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

                                  FORM 10-KSB

(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, 1999
                                     -------------
  [ ] 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
                                            ----------
                               AMERICAN TIRE 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-B 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:  $29,797
                                                            -------

<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 30, 1999, of $1.20 per share, the market value of shares held by
nonaffiliates (4,491,158 shares) would be approximately $5,389,390.

  As of June 30, 1999, the Registrant had 6,816,475 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
-------------------
     American Tire Corporation, a Nevada corporation (the "Company"), was
organized on January 30, 1995, to take advantage of existing proprietary and
non-proprietary 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 urathanes 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 tires are best identified as
"flat-free" in that they have no inner tube and do not require inflation, but
rely on the infrastructure of the tire 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 bicycle tires are maintenance free and eliminate tedious puncture
repair or the need for a bicycle pump.  The flat-free tires are designed  for
use by "On/Off" road and "Highway" bicycles. At June 30, 1999, the Company did
not produce any products other than bicycle and lawn and garden tires.

     Through June 30, 1999, 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.  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.

     (3)  Direct Marketing.  In June 1999, the Company entered into a
Television Commercial Agreement with American Independent Network ("AIN"),
Fort Worth, Texas, to produce a series of television commercials designed to

<PAGE> 4

promote the Company's Products. In an effort to develop brand awareness and
additional market penetration the Company intends to introduce a limited
number of bicycles under the tradename "Lazer[TM].  The Lazer[TM] bicycles
will be mounted with the Company's flat-free tires.  In addition, tire-wheel
assemblies will also be offered. The Company will pay AIN a commission on each
bicycle and/or tire-wheel assembly sold through the direct marketing
commercials. The television commercials will be air during various time slots
on AIN affiliated stations beginning the first of December 1999.

Urathon Limited
---------------
     In February 1997, the Company acquired all of the capital stock of UTI
Chemicals (Europe) Ltd, a United Kingdom corporation ("UTI-UK"), from Coronel
Investments Limited, a Jersey corporation ("Coronel").  UTI-UK's name was
subsequently changed to Urathon Limited.  Urathon Limited has been operated as
the Company's wholly owned subsidiary and has distributed product in the
United Kingdom and Europe under the trade name "Urathon TM" through
independent representatives and distributors.

     In June 1999, due to lack of sufficient working capital to adequately
exploit the United Kingdom and European markets and in an effort to reduce
expenses, the Company's management decided to discontinue its distribution
operations in Europe.  Through a Share Purchase Agreement dated June 9, 1999,
the Company transferred its ownership interest in Urathon Limited back to
Coronel.  As a result of the transfer, Coronel, through its ownership
interest, assumed the operations, including the assets and liabilities of
Urathon Limited. The trademark license agreement to utilize the U.S.
registered trademark "Urathon" will remain in effect through the balance of
its term.

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.
<PAGE> 5

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. At present, the Company has not accumulated a sufficient
number of molds in the various tire sizes necessary to determine with any
degree of consistency the maximum production efficiency of its production
equipment.  However, the Company estimates that it could produce about 8 to 10
million tires per year without expansion from its Ravenna facility. 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.

     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

Spin-casting Apparatus for Manufacturing
 an Item from Polyurethane Foam            5,906,836              5/25/1999


Description of Patent Pending          Application Number
-----------------------------          ------------------

Method for Manufacturing an Item
 from Polyurethane Foam                    08/562,838

Tire/Wheel Attachment Methods              09/093,148
                              
<PAGE>
<PAGE> 6

Further Research and Development
--------------------------------
     Because of the Company's limited financial resources, the Company has not
made any significant expenditures for new research and development during the
recently completed fiscal year.  The Company does not anticipate expending any
substantial sums for new research and development programs during the fiscal
year ended June 30, 2000 until the working capital is available to justify
such expenditures.

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]" 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.

Employees
---------
     As of June 30, 1999, the Company had  8 full-time employees, including 5
administrative and 3 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
-------
     The Company's 26,000 sq. ft. manufacturing/distribution/office facility
is located on 4.15 acres of real property at 446 West Lake Street, Ravenna,
Ohio, and consists of 1,000 sq. ft. of administrative offices and 25,000 sq.
ft. of manufacturing space. The facility is constructed of masonry and steel
and is equipped with a one-half ton chain hoist, overhead sprinkler system,
and two loading docks. The Ravenna facility will be utilized for tire
production.  Management of the Company believes that the Ravenna facility will
be sufficient to handle projected  production needs for the next five years.

     Beginning in June 1997, the Company maintains an executive office suite
consisting of approximately 1,100 square feet located at 705-B Yucca Street,
Boulder City, Nevada. The facility is subleased from American Environmental
Corporation, a company controlled by Richard A. Steinke, an affiliate of the
Company, who in turn leases the facility from Micro Instrument Corp, an
unrelated entity.  The Company pays American Environmental Corporation a fee
of $425 per month to occupy the office suite.  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.
<PAGE>7

                            ITEM 3. LEGAL PROCEEDINGS

None.

        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, 1999.

                                  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, 1998
-------------------------------
First Quarter                                  $7.785        $2.875
Second Quarter                                 $5.625        $2.5625
Third Quarter                                  $4.50         $2.375
Fourth Quarter                                 $4.00         $1.625

Fiscal Year Ended June 30, 1997
-------------------------------
First Quarter                                   N/A           N/A
Second Quarter                                 $9.375        $6.00
Third Quarter                                  $9.125        $6.00
Fourth Quarter                                 $6.125        $2.25

     At  September 30, 1999, the Company's Common Stock was quoted on the OTC
Bulletin Board at a bid and asked price of $1.125 and $1.28125, 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 30, 1999, the Company had approximately 293
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.

Year 2000 Disclosure
--------------------
     The Company is working to resolve the potential impact of the year 2000
on the ability of the Company's computerized information systems to accurately
process information that may be date-sensitive.  Any of the Company's programs
that recognize a date using "00" as the year 1900 rather than the year 2000
could result in errors or system failures.  The Company utilizes a minimum
number of computer programs in its operations.  The Company has completed its
assessment, and believes it to be compliant.  The Company believes the cost of
compliance did not have a material adverse impact on the Company's financial
position.  However, if third parties upon which the Company relies are unable
to address this issue in a timely manner, it could result in a material
financial risk to the Company.

Results of Operations
---------------------

Year ended June 30, 1999 compared to year ended June 30, 1998
-------------------------------------------------------------
     During its operating history the Company has had limited revenues from
the sale of its Products. Total revenues for the year ended June 30, 1999 were
$29,797 compared to $38,653 for the same period in 1998. Since inception on
January 30, 1995, the Company has had total sales of $82,956. Costs of sales
for the year ended June 30, 1999 were $41,244, or 141% of sales as compared to
$93,810 or 242% of sales for the year ended June 30, 1998.  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 of the Company
believes that it currently has sufficient employees to merit a substantial
increase in production without incurring a proportionately equivalent increase
in labor costs.

     During the fiscal year ending June 30, 2000, the Company will begin the
marketing of a line of bicycles utilizing the Company's "flat-free" bicycle
tires.  Introduction of the bicycles should begin in December 1999. Other than
the new revenue source derived from the sale of the bicycles, the Company
knows of no 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 1999, total operating expenses were
$1,397,049, consisting mainly of payroll and payroll taxes of $680,344 and
selling, general and administrative expenses of $393,734, resulting in a loss
<PAGE> 9

from operations of $(1,408,496).  Total expenses for fiscal year 1998 were
$1,872,163 consisting of mainly of payroll and payroll taxes of $1,118,073 and
selling, general and administrative expenses of $457,990, resulting in a loss
from operations of $(1,927,320). The decrease in the operating expenses during
fiscal year 1999 can be attributed directly to a decrease in payroll and
payroll taxes, resulting from the reduction of several management and
technical support personnel positions.

     Interest Expense.  Interest expense for fiscal 1999 was $200,480 as
compared to $343,397 in fiscal 1998.  The decrease in interest expense for
fiscal year 1999 is directly attributed to the conversion to equity of
convertible promissory notes issued during previous periods.

     Other Income (Expense).  For fiscal 1999, the Company had other income of
$34,460, which amount represents the interest accrued on a stock subscription
receivable from a former affiliate of the Company.  The Company experienced a
loss on the termination of the employment agreement with its former president
of $240,000, which amount represents pre-paid employment compensation
previously expensed over the term of the employment agreement. (See Note 3 -
Related Party Transactions to the Financial Statements).  For fiscal 1998,
other expenses were a net $2,044,013, of which, substantially all was
represented by an impairment loss $(1,694,111) because of the Company's
inability to determine the present value of the future cash flows of its
wholly owned subsidiary, Urathon Limited.  (See Note 10 - LOSS FROM
DISCONTINUED OPERATIONS and Note 1 (j) - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, Goodwill in the financial statements.)

     The Company experienced a net comprehensive loss of $(1,782,518) for the
year ended June 30, 1999, compared with a net comprehensive loss of
$(4,267,641) for the year ended June 30, 1998. The basic loss per share for
fiscal 1999 was $(0.31) as compared to $(1.20) for fiscal 1998, based on the
weighted average number of shares outstanding of 5,701,524 and 3,555,799 for
the respective periods.

Liquidity and Capital Resources
-------------------------------
     During the fiscal year ended June 30, 1999, the Company financed
operations through the issuance of common stock for cash, conversion of debt,
prepayment of salaries, and payment of professional services; however, the
Company will require additional working capital to continue its business
operations.

     The Company had current assets of $58,972 and current liabilities of
$364,462, for a working capital deficit of $(305,490) at June 30, 1999. The
Company had cash and cash equivalents of $3,291 and accounts receivable of
$1,562 for the same period.  Cash used in operations for the fiscal year ended
June 30, 1999 was $698,334 and $1,041,492 for the fiscal year ended June 30,
1998.  Cash used in operations for the fiscal year ended June 30, 1999 was
funded primarily by cash received from the sale of common stock and the
issuance of common stock for services and salary.  At June 30, 1999, the
Company had net property and equipment of $934,298, after deduction of
$465,510 in accumulated depreciation.  The Company's property and equipment
consists mainly of land ($59,000), building and improvements ($262,235), and
equipment ($1,070,881). Because at June 30, 1999, the Company has an
accumulated deficit during the development stage of $(8,301,567), has a
working capital deficit and limited internal financial resources, the report
of the Company's auditor contains a going concern modification as to the
ability of the Company to continue.
<PAGE> 10

     During fiscal 1999, the Company continued to effect measures to reduce
cash outflows and increase working capital through the issuance of additional
shares of common stock for services and conversion of debt.

     The Company is aware of its ongoing cash requirements and has implemented
a cash flow plan, including continued reduction in its general and
administrative expenses.  Additionally, the Company has developed an overall
strategy and certain financing options to meet its ongoing needs through June
30, 2000.  Due to the need for working capital, the Company will continue to
seek additional debt and/or equity financing from existing shareholders and
other investment capital resources.  The Company has a subscription receivable
from an affiliate to provide an additional $500,000 in additional equity to
the Company (Note 9 - SUBSEQUENT EVENTS), however, no assurance can be given
that the Company will be able to obtain any other commitments.  Because of the
Company's limited financial resources, the Company does not anticipate
expending any substantial sums for new research and development during the
fiscal year ended June 30, 2000.

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, 1999, 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.

<PAGE>
<PAGE> 11

          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, 1999, and the term of office of each director of the Company.

   Name            Age   Position                    Director or Officer Since
   ----            ---   --------                    -------------------------
Richard Steinke    57    Chairman, Director, CEO     January 1995  (1)
Roger A. Fleming   59    President and Director      February 1997 (2)
John Hoffman       58    Vice-President and CEO      March 1999    (3)
Hugh Sims-Hilditch 63    Vice-President and Director February 1997 (4)
Louis M. Haynie    72    Director                    July 1997
Ping Zhang         33    Vice-President and Director February 1997
Henry D. Moyle     70    Director                    March 1999
William Watkins    71    Director                    March 1999
David K. Griffiths 62    Treasurer/Controller        February 1995
---------------------
(1)  Mr. Steinke resigned as CEO in March 1999.
(2)  Mr. Flemings employment as President was terminated July 24, 1999.
(3)  Mr. Hoffman was named CEO in March 1999.
(4)  Mr. Sims-Hilditch resigned as an officer and director in January 1999.


     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.  However, Directors have not, nor is it anticipated they
will, receive any additional compensation for attending Directors' meetings.

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

     Richard Steinke is a founder of the Company and currently serves as its
Chairman and Chief Executive Officer.  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.



<PAGE> 12

     Roger A. Fleming joined the Company in February 1997 as Vice-President of
Technology.  Prior to joining the Company Mr. Fleming was a senior engineer at
Goodyear Tire & Rubber Company, Akron, Ohio, where Mr. Fleming had worked for
over 31 years.  Mr. Fleming holds many patents in product and process design
and has managed the development of Goodyear's liquid phase united spare tire.
Mr. Fleming received a degree in Chemical Engineering from North Carolina
State University, Raleigh, North Carolina in 1963.

     Louis M. Haynie was appointed to the Company's board of directors in July
1997 and currently is a Director of Research Medical, Inc. [NASDAQ: RMED],
Salt Lake City, Utah, a developer, manufacturer and distributor of a
diversified line of health care products, focusing on specialized
cardiovascular, vascular and blood management surgical devices and specialty
pharmaceuticals.  Mr. Haynie's  past board services include 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.

     Ping Zhang became a director of the Company in February 1997 and
currently serves as a Vice-President. Mr. Zhang's responsibilities included
investigating and developing opportunities and business relationships for the
Company and its products in the Far East.  Mr. Zhang has for the past four
years been actively involved in promoting U.S.- China business and trade
relationships.  Mr. Zhang received a Masters Degree in Manufacturing and
Industrial Technology from Arizona State University, Tempe, Arizona, in 1993,
and a degree in Mechanical Engineering from Shanghai Jiatong University,
Shanghai, China, in 1991.

     John Hoffman joined the Company as its CEO in March 1999. From March 1997
to April 1998, Mr. Hoffman was the North American Regional Manager for the
EIMCO Process and Equipment Division of Baker Hughes, Inc.  From June 1981
until March 1997, Mr. Hoffman was worked in various regional and general
manager positions for Hughes Christensen/Eastman Christensen/North
Christensen, in Salt Lake City, Utah; Santiago, Chile; Houston, Texas; Dubai,
U.A.E.; Singapore; and Buenos Aires, Argentina.

     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 Watkins was appointed to the Company's board of directors in
March 1999.  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.

<PAGE>
<PAGE> 13

     David K. Griffiths currently serves as the Company's Treasurer and
principal accounting officer and has since 1960 been self-employed as an
accountant/consultant for various small businesses.  Mr. Griffiths offers the
Company 36 years experience in accounting and accounting related systems.  Mr.
Griffiths received a B.S. in Accounting from Arizona State University, Tempe,
Arizona in 1961.

KEY EMPLOYEES
-------------
     James G. Moore, Jr. joined the Company in August 1997 and is employed as
the Company's manager of mold design and processing.  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.

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.

                     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, 1999, 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  1999 $120,000    -0-      -0-         -0-      -0-     -0-       -0-
Richard A. Steinke  1997  120,000    -0-      -0-         -0-      -0-     -0-       -0-
C.E.O. and Chairman 1996   90,000(1) -0-      -0-         -0-      -0-     -0-       -0-

Roger A. Fleming    1999 $240,000 $  9,569(2) -0-         -0-      -0-     -0-     $240,000(4)
Pres. and Director  1998 $130,000 $400,000(3) -0-         -0-      -0-     -0-       -0-
(since 7/1/97)

Dennis S. Chrobak   1997 $90,000(5) -0-       -0-         -0-      -0-     -0-       -0-
Pres. and Director
(prior to 6/30/97)

</TABLE>

(1) Effective May 1, 1997, Mr. Steinke requested deferral of his monthly
employment compensation under his employment agreement.  The amount set forth
for fiscal year 1997 includes $20,000 of accrued compensation during under the
agreement.
(2) Represents cash bonus accrued to the benefit of Mr. Fleming based on
annual sales revenue during the period.

<PAGE> 14

(3) Represents 200,000 restricted shares of common stock issued as a signing
bonus under Employment Agreement and valued at $2.00 per share.
(4) Represents loss on termination of employment agreement recorded in the
fiscal year ended June 30, 1999.
(5) Effective October 1, 1996, Mr. Chrobak requested deferral of his monthly
employment compensation under his employment agreement.  The amount set forth
includes $90,000 of accrued compensation during under the agreement, which was
paid in full during fiscal year 1998.

Employment Agreements and Benefits
----------------------------------
      In August 1995, the Company entered into an Employment Agreement with
Richard A. Steinke, its Chief Executive Officer.  Beginning October 1, 1996,
the Employment Agreement called for Mr. Steinke 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.  The Company provides group health,
medical, and life 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 the event of
termination of Mr. Steinke's employment, for reasons other than cause, as
defined in the employment agreement, Mr. Steinke's monthly salary would
continue throughout the balance of the term of the employment agreement.
Effective May 1, 1997, Mr. Steinke declined to receive any further
compensation from the Company based on his employment agreement, therefore all
employment compensation due under Mr. Steinke's employment contract since May
1, 1997 has been accrued.  At June 30, 1998, $140,000 of the unpaid salary was
converted to a note payable to Mr. Steinke.  Interest on the note consisted of
14,000 shares of the Company's common stock valued at $28,000.  The amount of
the note was due December 31, 1998, but was converted into additional shares
of the Company's common stock at $1.00 per share.  At June 30, 1998, 75,000
shares of common stock were issued to Mr. Steinke in lieu of salary from July
1, 1998 to October 1, 1999, the remaining term of Mr. Steinke's employment
agreement.  The share issuance was recorded at the average trading price of
the common stock of $2.00 on the date of issuance and resulted in prepaid
compensation of $150,000.  The amount has been amortized as the salary
expenses have been incurred during the term of the employment agreement.

     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 from 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.  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.

<PAGE> 15

     Mr. Flemings employment as President of the Company was terminated in
July 1999 and the balance of his pre-paid employment compensation has been
expensed at June 30, 1999.

     In July 1999, the Company entered into an Employment Agreement with John
R. Hoffman as President and Chief Operating Officer.  Beginning July 16, 1999,
the Employment Agreement in for a term of three years at an annual base salary
of $100,000, to be paid semi-monthly, one payment of $4,166.67 in cash and one
payment of the equivalent amount of the Company's stock based on the stock
value average of the three days prior to the end of the payment period.  This
base salary is subject to increase at the discretion of the Board of
Directors, with provisions for bonus compensation based on specific
performance objectives.  As a signing bonus, Mr. Hoffman received a
nonqualified stock option to purchase up to 100,000 shares of the Company's
Common Stock at an exercise price of $0.50 per share, exercisable for five
years from the date of the Employment Agreement. The Company provides group
health, medical, and life insurance, similar to that which will be made
available to all full time employees and reimburses Mr. Hoffman for out of
pocket expenses incurred in connection with the Company's business.

     As a condition to employment, all the Company's managers 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
-------------------------
     None.

Termination of Employment and Change of Control Arrangement
-----------------------------------------------------------
     Unless otherwise disclosed below, as of June 30, 1999, 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 its subsidiaries, or any change in control of the Company, or a change in
the person's responsibilities following a change in control of the Company.

     On August 19, 1997, the Company entered into an agreement with a
principal shareholder and former officer and director, Dennis S. Chrobak
("Chrobak"), to resolve all disputes between them relating to Chrobak's
employment and ownership interest in the Company.  In connection therewith the
Registrant agreed to pay Chrobak:

<PAGE>
<PAGE> 16

     1.  $80,000, the amount of Chrobak's accrued salary under his employment
agreement, which amount represents the aggregate amount of Chrobak's monthly
employment compensation for the period from October 1996 through May 1997;

     2.  $30,000, towards the recission and cancellation of an October 1996
transaction between the Company and Chrobak, wherein the Company had issued to
Chrobak 15,000 shares of its common stock in exchange for cancellation of a
promissory note from the Company to Mr. Chrobak in the principal amount of
$30,000; and

     3.  $200,000, towards the purchase and cancellation of 1,255,000 shares
of the Company's common stock beneficially owned by Chrobak (the "Chrobak
Shares").  The Chrobak Shares had been issued to Chrobak in February 1995 in
connection with the organization of the Company.  The Company has agreed pay
Chrobak $10,000 per month for 20 consecutive months beginning September 1,
1997.

     At June 30, 1999, the Company owed Chrobak approximately $66,000 under
the terms of the agreement.


<PAGE>
<PAGE> 17

  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of June 30, 1999, the name and the
number of shares of the Company's Common Stock, par value $0.001 per share,
held of record or beneficially by each person who held of record, or was known
by the Company to own beneficially, more than 5% of the 6,816,475 issued and
outstanding shares of the Company's Common Stock, and the name and
shareholdings of each director and of all officers and directors as a group.

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   Roger A. Fleming              D          640,000              9.39
         446 W. Lake Avenue
         Ravenna, OH  44266

Common   Richard A. Steinke            D          222,000              3.26
         705-B Yucca Street            I (2)      455,000              6.67
         Boulder City, NV  89005       I (3)      800,000             11.74

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   Roger A. Fleming, President   D          640,000              9.39
          and Director

Common   Richard A. Steinke, C.E.O.    D          222,000              3.26
          and Director                 I (2)      455,000              6.67
                                         (3)      800,000             11.74

Common   Ping Zhang, V.P. and Director D            2,000               .03

Common   Louis M. Haynie, Director     D           69,000              1.01
                                       I (4)        2,000               .03

Common   David K. Griffiths, Treasurer D           32,817               .48

Common   Henry D. Moyle, Director      D (5)       20,000               .29
                                       I (6)       55,000               .81

Common   William Watkins               I           27,500               .40
                                                ---------             -----
         All Officers and Directors
          as a Group (7 person)        D          985,817             14.46
                                       I        1,339,500             19.65
                                                ---------             -----
         Total Beneficial Ownership             2,325,317             34.11
                                                =========             ====

                        [Footnotes continue on next page]


<PAGE> 18

(1) Indirect and Direct ownership are referenced by an "I" or "D",
respectively.  All shares owned directly are owned beneficially and of record
and such shareholder has sole voting, investment, and dispositive power,
unless otherwise noted.

(2) Represent shares owned beneficially and of record by Gemini Funding
Services Profit Sharing Account, of which Richard A. Steinke is the principal
beneficiary.

(3) Represent shares owned beneficially and of record by S102 Irrevocable
Trust, for which Richard A. Steinke is the trustee.

(4) Represent shares owned beneficially and of record by Gae Haynie, spouse of
Louis M. Haynie, and of which Mr. Haynie may be deemed to have beneficial
ownership.

(5) Represent shares owned beneficially and of record by Vickie L. Moyle, the
spouse of Henry D. Moyle, and of which Mr. Moyle may be deemed to have
beneficial interest.

(6) Represent shares owned beneficially and of record by Dolores Watkins
Trust, of which William D. Watkins is the trustee.

             ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Flat-Free (Non-pneumatic)Tire License Agreement
-----------------------------------------------
     On August 19, 1997, the Company entered into a revised agreement amending
the terms of the October 27, 1995, Non-pneumatic Tire License Agreement with
AMS.  The Non-pneumatic Tire Agreement was amended to provide that the license
be directly between the Company and Mr. Chrobak and Mr. Steinke.  The
agreement grants the Company an exclusive license to use, sell, license, or
otherwise exploit the technology worldwide in exchange for a royalty.  The
revision of the Non-pneumatic License Agreement provides for the royalty to be
reduced from $0.25 to $0.125 for each bicycle tire produced and sold by the
Company utilizing the technology.  All royalties payable under the agreement
are to be paid to Mr. Chrobak.  Mr. Steinke will not receive a royalty under
the agreement so long as he is affiliated with the Company.  Due to the
relationship of Mr. Steinke and Mr. Chrobak with the Company at the time the
agreement was made, the Non-pneumatic License Agreement cannot be considered
to have been negotiated at arm's length.

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.



<PAGE>
<PAGE> 19

                 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 Jones, Jensen & Company                    19
Balance Sheet as of June 30, 1999                                          20
Statements of Operations for the years ended June 30, 1999
 and 1998 and from inception on January 30, 1995 through June 30, 1999     22
Statements of Stockholders' Equity                                         24
Statements of Cash Flows for the years ended June 30, 1999
 and 1998 and from inception on January 30, 1995 through June 30, 1999     28
Notes to Financial Statements                                              30

 (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
-------  ---------  -----------------                             --------
 10       10.01     Service Contract between the Company and
                    McWong International (Shanghai) Co., Ltd.     This Filing

 10       10.02     Television Commercial Agreement between
                    the Company and American Independent Network  This Filing

 27       27        Financial Data Schedule                       This Filing

 (b) Reports on Form 8-K.

     There were no reports on Form 8-K filed with the Commission during the
quarter ended June 30, 1999.

                                  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:

                                        AMERICAN TIRE CORPORATION

Date: November 11, 1999                 By /S/Richard A. Steinke, Chairman of
                                        the Board [Principal
                                        Executive Officer]

Date: November 11, 1999                 By /S/David K. Griffiths, Secretary
                                        Treasurer [Principal Accounting
                                        Officer]



<PAGE> 20

                   INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of American Tire Corporation (a
development stage company) as of June 30, 1999 and the related statements of
operations, stockholders' equity and cash flows for the years ended June 30,
1999 and 1998 and from inception on January 30, 1995 through June 30, 1999.
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 audit.

We have conducted our audit in accordance with generally accepted auditing
standards. 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 consolidated 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 audit and the
report of other auditors 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 American Tire Corporation (a
development stage company) as of June 30, 1999, and the results of its
operations and its cash flows for the years then ended June 30, 1999 and 1998
and from inception on January 30, 1995 through June 30, 1999, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 8 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 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/S/ Jones, Jensen & Company
Salt Lake City, Utah
November 4, 1999

<PAGE>
<PAGE>  21
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                                Balance Sheet

                                    ASSETS
                                    ------
                                                            June 30,
                                                              1999
                                                          ------------

CURRENT ASSETS

 Cash and cash equivalents                                $      3,291
 Accounts receivable                                             1,562
 Inventory (Note 1)                                             40,313
 Prepaid expenses                                               13,806
                                                          ------------
     Total Current Assets                                       58,972
                                                          ------------
PROPERTY AND EQUIPMENT (Note 1)

 Land                                                           59,000
 Building and improvements                                     262,235
 Equipment                                                   1,070,881
 Furniture and fixtures                                          7,692
 Less - accumulated depreciation                              (465,510)
                                                          ------------
     Total Property and Equipment                              934,298
                                                          ------------
OTHER ASSETS

 Patents (Note 1)                                               62,417
 Deposits                                                       15,854
                                                          ------------
     Total Other Assets                                         78,271
                                                          ------------

     TOTAL ASSETS                                         $  1,071,541
                                                          ============

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

<PAGE>
<PAGE> 22

                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                          Balance Sheet (Continued)

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------
                                                            June 30,
                                                              1999
                                                          ------------

CURRENT LIABILITIES

 Accounts payable                                         $    235,830
 Accounts payable - related parties (Note 3)                    80,507
 Accrued expenses                                                2,625
 Note payable - related party (Note 3)                           6,000
 Stock subscription deposit (Note 6)                            39,500
                                                          ------------
     Total Current Liabilities                                 364,462
                                                          ------------

TOTAL LIABILITIES                                              364,462
                                                          ------------

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, 6,816,475 shares issued
  and outstanding                                                6,816
 Additional paid-in capital                                  9,465,830
 Stock subscription receivable (Note 2)                       (434,000)
 Related party prepaid compensation contracts (Note 3)         (30,000)
 Deficit accumulated during the development stage           (8,301,567)
                                                          ------------
     Total Stockholders' Equity                                707,079
                                                          ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $  1,071,541
                                                          ============

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

<PAGE>
<PAGE> 23

                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                          Statements of Operations
<TABLE>
<CAPTION>

                                                                                       From
                                                                                    Inception on
                                                                                    January 30,
                                                          For the Years Ended       1995 Through
                                                                June 30,              June 30,
                                                          1999           1998           1999
                                                     ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
NET SALES                                            $     29,797   $     38,653    $     82,956

COST OF SALES                                              41,244         93,810         146,475
                                                     ------------   ------------    ------------
GROSS MARGIN                                              (11,447)       (55,157)        (63,519)
                                                     ------------   ------------    ------------

EXPENSES
 Consulting                                               109,167        148,853         742,812
 Payroll and payroll taxes                                680,344      1,118,073       2,572,764
 Depreciation and amortization                            213,804        147,247         587,626
 Bad debt expense                                            -              -             21,112
 Selling, general and administrative                      393,734        457,990       1,548,564
                                                     ------------   ------------    ------------
    Total Expenses                                      1,397,049      1,872,163       5,472,878
                                                     ------------   ------------    ------------
LOSS BEFORE OTHER INCOME (EXPENSE)                     (1,408,496)    (1,927,320)     (5,536,397)
                                                     ------------   ------------    ------------
OTHER INCOME (EXPENSES)
 Other income                                                -               967           2,298
 Interest income                                           34,460          6,170          70,051
 Interest expense                                        (200,480)      (343,397)       (619,889)
 Impairment loss (Note 1)                                    -        (1,694,111)     (1,694,111)
 Inventory impairment loss                                   -           (13,642)        (13,642)
 Loss on termination of employment agreement (Note 3)    (240,000)          -           (240,000)
 Loss on disposition of assets                               -              -             (3,662)
                                                     ------------   ------------    ------------
   Total Other Income (Expense)                          (406,020)    (2,044,013)     (2,498,955)
                                                     ------------   ------------    ------------
NET LOSS BEFORE DISCONTINUED OPERATIONS              $ (1,814,516)  $ (3,971,333)   $ (8,035,352)
                                                     ============   ============    ============
DISCONTINUED OPERATIONS
 Loss from discontinued operations (Note 10)             (193,723)      (296,496)       (495,108)
 Gain from disposal of subsidiary (Note 1)                228,893           -            228,893
                                                     ------------   ------------    ------------
   Net Discontinued Operations                             35,170       (296,496)       (266,215)
                                                     ------------   ------------    ------------
NET LOSS                                             $ (1,779,346)  $ (4,267,829)   $ (8,301,567)
                                                     ------------   ------------    ------------
OTHER COMPREHENSIVE INCOME
 Foreign currency adjustments                              (3,172)           188            -
                                                     ------------   ------------    ------------
NET COMPREHENSIVE LOSS                               $ (1,782,518)  $ (4,267,641)   $ (8,301,567)
                                                     ============   ============    ============
BASIC GAIN (LOSS) PER SHARE
 Loss from operations                                $      (0.32)  $      (1.12)
 Discontinued operations                                     0.01          (0.08)
                                                     ------------   ------------
   Basic Gain (Loss) Per Share                       $      (0.31)  $      (1.20)
                                                     ============   ============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING           5,701,524      3,555,799
                                                     ============   ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE> 24
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                     Statements of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                                         Related       Deficit
                                                                                          Party      Accumulated
                                                  Additional     Other        Stock      Prepaid     During the
                               Common Stock         Paid-in  Comprehensive Subscription Compensation Development
                            Shares       Amount     Capital      Income     Receivable   Contracts     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 consolidated financial
statements.

<PAGE>
<PAGE> 25
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
               Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                         Related       Deficit
                                                                                          Party      Accumulated
                                                  Additional     Other        Stock      Prepaid     During the
                               Common Stock         Paid-in  Comprehensive Subscription Compensation Development
                            Shares       Amount     Capital      Income     Receivable   Contracts     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 consolidated financial
statements.

<PAGE>
<PAGE> 26
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                         Related       Deficit
                                                                                          Party      Accumulated
                                                  Additional     Other        Stock      Prepaid     During the
                               Common Stock         Paid-in  Comprehensive Subscription Compensation Development
                            Shares       Amount     Capital      Income     Receivable   Contracts     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 consolidated financial
statements.

<PAGE>
<PAGE> 27
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
               Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
                                                                                         Related       Deficit
                                                                                          Party      Accumulated
                                                  Additional     Other        Stock      Prepaid     During the
                               Common Stock         Paid-in  Comprehensive Subscription Compensation Development
                            Shares       Amount     Capital      Income     Receivable   Contracts     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 interst 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 consolidated financial
statements.

<PAGE>
<PAGE> 28
                          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,
                                                          1999           1998           1999
                                                     ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss                                             $ (1,779,346)   $(4,267,829)   $ (8,301,567)
 Adjustments to Reconcile Net Loss to
  Net Cash (Used) by Operating Activities:
    Depreciation and amortization                         213,804        147,247         587,626
    Bad debt expense                                         -              -             21,112
    Loss on disposition of assets                            -              -              3,662
    Impairment loss                                          -         1,694,111       1,694,111
    Inventory impairment loss                                -           140,712         140,712
    Gain on disposition of investment                    (228,893)          -           (228,893)
    Loss on termination of employment agreement           240,000           -            240,000
    Loss on discontinued operations                       193,723        296,496         495,108
    Common stock issued for services                       45,000        529,504         915,259
    Services provided in lieu of cash payment
     on subscriptions receivable                             -              -             75,000
    Common stock issued in lieu of interest                 6,738        492,781         499,519
    Interest on subscription receivable                    34,000           -             34,000
  Changes in Assets and Liabilities:
     (Increase) decrease in accounts receivable and
       accounts receivable- related                         9,276         (4,631)        (22,674)
     (Increase) decrease in inventory                     (10,964)        (8,507)        (40,313)
     (Increase) decrease in prepaid expenses              465,913        (48,399)        326,194
     (Increase) decrease in other assets                  (21,875)       (27,160)        (78,271)
     Increase (decrease) in accounts payable and
      accrued expenses                                    134,290        141,253          27,158
                                                     ------------   ------------    ------------
  Net Cash (Used) by Operating Activities                (698,334)    (1,041,492)     (3,739,327)
                                                     ------------   ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of equipment                                    (92,697)      (357,005)     (1,441,750)
 Purchase of subsidiary                                      -              -           (400,000)
                                                     ------------   ------------    ------------
  Net Cash (Used) in Investing Activities            $    (92,697)  $   (357,005)   $ (1,841,750)
                                                     ------------   ------------    ------------
</TABLE>

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

<PAGE>
<PAGE> 29
                          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,
                                                          1999           1998           1999
                                                     ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:

 Repurchase of common stock                          $       -      $   (230,000)   $   (439,862)
 Receipt of subscriptions receivable                         -            50,000          50,000
 Payment of stock offering costs                             -              -           (160,401)
 Proceeds from notes payable                              163,500      1,382,500       2,298,838
 Cash received on stock deposit                            39,500           -             39,500
 Payments made on notes payable and line of credit       (125,000)       (30,380)       (429,838)
 Payments made to related parties                            -           (10,000)        (10,000)
 Common stock issued for cash                             437,500         13,750       4,236,131
                                                     ------------   ------------    ------------
     Net Cash Provided by Financing Activities            515,500      1,175,870       5,584,368
                                                     ------------   ------------    ------------

NET INCREASE (DECREASE) IN CASH                          (275,531)      (222,627)          3,291

CASH AND CASH EQUIVALENTS AT BEGINNING
 OF YEAR                                                  278,822        501,449            -
                                                     ------------   ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR             $      3,291   $    278,822    $      3,291
                                                     ============   ============    ============

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

  CASH PAID FOR:
     Interest                                        $     24,165   $      8,466    $     80,203
     Income taxes                                    $       -      $       -       $       -

NON-CASH FINANCING ACTIVITIES

 Common stock issued for services rendered           $     45,000   $    529,504    $    915,259
 Common stock issued in lieu of debt and interest    $  1,186,738   $    892,781    $  2,241,519
 Common stock issued for acquisition of subsidiary   $       -      $       -       $  1,550,000
 Common stock issued as prepaid salary               $       -      $    610,000    $    610,000


</TABLE>

During the year ended June 30, 1998, the Company issued 200,000 shares of
common stock at $2.00 per share in exchange for notes receivable.


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

<PAGE>
<PAGE> 30
                              AMERICAN TIRE CORPORATION
                            (A DEVELOPMENT STAGE COMPANY)
                          Notes to the Financial Statements
                                  June 30, 1999

NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Organization

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
Ravenna, Ohio.

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 was
valued at its trading price of $7.75 per share.

UL was incorporated under the laws of England and Wales on October 8, 1990 for
the purpose of promoting and developing products within the chemical industry.
Since 1990, UL has been a distributor of urethane bicycle, wheelchair and
other specialty tires in the United Kingdom and Europe.  UL distributed
urethane tires under the registered trade name "Urathon" in approximately 540
retail outlets in England, Scotland and Wales.  UL also sold product in
France, Denmark, Austria, the Netherlands and Germany through independent
distributors.

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

b.  Accounting Method

The Company's consolidated 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 computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
consolidated financial statements. Common stock equivalents, consisting of
stock options, have not been included in the calculation as their effect is
antidilutive for the periods presented.


<PAGE>
<PAGE> 31

                            AMERICAN TIRE CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                 June 30, 1999

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 managements 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.  Provision for Taxes

As of June 30, 1999, the Company has net operating loss carry forwards of
approximately $8,300,000 which will expire in 2014.  No tax benefit has been
reported in the financial statements because the potential tax benefits of the
net operating loss carryforwards are offset by a valuation allowance of the
same amount.

g.  Inventory

Inventory is stated at the lower of cost (computed on a first-in, first-out
basis) or market.  The inventory consists of 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

Depreciation expenses for the years ended June 30, 1999 and 1998 was $213,804
and $147,247, respectively.

i.  Revenue Recognition

Revenue is recognized upon shipment of goods to the customer.

<PAGE>
<PAGE> 32

                             AMERICAN TIRE CORPORATION
                           (A Development Stage Company)
                         Notes to the Financial Statements
                                   June 30, 1999

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

j.  Goodwill and Technology

Goodwill and technology 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.

The Company periodically reviews goodwill and technology for impairment by
comparing undiscounted projected income over the remaining amortization period
to the unamortized balance of goodwill and technology.

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.

k.  Patents

Patents have been capitalized at June 30, 1999. With regard to those patents
that the Company has capitalized cost through June 30, 1999, no amortization
has been recorded for the years ended June 30, 1999 and 1998, as they are
still pending.

l.  Advertising

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

NOTE 2 -  STOCK SUBSCRIPTION RECEIVABLE

During the year ended June 30, 1998, a former 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, 1999, the entire $400,000, plus
accrued interest of $34,000, 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 is due in five equal annual installments beginning June 30, 1999,
with payment in full no later than June 30, 2003.  The officer was
subsequently terminated in July 1999. Management of the Company is currently
working on negotiations with the former officer to collect the entire $400,000
plus interest or to cancel the shares. The first installment due of $80,000 on
June 30, 1999 has not been paid. Management is uncertain at June 30, 1999 what
the outcome will be.

NOTE 3 -   RELATED PARTY TRANSACTIONS

In August 1995, the Company entered into employment agreements with two of its
officers.  These two agreements are 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 consists 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
<PAGE> 33
                             AMERICAN TIRE CORPORATION
                           (A Development Stage Company)
                         Notes to the Financial Statements
                                   June 30, 1999

NOTE 3 - RELATED PARTY TRANSACTIONS (Continued)

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. The note bears
interest at 8.5% per annum and is due on or before December 30, 1999.

In October 1995, the Company entered into a Technology License Agreement with
a related party providing for a royalty of $0.25 to be paid for each tire sold
by the Company utilizing the "non-pneumatic tire technology" as defined by the
agreement.  This agreement was subsequently amended to reduce the royalty
payment from $0.25 per unit sold to $0.125 per unit sold.  The royalty
payments are to be paid quarterly. There was no production during the year
ended June 30, 1999 that was subject to the royalty.

As of June 30, 1999, $80,507 was owed to a former officer of the Company. The
amount is unsecured, due on demand and accrues interest at 8.5% per annum.

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 to be paid in twenty
equal consecutive monthly payments.

As of June 30, 1999, salary in the amount of $30,000 had been prepaid to an
officer of the Company through the issuance of stock.  The amount will be
amortized as the salary expense is incurred for this individual.  The amount
is broken out as follows:

  1.  75,000 shares were issued to the Company's CEO in lieu of salary from
July 1, 1998 to October 1, 1999.  These shares were recorded at the average
trading price of the stock of $2.00 on the date of issuance resulting in a
prepaid amount of $150,000. Amortization through June 30, 1999 was $120,000,
resulting in a prepaid amount of $30,000 as of June 30, 1999.

  2.  180,000 shares were issued to the Company's 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 is being written off during the year ended June 30, 1999 as a
"loss on termination of employment agreement".

The total prepaid amount of $30,000 has been presented as a reduction of
stockholders' equity (related party prepaid compensation contracts) as of June
30, 1999.



<PAGE> 34
                             AMERICAN TIRE CORPORATION
                           (A Development Stage Company)
                         Notes to the Financial Statements
                                   June 30, 1999

NOTE 4 -  COMMITMENTS AND CONTINGENCIES

The Company maintains an executive office suite in Boulder City, Nevada which
is currently provided to the Company at a rent charge of $425 per month.

On June 5, 1995, the Company entered into a Technology License Agreement with
a related party.  This agreement provides the Company the exclusive license to
use, sell and license the technology for manufacturing a wheel-tire assembly
known as the "Dynamic Steerable Spring."  The agreement originally specified
that a royalty of either $1.00 per unit sold directly by the Company or eight
percent of any royalty the Company should receive from any third party
licensee to be paid quarterly.  The agreement was superceded on August 19,
1997.  The terms of the Agreement were amended to reduce the royalty payment
from $1.00 per unit sold to $0.50 per unit sold.  In addition, a separate
Technology License Agreement relating to the "non-pneumatic tire technology"
was amended to reduce the royalty payment from $0.25 per unit sold to $0.125
per unit sold (see Note 3).  All royalty payments are to be paid quarterly.

On June 10, 1999, the Company entered into a Television Commercial Agreement
with American Independent Network (AIN). The Company has agreed to pay $30,000
($15,000 of which was paid prior to June 30, 1999) for the production of a
thirty-minute commercial program. In addition, the Company has agreed to pay
AIN $15.00 per bicycle sold through television advertising and $3.00 per wheel
assembly sold. The agreement is for one year with the option to extend the
agreement and continue airing the commercial spots on the Network at the same
prices as set forth above.

NOTE 5 -  STOCK TRANSACTIONS

Pursuant to a recission offer and agreement, the Company repurchased and
canceled 34,977 shares of its outstanding common stock at $6.00 per share
during the year ended June 30, 1997.

During the year ended June 30, 1997, the Company completed a public offering
of 344,083 shares of common stock at $6.00 per share for total proceeds of
$2,064,498.  The Company also completed a private placement during January
1997 of 155,000 shares at $6.00 per share for total proceeds of $930,000.

During the year ended June 30, 1997, the Company issued 27,000 shares of
common stock valued at $162,000 in lieu of outstanding debt.  The Company also
issued 15,000 shares of common stock valued at $91,875 for services rendered,
and 15,000 shares valued at $119,880 pursuant to a management agreement (Note
4).

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.
<PAGE>
<PAGE> 35
                             AMERICAN TIRE CORPORATION
                           (A Development Stage Company)
                         Notes to the Financial Statements
                                   June 30, 1999

NOTE 5 - STOCK TRANSACTIONS (Continued)

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.

NOTE 6 - STOCK SUBSCRIPTION DEPOSIT

As of June 30, 1999, the Company had received a total of $39,500 for the
purchase of 79,000 shares of common stock. Subsequent to June 30, 1999, 40,000
of the shares were issued. As of the date of our audit report, the remaining
39,000 shares had not been issued. The $39,500 is being shown as a stock
subscription deposit at June 30, 1999.

NOTE 7 -  STOCK OPTIONS OUTSTANDING

The Company's Board of Directors has authorized a Non-Qualified Stock Option
Plan that allows for the Company to issue options to purchase up to 35,000
shares of the Company's common stock that may be issued to consultants or
others that provide professional services to the Company.  The  stock options
have been valued at fair market value according to FAS 123, "Accounting for
Stock-Based Compensation."  Stock option activity for the year ended June 30,
1999 consisted of the following:
                                                            Number
                                                           Of Shares
                                                         ------------
             Outstanding at June 30, 1998                      14,500
             Granted during the year                             -
             Expired during the year                          (14,500)
             Exercised during the year                           -
                                                         ------------
             Outstanding at June 30, 1999                        -
                                                         ============

NOTE 8 -  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 $8,301,567 at June 30, 1999 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 rely
upon additional equity financing if required to sustain operations until
revenues are adequate to cover the costs.



<PAGE> 36
                         AMERICAN TIRE CORPORATION
                       (A Development Stage Company)
                     Notes to the Financial Statements
                                June 30, 1999

NOTE 9 - SUBSEQUENT EVENTS

  1.  During July 1999, the Company entered into a service contract with
McWong International Business, Inc., a related party. The Company has agreed
to pay $2,500 per month for twelve months in exchange for McWong providing
quality control personnel at the Shaughai Forever Bicycle Co., Ltd. facility
and to supervise the shipping of up to 10,000 bicycles per month to the
Company's factory. The agreement also calls for the Company to pay an
additional $0.25 per bicycle for each bicycle shipped over 10,000 per month.

  2.  During July 1999, the Company terminated its President and Chief
Operating Officer as previously mentioned.

  3.  During July 1999, the Company signed a three year employment agreement
with a new Chief Executive Officer. The agreement requires the Company to pay
a base salary of $100,000. The amount is to be paid in combination of cash and
shares of common stock based upon the market value of the stock at the time of
issuance.

The Company also granted non-qualified stock options to purchase 100,000
shares of the Company's common stock at $0.50 per share, exercisable for five
years, to the new Chief Executive Officer.

  4.  During July 1999, the Company entered into a share purchase agreement
with a related party to purchase 1,000,000 shares of the Company's common
stock at $0.50 per share. The agreement calls for the individual to make
payment in the form of proceeds received from the sale of common stock of
Lexico Resources International Corporation, until such time as the Company
receives $500,000.

  5.  The Company issued 10,622 shares of common stock for services valued at
$12,500 and 1,168,000 shares of common stock for $584,000.


<PAGE>
<PAGE> 37
                          AMERICAN TIRE CORPORATION
                        (A Development Stage Company)
                      Notes to the Financial Statements
                                June 30, 1999

NOTE 10 - LOSS FROM DISCONTINUED OPERATIONS

Effective June 9, 1999, the Company sold its 100% ownership in Urathon Limited
(UL) for one pound sterling. The following is a summary of the loss from
discontinued operations.

<TABLE>
<CAPTION>

                                                                                      From
                                                                                    Inception on
                                                                                     January 30,
                                                          For the Years Ended       1995 Through
                                                                June 30,              June 30,
                                                          1999           1998           1999
                                                     ------------   ------------    ------------
<S>                                                  <C>            <C>             <C>
NET SALES                                            $    327,851   $    334,594    $    717,457

COST OF SALES                                             281,110        173,064         490,635
                                                     ------------   ------------    ------------
GROSS MARGIN                                               46,741        161,530         226,822
                                                     ------------   ------------    ------------

EXPENSES

 Payroll and payroll taxes                                 75,080        111,819         186,899
 Depreciation and amortization                             25,197          6,113          33,597
 Bad debt expense                                           3,949         13,721          17,670
 Selling, general and administrative                      126,097        191,472         393,487
                                                     ------------   ------------    ------------
    Total Expenses                                        230,323        323,125         631,653
                                                     ------------   ------------    ------------
LOSS BEFORE OTHER INCOME (EXPENSE)                       (183,582)      (161,595)       (404,831)
                                                     ------------   ------------    ------------
OTHER INCOME (EXPENSES)
 Other income                                                -              -             54,765
 Loss on disposition of assets                               -            (1,722)         (1,722)
 Inventory impairment loss                                   -          (127,070)       (127,070)
 Interest expense                                         (10,141)        (6,109)        (16,250)
                                                     ------------   ------------    ------------
   Total Other Income (Expense)                            10,141       (134,901)        (90,277)
                                                     ------------   ------------    ------------
NET LOSS FROM DISCONTINUED OPERATIONS                $   (193,723)  $   (296,496)   $   (495,108)
                                                     ============   ============    ============
</TABLE>