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Articles 

Amerityre Corp. Reports Operating Results (10-Q)

February 14, 2011 | About:

Amerityre Corp. (AMTY) filed Quarterly Report for the period ended 2010-12-31.

Amerityre Corp has a market cap of $8.65 million; its shares were traded at around $0 with and P/S ratio of 2.34.

Highlight of Business Operations:

Net Loss. For the three month period ended December 31, 2010, we had a net loss of $195,765 compared to a net loss of $457,138 for the same period in 2009. Bad debt expense increased $51,620 compared to the same period in 2009 as a result of our decision to adopt a conservative accounting approach to our outstanding receivables of uncertain collectability. We are confident we will collect on the past due invoices however the decision was made to reclass the receivable to bad debt espense in accordance with our trade receivable policy. Offsetting this increase during the current period, we realized a gain of $110,000 from a debt settlement with a former employee. Our net loss for the three month period ended December 31, 2010 decreased by $261,373 as compared with the same period in 2009, due primarily to our cost cutting efforts and improvements in gross margin on foam product sales.

Net revenues. We had net revenues of $1,726,987 for the six month period ended December 31, 2010, a 9% decrease over net revenues of $1,890,073 for the six month period ended December 31, 2009. Our net sales decreased as compared with 2009 because we had no equipment sales for the 2010 period and anticipated revenues for our solid forklift tires have been delayed due to continued field testing. $1,726,987 in sales of our closed-cell polyurethane foam products accounted for 100% of our net revenues for the six month period ended December 31, 2010. $1,709,073 in sales of our closed-cell polyurethane foam products and $181,000 in equipment sales accounted for approximately 90% and 10%, respectively, of our net revenues for the six month period ended December 31, 2009. However, the $1,726,987 of foam product revenues represents a 1% increase compared to $1,709,073 for the same period in 2009.

Net Loss. For the six month period ended December 31, 2010 we had a net loss of $498,778 compared to a net loss of $737,194 for the same period in 2009. Bad debt expense increased $51,620 compared to the same period in 2009 as a result of our decision to adopt a conservative accounting approach to our outstanding receivables of uncertain collectability. We are confident we will collect on the past due invoices however the decision was made to reclass the receivable to bad debt espense in accordance with our trade receivable policy. Offsetting this increase during the current period, we realized a gain of $110,000 from a debt settlement with a former employee. Our net loss for the six month period ended December 31, 2010 decreased by $238,416 as compared with the same period in 2009, due primarily to the increase in product sales and the decrease in SG&A expenses as a result of our cost cutting efforts.

Non-cash items include depreciation and amortization and stock based compensation. Our net loss was $498,778 for the six months ended December 31, 2010 compared to a net loss of $737,194 for the same period in 2009. Net loss for the six month period ended December 31, 2010 included non-cash expenses of $25,555 for stock-based compensation related to employee stock options, $29,000 issued as bonus compensation and $60,680 for stock issued/accrued for services. Net loss for the six month period ended December 31, 2009 included non-cash expenses of $37,437 for stock-based compensation related to employee stock options, $63,000 issued as bonus compensation and $55,000 for stock issued for services.

Net Cash Used In Investing Activities. Net cash used by investing activities was $55,882 for the six month period ended December 31, 2010 and $57,186 for the same period in 2009. Our primary uses of investing cash for the six month period ended December 31, 2010 was $55,882 for the purchase of property and equipment, offset by $6,000 in proceeds from the sale of property and equipment. Our primary uses of investing cash for the six month period ended December 31, 2009 were $9,660 related to patents and trademarks and $47,526 for property and equipment..

Net Cash Provided by Financing Activities. During the six months ended December 31, 2010, we closed a private placement of secured convertible promissory notes (the Notes). We sold an aggregate of $755,800 in Notes. The Notes are for a term of one year with simple interest of 6%. The Notes are convertible at the holders option to our common stock at a conversion rate of $0.35 per share. If the holder elects such conversion, for each two shares in the conversion, the holder shall also receive one warrant to purchase an additional share, exercisable at $0.60 per share for an exercise period of 2 years from the date of conversion. In connection with the private placement of secured convertible promissory notes, we issued 142,856 shares of restricted common stock as finders' fees. During the six months ended December 31, 2009, we completed the private placement of our securities at a price of $0.21 per share. We sold an aggregate of 2,416,664 shares of our common stock and received net proceeds of $507,500 in a private placement. We also received an aggregate loan of $150,000 under a credit agreement with a partnership. The members of the partnership elected to immediately convert the funds loaned into stock per the credit agreement and, accordingly, we issued an aggregate of 714,285 shares of our common stock in full satisfaction of the loan.

Read the The complete Report

About the author:

10qk
Charlie Tian, Ph.D., is the founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 3.2/5 (6 votes)

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