SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 18, 2006
AMERITYRE CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA | 000-50053 | 87-0535207 |
(State or other jurisdiction | (Commission File Number) | (IRS Employer ID No.) |
of incorporation) |
1501 Industrial Road, Boulder City, Nevada 89005
(Address of principal executive office)
Registrant's telephone number, including area code: (702) 294-2689
Copies to:
John C. Thompson, Esq.
John C. Thompson, LLC
1371 East 2100 South, #202
Salt Lake City, Utah 84105
Phone: (801) 363-4854
Fax: (801) 606-2855
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS.
On April 18, 2006, the Company determined that its previously issued financial statements for the quarters ended September 30, 2005 and December 31, 2005, should no longer be relied upon because of an error in such financial statements.
RESTATEMENT FOR THE FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2005
Although the Company disclosed in its Form 10-KSB for the year ended June 30, 2005, that it was adopting Statement of Financial Accounting Standard No. 123 (revised 2004) “Share-Based Payment,” (“SFAS 123(R)”) for the first quarter of 2006, the Company incorrectly determined that SFAS was not applicable to its financial statement presentation until January 1, 2006, instead of July 1, 2005 (the first day of the Company’s fiscal year 2006). The Company has restated its financial statements to correctly reflect the adoption of SFAS 123(R) as of July 1, 2005. SFAS 123(R) requires the measurement and recognition of compensation expense for all stock based awards made to employees and directors based on estimated fair value.
During the period ended September 30, 2005, we issued options to acquire an aggregate of 625,000 shares of our common stock to certain employees in connection with their employment (the “Employment Options”). The Employment Options vest annually over a period of one to three years based on the employees continued employment by the Company. The exercise price for the Employment Options is $6.60 per share. The 625,000 options issued to the employees were issued at or above the market price of our common stock on the date of grant. However, the compensation cost for the issuance of the options has been determined based on fair market value at the grant dates consistent with the method of SFAS 123(R). The effect of the restatement includes an increase of $144,764 in selling, general and administrative costs, thereby increasing net loss for the period to $1,211,253, or a loss of $0.06 per share, as indicated below:
As Reported for the three month period ended September 30, 2005 | Restatement Adjustment | As Restated | |
Net Sales | $ 435,969 | $ - | $ 435,969 |
Cost of Sales | 354,343 | - | 354,343 |
Gross Profit | 81,626 | - | 81,626 |
Expenses | |||
Consulting | - | - | - |
Advisory Group Expense | - | - | - |
Payroll & Payroll Taxes | 490,347 | - | 490,347 |
Depreciation & Amortization | 89,256 | - | 89,256 |
Research & Development | 236,382 | - | 236,382 |
Bad Debt Expense | - | - | - |
Selling General & Administrative | 350,486 | 144,764 | 495,250 |
Total Expenses | 1,166,471 | 144,764 | 1,311,235 |
Loss From Operations | (1,084,845) | (144,764) | (1,229,609) |
Other Income | |||
Interest Income | 17,304 | - | 17,304 |
Other Income | 1,052 | - | 1,052 |
Total Other Income | 18,356 | - | 18,356 |
Net Loss | $ (1,066,489) | $ (144,764) | $ (1,211,253) |
Basic and Fully Diluted Loss Per Share | $ (0.05) | $ (0.01) | $ (0.06) |
Weighted Average Number Shares Outstanding | 19,715,806 | - | 19,715,806 |
RESTATEMENT FOR THE FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2005
The Company has also restated its financial statements for the three and six month periods ended December 31, 2005 to reflect the adoption of SFAS 123(R) as of July 1, 2005.
During the three and six month periods ended December 31, 2005, we issued options to acquire an aggregate of 625,000 shares and 150,000 shares of our common stock, respectively, to certain employees in connection with their employment (the “Employment Options”). The Employment Options vest annually over a period of one to three years based on the employees continued employment by the Company. The exercise prices for the Employment Options are $6.60 and $5.36 per share, respectively. The options issued to the employees were issued at or above the market price of our common stock on the date of grant. However, the compensation cost for the issuance of the options has been determined based on fair market value at the grant dates consistent with the method of SFAS 123(R). The effect of the restatement includes an increase of $173,136 and $317,900 in selling, general and administrative costs for the three and six month periods ending December 31, 2005, respectively , thereby increasing net loss for the respectively periods to $1,332,465 and $2,543,718, or a loss of $0.07 and $0.13 per share, as indicated below:
As Reported for the three month period ended December 31, 2005 | Restatement Adjustment | As Restated | As Reported For the six month period ended December 31, 2005 | Restatement Adjustment | As Restated | |
Net Sales | $ 302,255 | $ - | $ 302,255 | $ 738,224 | $ - | $ 738,224 |
Cost of Sales | 258,439 | - | 258,439 | 612,781 | - | 612,781 |
Gross Profit | 43,816 | - | 43,816 | 125,443 | - | 125,443 |
Expenses | ||||||
Consulting | 99,498 | - | 99,498 | 99,498 | - | 99,498 |
Advisory Group Expense | - | - | - | - | - | - |
Payroll & Payroll Taxes | 519,060 | - | 519,060 | 1,009,407 | - | 1,009,407 |
Depreciation & Amortization | 91,873 | - | 91,873 | 181,129 | - | 181,129 |
Research & Development | 151,825 | - | 151,825 | 388,208 | - | 388,208 |
Bad Debt Expense | 211 | - | 211 | 211 | - | 211 |
Selling General & Administrative | 348,336 | 173,136 | 521,472 | 698,822 | 317,900 | 1,016,722 |
Total Expenses | 1,210,803 | 173,136 | 1,383,939 | 2,377,275 | 317,900 | 2,695,175 |
Loss From Operations | (1,166,987) | (173,136) | (1,340,123) | (2,251,832) | (317,900) | (2,569,732) |
Other Income | ||||||
Interest Income | 7,649 | - | 7,649 | 24,953 | - | 24,953 |
Other Income | 9 | - | 9 | 1,061 | - | 1,061 |
Total Other Income | 7,658 | - | 7,658 | 26,014 | - | 26,014 |
Net Loss | $(1,159,329) | $ (173,136) | $(1,332,465) | $(2,225,818) | $ (317,900) | $(2,543,718) |
Basic and Fully Diluted Loss Per Share | $ (0.06) | $ (0.01) | $ (0.07) | $ (0.11) | $ (0.02) | $ (0.13) |
Weighted Average Number Shares Outstanding | 20,038,287 | - | 20,038,287 | 19,877,047 | - | 19,877,047 |
The chairman of the Company’s audit committee, the Chief Financial Officer, and the Executive Vice-president have discussed the matters disclosed in this filing with the Company’s independent accountant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.
Dated April 24, 2006
AMERITYRE CORPORATION
By: /S/ Elliott N. Taylor
Elliott N. Taylor
Executive Vice-President