITIES

  Common stock issued for services rendered            $  584,687     $  315,092      $1,815,038
  Common stock issued in lieu of debt and interest     $        -     $        -      $2,241,519
  Common stock issued for acquisition of subsidiary    $        -     $        -      $1,550,000
  Common stock issued as prepaid expenses              $   80,000     $  672,000      $1,362,000
  Common stock issued for equipment                    $        -     $   12,500      $   12,500
  Common stock issued for subscriptions receivable     $  250,000     $  750,000      $1,000,000

</TABLE>


The accompanying notes are an integral part of these financial statements.
<PAGE> 32
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  Organization

Amerityre Corporation (formerly American Tire Corporation)(ATC) (the
"Company") was incorporated under the laws of the State of Nevada on January
30, 1995.  The Company was organized to take advantage of existing proprietary
and non-proprietary technology available for the manufacturing of specialty
tires.  ATC has had limited operations since its organization and is a
"development stage" company.  The Company intends to engage in the
manufacturing, marketing, distribution, and sales of airless specialty tires
and tire-wheel assemblies and currently is manufacturing airless tires in
limited quantities at its manufacturing facility located in Las Vegas, Nevada.
During the year ended June 30, 2001, the name of the Company was changed to
Amerityre Corporation.

On February 28, 1997, ATC purchased Urathon Limited (UL) for $1,950,000 by
issuing 200,000 shares of its common stock plus $400,000 in cash in exchange
for 100% of the issued and outstanding stock of UL.  The common stock issued
was valued at its trading price of $7.75 per share.

Effective June 9, 1999, the Company sold its 100% ownership in UL, which
resulted in a gain on the disposition of the subsidiary of $228,893 that was
recorded in the accompanying statement of operations in the year ended June
30, 1999.

b.  Accounting Method

The Company's financial statements are prepared using the accrual method of
accounting.  The Company has elected a June 30 year end.

c.  Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.

d.  Basic Loss Per Share

The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period.
                                                     For the Years Ended
                                                          June 30,
                                                     2001            2000
                                                 ------------    ------------
Loss (numerator)                                $  (3,366,228)  $  (1,897,712)
Shares (denominator)                               12,106,491       8,413,121
Per share amount                                $       (0.28)  $       (0.23)

The Company's outstanding stock purchase warrants and options have been
excluded from the basic net loss per share calculation as they are
antidilutive.
<PAGE>
<PAGE>  33
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

e.  Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

f.  Income Taxes

At June 30, 2001, the Company had net operating loss carryforwards of
approximately $13,500,000 that may be offset against future taxable income
from the year 2001 through 2021. No tax benefit has been reported in the June
30, 2001 financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.

The income tax benefit differs from the amount computed at federal statutory
rates of approximately 38% as follows:
                                                     For the Years Ended
                                                          June 30,
                                                     2001            2000
                                                 ------------    ------------
Income tax benefit at statutory rate             $  1,279,000    $    721,000
Change in valuation allowance                      (1,279,000)       (721,000)
                                                 ------------    ------------
                                                 $          -    $          -
                                                 ============    ============

Deferred tax assets are comprised of the following:
                                                     For the Years Ended
                                                          June 30,
                                                     2001            2000
                                                 ------------    ------------
Income tax benefit at statutory rate             $  5,155,000    $  3,876,000
Valuation allowance                        (5,155,000)     (3,876,000)
                                                 ------------    ------------
                                                 $          -    $          -
                                                 ============    ============

Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations.  Should a change in ownership occur, net
operating loss carryforwards may be limited as to use in future years.



<PAGE>
<PAGE> 34
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

g.  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 the Company's plant and products purchased for resale.

h.  Property and Equipment

Property and equipment are stated at cost.  Expenditures for small tools,
ordinary maintenance and repairs are charged to operations as incurred.  Major
additions and improvements are capitalized.  Depreciation is computed using
the straight-line method over estimated useful lives as follows:

    Building and improvements  40 years
    Equipment                   5 to 7 years
    Furniture and fixtures      7 years
    Automobiles                 5 years

Depreciation expense for the years ended June 30, 2001 and 2000 was $173,825
and $223,770, respectively.

i. Revenue Recognition

Revenue is recognized upon shipment of goods to the customer.

j.  Goodwill

Goodwill was originally recorded which consisted of the excess of the purchase
price over the fair value of net tangible assets of the purchased subsidiary
and was amortized on the straight-line method over a 5 year period.

During the year ended June 30, 1998, an impairment loss of $1,694,111 was
recorded since the Company was unable to determine the present value of the
future cash flows of the purchased subsidiary. The subsidiary was later sold.

<PAGE>
<PAGE>  35
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

k.  Patents

Patents have been capitalized at June 30, 2001 totaling $45,639. Amortization
expense for the years ended June 30, 2001 and June 30, 2000 was $1,588 and
$2,141, respectively. The Company recorded an impairment loss of $44,784
during the year ended June 30, 2000 on certain patents that were disposed of
during the year.

The Company evaluates the recoverability of intangibles and reviews the
amortization period on an annual basis. Several factors are used to evaluate
intangibles, including, but not limited to, managements's plans for future
operations, recent operating results and projected, undiscounted cash flows.

l.  Advertising

The Company follows the policy of charging the costs of advertising to expense
as incurred.

m.  Long Lived Assets

All long lived assets are evaluated yearly for impairment per SFAS 121.  Any
impairment in value is recognized as an expense in the period when the
impairment occurs.

n.  Changes in Accounting Principle

The Company has adopted the provisions of FASB Statement No. 138 "Accounting
for Certain Derivative Instruments and Hedging Activities, (an amendment of
FASB Statement No. 133.)" Because the Company had adopted the provisions of
FASB Statement No. 133, prior to June 15, 2000, this statement is effective
for all fiscal quarters beginning after June 15, 2000.  The adoption of this
principle had no material effect on the Company's financial statements.

<PAGE>
<PAGE>  36
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

n.  Changes in Accounting Principle (Continued)

The Company has adopted the provisions of FASB Statement No. 140 "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities (a replacement of FASB Statement No. 125.)"  This statement
provides accounting and reporting standard for transfers and servicing of
financial assets and extinguishments of liabilities.  Those standards are
based on consistent application of a financial-components approach that
focuses on control.  Under that approach, the transfer of financial assets,
the Company recognized the financial and servicing assets it controls and the
liabilities it has incurred, derecognizes financial assets when control has
been surrendered, and derecognizes liabilities when extinguished.  This
statement provides consistent standards for distinguishing transfers of
financial assets that are sales from transfers that are secured borrowings.
This statement is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after March 31, 2001.  This
statement is effective for recognition and reclassification of collateral and
for disclosures relating to securitization transactions and collateral for
fiscal years ending after December 15, 2000.  The adoption of this principle
had no material effect on the Company's financial statements.

The Company has adopted the provisions of FIN 44 "Accounting for Certain
Transactions Involving Stock Compensation (an interpretation of APB Opinion
No. 25.)"  This interpretation is effective July 1, 2000.  FIN 44 clarifies
the application of Opinion No. 25 for only certain issues.  It does not
address any issues related to the application of the fair value method in
Statement No. 123.  Among other issues, FIN 44 clarifies the definition of
employee for purposes of applying Opinion 25, the criteria for determining
whether a plan qualifies as a noncompensatory plan, the accounting consequence
of various modifications to the terms of a previously fixed stock option or
award, and accounting for an exchange of stock compensation awards in a
business combination.  The adoption of this principle had no material effect
on the Company's financial statements.

o.  Pronouncements Issued Not Yet Adopted

In July, 2001, the Financial Accounting Standards Board issued two statements
- Statement 141, Business Combinations, and Statement 142, Goodwill and Other
Intangible Assets, which will potentially impact the Company's accounting for
its reported goodwill and other intangible assets.

Statement 141:

 + Eliminates the pooling method for accounting for business combinations.

 + Requires that intangible assets that meet certain criteria be reported
separately from goodwill.





<PAGE>  37
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

o.  Pronouncements Issued Not Yet Adopted (Continued)

Requires negative goodwill arising from a business combination to be recorded
as an extraordinary gain.

Statement 142:

 +  Eliminates the amortization of goodwill and other intangibles that are
determined to have an indefinite life.

 + Requires, at a minimum, annual impairment tests for goodwill an other
intangible assets that are determined to have an indefinite life.

Upon adoption of these Statements, the Company is required to:

 + Re-evaluate goodwill and other intangible assets that arose from business
combinations entered into before July 1, 2001.  If the recorded other
intangible assets do not meet the criteria for recognition, they should be
reclassified to goodwill.  Similarly, if there are other intangible assets
that meet the criteria for recognition but were not separately recorded from
goodwill, they should be reclassified from goodwill.

 + Reassess the useful lives of intangible assets and adjust the remaining
amortization periods accordingly.

 + Write-off any remaining negative goodwill.

The Company has not yet completed its full assessment of the effects of these
new pronouncements on its financial statements and so is uncertain as to the
impact.  The standards generally are required to be implemented by the Company
in its 2002 financial statements.

p.  Equity Securities

Equity securities issued for services rendered have been accounted for at the
fair market value of the securities on the date of issuance.

q.  Concentrations of Risk

The Company maintains several accounts with financial institutions.  The
accounts are insured by the Federal Deposit Insurance Corporation up to
$100,000.  The Company's balances occasionally exceed that amount.

The Company also maintains a Commercial Automated Investment Account, in which
Company funds are invested into securities at the closing of each banking day.
These securities are then repurchased from the Company by the financial
institution at the opening of the banking day immediately succeeding the date
of investment for an amount equal to the investment, plus interest.  The
securities pertaining to this account are direct obligations of, or are fully
guaranteed as to principal and interest by, the United States Government, or
an agency thereof.



<PAGE>  38
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

q.  Concentration of Risk (Continued)

Credit losses, if any, have been provided for in the financial statements and
are based on management's expectations.  The Company's accounts receivable are
subject to potential concentrations of credit risk.  The Company does not
believe that it is subject to any unusual risks, or significant risks in the
normal course of its business.

r.  Stock Options

The Company applies Accounting Principles Board ("APB") 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for all
stock option plans.  Under APB 25, compensation cost is recognized for stock
options granted to employees when the option price is less than the market
price of the underlying common stock on the date of grant.

FASB Statement 123, "Accounting for Stock-Based Compensation" (SFAS No. 123"),
requires the Company to provide proforma information regarding net income
(loss) and net income (loss) per share as if compensation costs for the
Company's stock option plans and other stock awards had been determined in
accordance with the fair value based method prescribed in SFAS No. 123.  The
Company estimates the fair value of each stock award at the grant date by
using the Black-Scholes options pricing model using the following assumptions.
The U.S. Treasury rate for the period equal to the expected life of the
options was used as the risk-free interest rate.  The expected life of the
options is two to five years.  The volatility used was 1.377% based upon the
historical price per share of shares sold.  There are no expected dividends.

Under the accounting provisions of SFAS No. 123, the Company's net loss for
the years ended June 30, 2001 and 2000 would have changed from the reported
net loss as follows:
                                                    2001           2000
                                                 ----------     ----------
Net loss:
     As reported                                $(3,366,228)    $(1,897,712)
     Pro forma                                   (3,401,718)     (1,897,712)

Net loss per share:
     As reported                                $     (0.28)    $     (0.23)
     Pro forma                                        (0.28)          (0.23)



<PAGE>
<PAGE>  39
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 2 - STOCK SUBSCRIPTION RECEIVABLE

During the year ended June 30, 1998, an officer of the Company signed an
agreement and note to purchase 200,000 shares of the Company's common stock at
a price of $2.00 per share. At June 30, 2001, the entire $400,000, plus
accrued interest of $102,000, was owed under the note, which has been
presented as a reduction of stockholders' equity. The note bears interest at
8.50% per annum and was due in five equal annual installments beginning June
30, 1999, with payment in full no later than June 30, 2003. No payment had
been received, however, at June 30, 2001. The officer was subsequently
terminated in July 1999. Management of the Company is currently negotiating
with the former officer to collect the entire $400,000 plus interest or to
cancel the shares. Management is uncertain at June 30, 2001 what the outcome
of these negotiations will be.

During the year ended June 30, 2000, the Company issued 1,000,000 shares of
common stock for various notes receivable totaling $750,000. These notes bear
interest at rates of 8.0% and 8.5% per annum and are due in full on December
1, 2002. These notes are also being presented as a reduction of stockholders'
equity.

During the year ended June 30, 2001, the Company issued 250,000 shares of
common stock for various notes receivable totaling $250,000. These notes are
being presented as a reduction of stockholders equity. During the years ended
June 30, 2001 and 2000, $37,770 and $12,016, respectively, was received on
these notes receivable. Additional interest of $6,093 has been recorded,
bringing the total balance owed at June 30, 2001 to $1,458,307.

NOTE 3 - RELATED PARTY TRANSACTIONS

In August 1995, the Company entered into employment agreements with two of its
officers.  These two agreements were for 36 months at a monthly compensation
of $10,000 each.  At June 30, 1997, $100,000 was owed to the two officers for
unpaid wages.  In addition, $50,000 was due to another officer at June 30,
1997 for services rendered to the Company from February 1, 1997 to June 30,
1997.  At June 30, 1998, $140,000 of the unpaid wages was converted to a note
payable.  Interest on the note payable consisted of 14,000 shares of the
Company's common stock valued at $28,000 (effective interest rate of 40%).
The $140,000 principal amount was converted to 140,000 shares of common stock
during the year ended June 30, 1999.  An additional $6,000 was loaned to the
Company by this officer during the year ended June 30, 1999.  This amount was
subsequently paid during the year ended June 30, 2000.

As of June 30, 2001, $93,597 ($77,000 principal plus $16,597 of accrued
interest) was owed to a former officer of the Company.  The amount is
unsecured, due on demand and accrues interest at 8.50% per annum.  The Company
is currently working on negotiations with the former officer to settle the
amount owed (see Note 4).


<PAGE>
<PAGE>  40
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 3 -  RELATED PARTY TRANSACTIONS (Continued)

The Company entered into an Agreement of Settlement and Mutual Release on
August 19, 1997 with two former officers and another employee of the Company.
As part of the settlement agreements, the Company agreed to pay a total of
$360,000 for accrued wages and the purchase and cancellation of 1,270,000
shares of the Company's outstanding common stock.  $160,000 was paid on the
date of the agreement and the remaining $200,000 was paid in full during the
year ended June 30, 2000.

On October 29, 1999, the Company entered into an exclusive license agreement
with the Company's President and two unrelated parties to license certain
intellectual property rights known as "Apparatus for Making Foam Products" and
"Method for Making Polyurethane Tires with an Outer Skin" embodied in United
States Patent No.'s 4,943,223 and 4,855,096, respectively.  The agreement
grants the Company an exclusive license to use, sell, license, or otherwise
exploit the technology worldwide in exchange for a royalty of $0.25 per unit
sold for all wholesale or retail sales of units produced utilizing the
technology.  The agreement provides for certain minimum production/royalty
requirements following the first year in order to maintain the exclusive
license.  The licensors may terminate the agreement should the Company fail to
pay any required royalty when due or fail to meet the minimum
production/royalty requirements.  As of June 30, 2001, the Company had no
royalty obligation relating to this agreement.

The Company issued 180,000 shares of common stock to its former president in
lieu of salary from July 1, 1998 to June 30, 2001.  These shares were recorded
at the average trading price of the stock of $2.00 on the date of issuance
resulting in an original prepaid amount of $360,000.  Amortization through
June 30, 1999 was $120,000. The former president was terminated during July
1999.  Management is alleging that the termination was with cause and
therefore, the original employment agreement was voided.  Management intends
on vigorously trying to recover a portion of the original 180,000 shares
issued.  Because the ultimate outcome of this is uncertain, the remaining
$240,000 of prepaid salary expense was written off during the year ended June
30, 1999 as a "loss on termination of employment agreement."

NOTE 4 - COMMITMENTS AND CONTINGENCIES

The Company maintains an executive office suite in Boulder City, Nevada.
During the year ended June 30, 2001, the Company renewed its lease for one
year, beginning in April 2001.  The monthly rental payment on this property
throughout the lease term is $3,750.

On February 18, 2000, the Company entered into a separate office lease in Las
Vegas, Nevada for five years beginning on March 1, 2000.  The monthly rental
payment is $8,400 for the first twelve months with annual increases based on
the Consumer Price Index.



<PAGE>
<PAGE>  41
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 4 -  COMMITMENTS AND CONTINGENCIES (Continued)

During July 1999, the Company signed a three year employment agreement with a
new Chief Executive Officer.  The agreement required the Company to pay a base
annual salary of $100,000.  The amount was to be paid in a combination of cash
and shares of common stock based upon the market value of the stock at the
time of issuance.  During the year ended June 30, 2000, this officer resigned.
During the year ended June 30, 2001, management of the Company entered into a
settlement agreement with the former officer whereby the Company was required
to pay the former officer a total of $60,000 cash (in periodic payments) and
issue 10,000 shares of the Company's common stock. $20,000 was paid and the
common shares were issued prior to June 30, 2001. The remaining $40,000 has
been accrued as of June 30, 2001.

In April 2000, the Company filed an action in the United States District Court
against Roger A Fleming ("Fleming"), a former officer, director and current
shareholder.  This claim is based upon Mr. Fleming's alleged breach of an
employment contract and also includes additional claims against Fleming for
breach of fiduciary duty, breach of covenant of good faith and fair dealing,
intentional interference with business relations and prospective economic
advantage, defamation, intentional misrepresentation and detrimental reliance
and for monies due on a promissory note (see Note 2).  In addition to monetary
damages, the Company is seeking return of the common stock issued to Fleming
pursuant to his employment agreement.  During the reporting period, cause of
action was moved to the United States District Court for the Northern District
of Ohio, Eastern Division, pursuant to a motion by the defendant.  The Company
is currently trying to negotiate a settlement with Fleming for the return of
common stock and the cancellation of certain debts claimed to be owed by the
Company to Fleming.  The outcome of these settlement arrangements cannot
currently be determined



<PAGE>
<PAGE>  42
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 5 -  STOCK TRANSACTIONS

During the year ended June 30, 1998, the Company issued 152,250 shares of
common stock valued at $492,781 in lieu of interest on promissory notes.  The
Company issued 400,000 shares of common stock valued at $400,000 in lieu of
outstanding debt.  The Company also issued 305,000 shares of common stock
under related party compensation contracts valued at $610,000 and 264,752
shares of common stock for services valued at $529,504.

During the year ended June 30, 1999, the Company issued 1,135,000 shares of
common stock valued at $1,135,000 and 90,000 shares of common stock valued at
$45,000 in lieu of outstanding note payable debt.  In addition, the Company
issued 7,225 shares of common stock valued at $6,738 in lieu of interest on
promissory notes.  The Company also issued 875,000 shares of common stock for
$437,500 and 90,000 shares for services rendered valued at $45,000.

During the year ended June 30, 2000, the Company issued 2,648,754 shares of
common stock for $1,445,062 and 363,306 shares of common stock valued at
$315,092 for services rendered.  In addition, the Company issued 1,000,000
shares of common stock for notes receivable of $750,000, 12,500 shares of
common stock valued at $12,500 for equipment and 322,000 shares of common
stock valued at $672,000 for prepaid expenses.

During the year ended June 30, 2001, the Company issued 1,614,519 shares of
its common  stock for $2,693,597 in cash.  In addition, the Company issued
42,500 shares for prepaid expenses valued at $80,000.  The Company also issued
250,000 shares for notes receivable (exercise of options) totaling $250,000,
and 221,581 shares for services rendered, valued at $584,687.

NOTE 6 -  STOCK SUBSCRIPTION DEPOSIT

As of June 30, 2001, the Company had received a total of $25,000 for the
purchase of 12,500 shares of common stock.  These 12,500 shares were issued
subsequent to June 30, 2001.  The $25,000 is being shown as a stock
subscription deposit at June 30, 2001.

<PAGE>
<PAGE>  43

                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 7 -  STOCK OPTIONS AND WARRANTS OUTSTANDING

During the year ended June 30, 2001, the following stock options were granted:

a.  Pursuant to a Consulting and Non-Disclosure Agreement, the Company granted
to a consultant an option to purchase 100,000 shares of common stock
exercisable at $3.00 per share that expire on April 16, 2003.

b.  Pursuant to a Professional Services Engagement Contract, the Company
granted an attorney an option to purchase 50,000 shares of common stock
exercisable at $2.00 per share that expire on December 21, 2005. 12,500 of the
options were exercised during the year ended June 30, 2001.

c.  Pursuant to a Consulting Agreement, the Company granted to a consultant
and director an option to purchase 250,000 shares of common stock exercisable
at $3.00 per share that expire on April 16, 2003.

d.  The Company granted to an attorney an option to purchase 50,000 shares of
common stock exercisable at $2.00 per share that expire December 21, 2005.
These options were exercised during the year ended June 30, 2001.

e.  In August 2000, the Company entered into an exclusive worldwide sales and
marketing agreement with Focus Sales and Marketing, LLC (Focus), to market the
Company's "Flat-Free" bicycle tires under the brand name "AirRiders (TM)"
worldwide.  The marketing agreement extended through July 31, 2001.  As part
of the agreement, the Company granted to Focus the following options: 1)
500,000 options to purchase common stock at $3.00 per share exercisable
through August 1, 2004 (immediately vested), 2) 500,000 options to purchase
common stock at $3.00 per share exercisable through July 31, 2005 (vest on
July 31, 2001), 3) 1,000,000 options to purchase common stock at $5.50 per
share exercisable through July 31, 2006 (subsequently canceled) and 4)
1,000,000 options to purchase common stock at $8.00 per share exercisable
through July 31, 2008 (subsequently canceled).


<PAGE>
<PAGE> 44
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 7 -  STOCK OPTIONS AND WARRANTS OUTSTANDING (Continued)

A summary of the status of the Company's stock options as of June 30, 2001 and
changes during the year ended June 30, 2001 are presented below:

                                                   Weighted    Weighted
                                                   Average     Average
                                         Stock     Exercise   Grant Date
                                        Options     Price     Fair Value
                                       ---------  ---------   ----------
Outstanding, June 30, 2000               330,000  $    0.79   $     0.00
    Granted                            3,450,000       5.14         0.18
    Expired/Canceled                    (100,000)      0.50         0.00
    Exercised                           (262,500)      1.05         0.10
                                       ---------  ---------   ----------
Outstanding, June 30, 2001             3,417,500  $    5.17   $     0.17
                                       =========  =========   ==========
Exercisable June 30, 2001                917,500  $    2.93   $     0.35
                                       =========  =========   ==========

The following summarized the exercise price per share and expiration date of
the Company's outstanding options to purchase common stock at June 30, 2001:

              Expiration Date          Price            Number
              ----------------         -----         ------------
              August 1, 2004           $3.00              500,000
              July 31, 2005            $3.00              500,000
              July 31, 2006            $5.50            1,000,000
              July 31, 2008            $8.00            1,000,000
              December 21, 2005        $2.00               37,500
              April 16, 2003           $3.00              350,000
              June 1, 2003             $2.00               30,000
                                                     ------------
                                                        3,417,500
                                                     ============

At June 30, 2000, the Company had 225,000 warrants outstanding. During the
year ended June 30, 2001, 25,000 of these warrants expired, and the remaining
200,000 were canceled. There were no warrants outstanding at June 30, 2001.

NOTE 8 - PREPAID EXPENSES

During the year ended June 30, 2001, the Company issued 20,000 shares of
common stock valued at $35,000 for prepaid legal fees.  Amortization of these
fees as of June 30, 2001 totaled $3,500, leaving the prepaid legal fees
balance at $31,500.

In addition, the Company also issued 22,500 shares of its common stock valued
at $45,000 for prepaid rent, to be amortized over a period of twelve months at
$3,750 per month.  At June 30, 2001, amortization on this amount totaled
$11,250, leaving the prepaid rent balance at $33,750.

The total of these prepaid expenses at June 30, 2001 was $65,250, and has been
presented on the balance sheet as a reduction in stockholders' equity.


<PAGE> 45
                           AMERITYRE CORPORATION
                   (Formerly American Tire Corporation)
                      (A Development Stage Company)
                    Notes to the Financial Statements
                             June 30, 2001

NOTE 9 - GOING CONCERN

The Company's 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.  The Company has historically incurred significant losses which have
resulted in an accumulated deficit of $13,565,507 at June 30, 2001 which
raises substantial doubt about the Company's 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.  It is the intent of management to create
additional revenues through the development and sales of its patented tires
and to obtain additional equity financing if required to sustain operations
until revenues are adequate to cover the costs.

NOTE 10 - SUBSEQUENT EVENTS

The following subsequent events occurred subsequent to June 30, 2001:

  1.  The Company entered into an Agreement for Purchase and Sale of Real
Estate during September 2001 to sell the Company's building and land in
Ravenna, Ohio for $320,000.

  2.  Concurrent with the cancellation of a Marketing Agreement with Focus
Sales and Marketing, a total of 2,000,000 options were canceled effective July
31, 2001 (see Note 7).

  3.  On August 30, 2001, the Company entered into an exclusive agreement with
The Goodyear Tire & Rubber Company to jointly develop urethane tires with the
ultimate objective of replacing rubber automobile tires.

  4.  In July 2001, the Company issued 10,000 shares of its common stock to an
attorney for prepaid legal services valued at $20,000.  In addition, the
Company issued 20,000 shares in exchange for a subscription receivable
totaling $40,000, and 5,000 shares, valued at market value on the date of
issuance, in exchange for services rendered, totaling $21,500.  The Company
also issued 2,000 shares for cash at $1.75 per share totaling $3,500 and
278,000 shares at $2.00 per share for cash totaling $557,000.