AMERICAN TIRE CORP
10QSB, 1999-06-07
TIRES & INNER TUBES
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 .<PAGE> 1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549
                                FORM 10-QSB


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

For the quarterly period ended:  March 31, 1999

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

For the transition period from ____________________ to ____________________.

Commission file number:  33-94318-C


                          AMERICAN TIRE CORPORATION
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

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

705-B YUCCA STREET, BOULDER CITY, NEVADA                       44266
- -----------------------------------------                 -------------------
(Address of principal executive offices)                      (Zip Code)

                                (702) 293-1930
             ----------------------------------------------------
             (Registrant's telephone number, including area code)

                                NOT APPLICABLE
- ------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)

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

 The number of shares outstanding of each of the issuer's classes of common
stock, was 6,344,500 shares of common stock, par value $0.001, as of March 31,
1999.


<PAGE>
<PAGE> 2

                       PART I - FINANCIAL INFORMATION

                       ITEM 1.  FINANCIAL STATEMENTS


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

     The unaudited consolidated balance sheet of the Company as of March 31,
1999, the related audited consolidated balance sheet of the Company as of June
30, 1998; the related unaudited consolidated statements of operations and cash
flows for the three and nine month periods ended March 31,1999 and 1998 and
from January 30, 1995 (inception) through March 31, 1999; and the unaudited
consolidated statement of stockholders' equity for the period from January 30,
1995 (inception) through March 31, 1999 are attached here to and incorporated
herein by this reference.

     Operating results for the nine months periods ended March 31, 1999 is not
necessarily indicative of the results that can be expected for the Company's
fiscal year ending June 30, 1999.

<PAGE>
<PAGE> 3

                   AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                         Consolidated Balance Sheet

                                    ASSETS
                                    ------
                                                    March 31,      June 30,
                                                      1999           1998
                                                  ------------   ------------
                                                  (Unaudited)
CURRENT ASSETS

 Cash and cash equivalents                        $     58,374   $    278,822
 Accounts receivable                                   222,483         89,463
 Accounts receivable - related party                         -          3,971
 Inventory                                             124,790        138,852
 Prepaid expenses                                       26,795        173,052
                                                  ------------   ------------

     Total Current Assets                              432,442        684,160
                                                  ------------   ------------
PROPERTY AND EQUIPMENT

 Land                                                   59,000         59,000
 Building and improvements                             296,741        291,010
 Equipment and vehicles                              1,080,591        995,138
 Furniture and fixtures                                 38,083         39,124
   Less: accumulated depreciation                     (461,776)      (301,686)
                                                  ------------   ------------

     Total Property and Equipment                    1,012,639      1,082,586
                                                  ------------   ------------

OTHER ASSETS:

 Patents                                                59,582         55,542
 Deposits                                                  854            854
                                                  ------------   ------------

     Total Other Assets                                 60,436        56,396
                                                  ------------   ------------


     TOTAL ASSETS                                 $  1,505,517   $  1,823,142
                                                  ============   ============


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

<PAGE>
<PAGE> 4

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

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------

                                                    March 31,      June 30,
                                                      1999           1998
                                                  ------------   ------------
                                                   (Unaudited)
CURRENT LIABILITIES

 Accounts payable                                 $    593,250   $    345,278
 Accounts payable - related parties                     89,600          5,600
 Accrued expenses                                       42,916         17,072
 Line of credit                                              -         25,000
 Notes Payable                                          26,000      1,122,500
                                                  ------------   ------------
     Total Current Liabilities                         751,766      1,515,450
                                                  ------------   ------------

TOTAL LIABILITIES                                      751,766      1,515,450
                                                  ------------   ------------

COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY:

 Preferred stock, par value $0.001,
   5,000,000 shares authorized, 0 shares
   issued and outstanding                                    -              -
 Common stock, par value $0.001, 25,000,000
   shares authorized, 6,344,500 and 4,619,250
   shares issued and outstanding, respectively           6,345          4,619
 Additional paid-in capital                          9,317,814      7,798,789
 Stock subscription receivable                        (400,000)      (400,000)
 Related party prepaid compensation contracts         (330,000)      (576,667)
 Other comprehensive income                              9,537          3,172
 Deficit accumulated during the development stage   (7,849,945)    (6,522,221)
                                                  ------------   ------------
     Total Stockholders' Equity                        753,751        307,692
                                                  ------------   ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $  1,505,517   $  1,823,142
                                                  ============   ============

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

<PAGE>
<PAGE> 5

                   AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                     Consolidated Statements of Operations
                                 (Unaudited)
<TABLE>
<CAPTION>
                                                                                                       From
                                        For the        For the        For the         For the      Inception on
                                     Three Months    Three Months    Nine Months    Nine Months     January 30,
                                         Ended          Ended           Ended          Ended       1995 Through
                                       March 31,       March 31,       March 31,     March 31,       March 31,
                                          1999           1998           1999            1998            1999
                                      ------------   ------------    ------------   ------------   ------------
<S>                                   <C>            <C>             <C>            <C>            <C>
NET SALES                             $     34,548   $     93,686   $     281,846   $    314,845   $    724,611

COST OF SALES                               21,552         59,552         188,230        221,754        502,986
                                      ------------   ------------    ------------   ------------   ------------
GROSS MARGIN                                12,996         34,134          93,616         93,091        221,625
                                      ------------   ------------    ------------   ------------   ------------

EXPENSES

 Consulting                                 46,667         19,980          96,667         88,020        730,312
 Payroll and payroll taxes                 160,110        201,877         585,976        563,793      2,590,215
 Depreciation and amortization              54,040        131,422         161,882        384,076        544,104
 Bad debt expense                             -              -               -              -            34,833
 Selling, general and administrative        96,906        186,233         405,740        482,387      1,826,994
                                      ------------   ------------    ------------   ------------   ------------
    Total Expenses                         357,723        539,512       1,250,265      1,518,276      5,726,458
                                      ------------   ------------    ------------   ------------   ------------
INCOME BEFORE OTHER INCOME (EXPENSE)      (344,727)      (505,378)     (1,156,649)    (1,425,185)    (5,504,833)
                                      ------------   ------------    ------------   ------------   ------------
OTHER INCOME (EXPENSES)
 Other income                                 (496)          -             17,114            442         73,210
 Interest income                               839          2,205           3,012          5,176         38,603
 Interest expense                           (4,536)      (161,267)       (191,201)      (217,362)      (616,718)
 Impairment loss                              -              -               -              -        (1,694,111)
 Inventory impairment loss                    -              -               -              -          (140,712)
 Loss on disposition of assets                -              -               -            (2,898)        (5,384)
                                      ------------   ------------     -----------    -----------    -----------
   Total Other Income (Expense)             (4,193)      (159,062)       (171,075)      (214,642)    (2,345,112)
                                      ------------   ------------    ------------   ------------   ------------
NET LOSS                              $   (348,920)  $   (664,440)   $ (1,327,724)  $ (1,639,827)  $ (7,849,945)
                                      ------------   ------------    ------------   ------------   ------------
OTHER COMPREHENSIVE INCOME
 Foreign currency adjustments                  975           -              6,365           -             9,537
                                      ------------   ------------    ------------   ------------   ------------

NET COMPREHENSIVE LOSS                $   (347,945)  $   (664,440)   $ (1,321,359)  $ (1,639,827)  $ (7,840,408)
                                      ============   ============    ============   ============   ============
NET LOSS PER SHARE                    $      (0.09)  $      (0.20)   $      (0.25)  $      (0.43)
                                      ============   ============    ============   ============

WEIGHTED AVERAGE NUMBER OF SHARES        3,995,556      3,394,415       5,369,433      3,798,326
                                      ============   ============    ============   ============

</TABLE>

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


<PAGE>
<PAGE> 6
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
               Consolidated 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> 7
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
         Consolidated 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> 8
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
         Consolidated 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        (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> 9
                     AMERICAN TIRE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
           Consolidated 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 in lieu
 of interest on promissory
 notes at $3.00 per share
 (Unaudited)                    1,250           2       3,749         -           -           -            -

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

Common stock issued for cash
 at $0.50 per share           529,000         529     351,471         -           -           -            -

Common stock issued for
 services at $0.50 per share   60,000          60      29,940         -           -           -            -

Currency translation
 adjustment (unaudited)          -           -           -           6,365        -           -            -

Amortization of prepaid
 compensation contracts
 (unaudited)                     -           -           -            -           -        246,667         -

Net loss for the 9 months
 ended March 31, 1999
 (unaudited)                     -           -           -            -           -           -      (1,327,724)
                          ----------- ----------- -----------  -----------  ----------  ----------  -----------
Balance at March 31,
 1999 (unaudited)           6,344,500 $     6,345 $ 9,317,814  $     9,537  $ (400,000)$  (330,000) $(7,849,945)
                          ----------- ----------- -----------  ----------   ----------  ----------  -----------


</TABLE>

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

<PAGE>
<PAGE> 10
                    AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                                       From
                                         For the      For the         For the        For the       Inception on
                                       Three Months  Three Months   Nine Months     Nine Months    January 30,
                                         Ended         Ended           Ended           Ended       1995 Through
                                        March 31,     March 31,      March 31,       March 31,      March 31,
                                          1999           1998           1999           1998           1999
                                      ------------   ------------    ------------   ------------   ------------
<S>                                   <C>            <C>             <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss                              $   (348,920)  $   (664,440)  $ (1,327,724)   $ (1,639,827)  $ (7,849,945)
 Adjustments to Reconcile Net Loss to
  Net Cash (Used) by Operating
   Activities:
    Depreciation and amortization           54,040        131,422        161,882         384,076        544,104
    Bad debt expense                          -              -              -               -            34,833
    Loss on disposition of assets             -              -              -              2,898          5,384
    Impairment loss                           -              -              -               -         1,694,111
    Inventory impairment loss                 -              -              -               -           140,712
    Common stock issued for services        30,000           -            30,000          13,750        900,259
    Services provided in lieu of cash
     payment on subscriptions
     receivable                               -              -              -               -            75,000
    Common stock issued in lieu of
     interest                                 -           173,890          3,750         335,765        496,531
  Changes in Assets and Liabilities:
     (Increase) decrease in accounts
      receivable and accounts
      receivable- related                  (24,010)        (9,837)       (129,049)       (25,924)      (247,323)
     (Increase) decrease in inventory       13,193          7,881          14,062         20,436       (265,502)
     (Increase) decrease in prepaid
      expenses                              78,973         (9,527)        395,366        (72,849)       255,647
     (Increase) decrease in other assets    (4,040)          -             (4,040)       (18,539)        62,493
     Increase (decrease) in accounts
      payable and accrued expenses         (18,346)       (89,960)        273,816        120,108        525,166
     Increase (decrease in accounts
      payable related parties               42,000         84,356          84,000         15,688         89,600
                                      ------------   ------------    ------------   ------------   ------------
  Net Cash (Used) by Operating
   Activities                             (177,110)      (376,215)       (497,937)      (864,418)    (3,538,930)
                                      ------------   ------------    ------------   ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of property and equipment         (1,987)      (124,539)        (88,011)      (223,303)    (1,437,064)
 Purchase of subsidiary                       -              -               -              -          (400,000)
                                      ------------   ------------    ------------   ------------   ------------
  Net Cash (Used) in Investing
   Activities                         $     (1,987)  $   (124,539)   $    (88,011)  $  (223,303)   $ (1,837,064)
                                      ------------   ------------    ------------   ------------   ------------
</TABLE>




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

<PAGE>
<PAGE> 11

                   AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
              Consolidated Statements of Cash Flows (Continued)
                                 (Unaudited)
<TABLE>
<CAPTION>


                                                                                                       From
                                         For the      For the         For the        For the       Inception on
                                       Three Months  Three Months   Nine Months     Nine Months    January 30,
                                         Ended         Ended           Ended           Ended       1995 Through
                                        March 31,     March 31,      March 31,       March 31,      March 31,
                                          1999           1998           1999           1998           1999
                                      ------------   ------------    ------------   ------------   ------------
<S>                                   <C>            <C>             <C>            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES:

 Receipt of subscriptions receivable  $       -      $       -      $       -       $     50,000    $    50,000
 Repurchase of common stock                   -              -              -           (230,000)      (439,862)
 Payment of stock offering costs              -              -              -               -          (160,401)
 Proceeds from notes payable and line
  of credit                                   -           612,864        157,500       1,064,819      2,392,838
 Payments made on notes payable and
  line of credit                           (74,000)          -           (99,000)           -          (503,838)
 Payments made to related parties             -              -              -               -           (10,000)
 Common stock issued for cash              307,000           -           307,000            -         4,105,631
                                      ------------   ------------    ------------   ------------   ------------
     Net Cash Provided (Used) by
      Financing Activities                 233,000        612,864        365,500         884,819      5,434,368
                                      ------------   ------------    ------------   ------------   ------------

NET INCREASE (DECREASE) IN CASH             53,903        112,110       (220,448)       (202,902)       58,374

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                         4,471        186,437        278,822         501,449          -
                                      ------------   ------------    ------------   ------------   ------------

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                            $     58,374   $    298,547    $    58,374    $    298,547   $     58,374
                                      ============   ============    ============   ============   ============

SUPPLEMENTAL SCHEDULE OF CASH FLOW
 ACTIVITIES

  CASH PAID FOR:
     Interest                         $       -      $      1,028    $       -      $      5,919   $     56,449
     Income taxes                     $       -      $       -       $       -      $       -      $       -

NON-CASH FINANCING ACTIVITIES

 Common stock issued for services
  rendered                            $     30,000   $       -       $       -      $     13,750   $    900,259
 Common stock issued in lieu of debt
  and interest                        $     57,500   $       -       $       -      $       -      $  2,234,781
 Common stock issued for acquisition
  of subsidiary                       $       -      $       -       $       -      $       -      $  1,550,000
 Common stock issued as prepaid
  salary                              $       -      $       -       $       -      $       -      $    610,000
</TABLE>






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


<PAGE> 12
                    AMERICAN TIRE CORPORATION AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)
             Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 1999

NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Organization

The consolidated financial statements include those of American Tire
Corporation (ATC) and its wholly-owned subsidiary, Urathon Limited (UL)
(formerly UTI Chemicals (Europe) Limited). Collectively, they are referred to
herein as "the Company".

ATC 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 is engaged in the manufacturing, marketing,
distribution, and sales of "flatfree" specialty tires from its manufacturing
facility located in Ravenna, Ohio.

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. The Company's cash account
at its bank is insured by the FDIC up to $100,000. The account balance was not
in excess of the insured limits at March 31, 1999.

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.

e.  Principles of Consolidation

The March 31, 1999 consolidated financial statements include those of American
Tire Corporation and its wholly-owned subsidiary, Urathon Limited.  All
significant intercompany accounts and transactions have been eliminated.

For the Company's foreign subsidiary (UL), the functional currency has been
determined to be the local currency.  Accordingly, assets and liabilities are
translated at the period-end exchange rates, and operating statement items are
translated at average exchange rates prevailing during the period.  The
resultant cumulative translation adjustments to the assets and liabilities are
recorded as a separate component of stockholders' equity.  Exchange
adjustments resulting from foreign currency transactions are included in the
determination of net income (loss).  Such amounts are immaterial for all
periods presented.
<PAGE>
<PAGE> 13
                 AMERICAN TIRE CORPORATION AND SUBSIDIARY
                       (A Development Stage Company)
           Notes to the Unaudited Consolidated Financial Statements
                              March 31, 1999

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

In accordance with Statement of Financial Accounting Standards No. 95
"Statement of Cash Flows," cash flows from the Company's foreign subsidiary
are calculated based upon the local currencies.  As a result, amounts related
to assets and liabilities reported on the consolidated statements of cash
flows will not necessarily agree with changes in the corresponding balances on
the balance sheets.

f.  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.

g.  Provision for Taxes

As of March 31, 1999, the Company has net operating loss carry forwards of
approximately $7,600,000 that will expire in 2013.  No tax benefit has been
reported in the consolidated financial statements because the potential tax
benefits of the net operating loss carry forwards are offset by a valuation
allowance of the same amount.

h.  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.

i.  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 and vehicles        5 to 7 years
                  Furniture and fixtures        7 years

Depreciation expenses for the quarter ended March 31, 1999 and 1998 was
$54,040 and $131,422, respectively.

j.  Revenue Recognition

Revenue is recognized upon shipment of goods to the customer.


<PAGE>
<PAGE> 14
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
           Notes to the Unaudited Consolidated Financial Statements
                                March 31, 1999

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

k.  Concentrations of Risk

Foreign Currency Translation
- ----------------------------

Since UL is a foreign company whose financial statements must be translated
into U.S. Dollars to conform with the requirements of the Securities and
Exchange Commission, major changes in the currency exchange rate between Pound
Sterling and U.S. Dollars may have a significant impact on operations of the
Company.  Although the Company does not anticipate the currency exchange rate
to be significantly different over the 12 months, no such assurances can be
given.

Accounts Receivable
- -------------------

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

l.  Patents

Patents and related technology have been capitalized at March 31, 1999.  The
patents are still pending and no amortization of the costs has been recorded
for the quarter ended March 31, 1999.

m.  Change in Accounting Principle

The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income" during the year ended June 30, 1998.
SFAS No. 130 established standards for reporting and display of comprehensive
income (loss) and its components (revenues, expenses, gains and losses) in a
full set of general purpose financial statements.  This statement requires
that an enterprise classify items of other comprehensive income by their
nature in a financial statement and display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a balance sheet.  SFAS No. 130 is effective
for fiscal years beginning after December 15, 1997.  The Company has
retroactively applied the provisions of this new standard by showing the other
comprehensive income (loss) for all periods presented.

n.  Advertising

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

<PAGE>
<PAGE> 15
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
            Notes to the Unaudited Consolidated Financial Statements
                                March 31, 1999

NOTE 2 -  STOCK SUBSCRIPTION RECEIVABLE

During the year ended June 30, 1998, an officer of the Company signed an
agreement and note to purchase 200,000 shares of the Company's common stock at
a price of $2.00 per share.  At March 31, 1999, the $400,000 owed under a
note, has been presented as a reduction of stockholders' equity.

NOTE 3 -   RELATED PARTY TRANSACTIONS

As of March 31, 1999, $89,600 was owed to certain related entities. These
amounts are unsecured and due on demand.

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. At March 31, 1999, the $70,000 owed on
this account is included in the accounts payable.

As of June 30, 1998, salary and management fees in the amount of $576,667 had
been prepaid to officers and consultants of the Company through the issuance
of stock.  The amount will be amortized as the salary and consulting expenses
are incurred for these individuals.  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 March 31, 1999 was $90,000,
resulting in a prepaid amount of $60,000 as of March 31, 1999.

     2.  50,000 shares were issued as a management fee for services to be
rendered from March 1, 1998 to February 28, 1999.  These shares were recorded
at the average trading price of the stock of $2.00 on the date of issuance,
resulting in an initial prepaid expense of $100,000.  Amortization through
March 31, 1999 was $100,000, resulting in a prepaid amount of $-0- as of March
31, 1999.

     3.  180,000 shares were issued to the Company's 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 initial prepaid expense of $360,000.  Amortization through March 31,
1999 was $90,000, resulting in a prepaid amount of $270,000 as of March 31,
1999.

The total prepaid amount of $330,000 has been presented as a reduction of
stockholders' equity (related party prepaid compensation contracts) as of
March 31, 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.
<PAGE> 16
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
          Notes to the Unaudited Consolidated Financial Statements
                               March 31, 1999

NOTE 5 -  LINE OF CREDIT

The Company has a line of credit with a bank.  The loan is secured and accrues
interest at a variable rate of approximately 12% per annum.  The balance
outstanding on the line of credit at March 31, 1999 was $-0-.

NOTE 6 -  NOTES PAYABLE

During the year ended June 30, 1998, the Company entered into various
promissory notes payable for a total of $1,122,500. As part of the original
note agreements, prepaid interest was to be paid on each note in the form of
shares of the Company's common stock.  The shares were recorded at a total
value of $492,781 (effective interest rate of approximately 65%). During the
quarter ended September 30, 1998, the Company entered into a promissory note
payable for the amount of $12,500. As part of the original note agreement,
prepaid interest was to be paid on the note in the form of shares of the
Company's common stock.  The shares were recorded at a value of $3,750
(effective interest rate of approximately 60.0%)

Amortization of the interest through March 31, 1999 was $155,622 resulting in
prepaid interest of $-0- as of March 31, 1999.

Notes having maturity dates ranging from January 1, 1999 to March 31, 1999
amounting to $12,500 were presented for payment. The Company elected, under
the terms of the note payable, to issue 12,500 shares of common stock at the
rate of one share for each $1.00 of note.

During the quarter ended September 30, 1998 the Company entered into a
promissory note with an unrelated third party.  The note terms include an
additional payment of $12,500 due at the due date November 18, 1998(effective
interest rate of approximately 75%). Interest rate of 12% applies to all
principal if not paid at maturity.

The entire amount of these notes is considered to be a current liability as of
March 31, 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 quarter ended March
31, 1999 consisted of the following:
                                                           Number
                                                          Of Shares
                                                         ------------
             Outstanding at December 31, 1998                  14,500
             Granted during the quarter                          -
             Exercised during the quarter                     (  -   )
                                                         ------------
             Outstanding at March 31, 1999                     14,500
                                                         ============


<PAGE> 17
                  AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
          Notes to the Unaudited Consolidated Financial Statements
                               March 31, 1999

NOTE 7 -  STOCK OPTIONS OUTSTANDING (Continued)

The 14,500 stock options outstanding at March 31, 1999 are summarized as
follows:

      Date         Number of     Exercise      Expiration
    Issued         Options        Price           Date
    ------        ---------      --------      ----------
 May 31, 1997       14,500        $2.00       May 31, 1999




<PAGE>
<PAGE>  18
               ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-looking Statements
- ---------------------------------------------------------

     This report may contain "forward-looking" statements.  The Company is
including this cautionary statement for the express purpose of availing itself
of the protections of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995 with respect to all such 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 not completed
its assessment, but currently believes that costs of addressing this issue
will not have a material adverse impact on the Company's financial position.
However, if the Company and third parties upon which it relies are unable to
address this issue in a timely manner, it could result in a material financial
risk to the Company.  In order to assure that this does not occur, the Company
plans to devote all resources required to resolve any significant year 2000
issues in a timely manner.

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

     The Company manufactures the flat-free tires utilizing single and/or
multiple head, centrifugal molding machines.  These machines centrifugally
mold elastomer products, such as the bicycle tires, 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's revenues are generated primarily by its business operations
in the United States. However in February 1997, the Company acquired all of
the capital stock of its current subsidiary Urathon Limited. For the nine
month periods ended March 31, 1999 and 1998, the functional currency for the
Company's foreign subsidiary (Urathon Limited) has been determined to be the
British Pound Sterling.  Assets and liabilities have been translated at period
end exchange rates and operating statement items are translated at average
exchange rates prevailing during the period.  For the nine month periods ended
March 31, 1999 and 1998, the Company had a gain of $6,365 and $-0-,
respectively, as a result of foreign currency translation adjustments.
<PAGE> 19

Nine Month Period ended March 31, 1999 compared to March 31, 1998
- ----------------------------------------------------------------------

     Total revenues for the nine month period ended March 31, 1999 was
$281,846 compared to $314,845 for the same period in 1998. Costs of sales for
the nine month period ended March 31, 1998 were $188,230, or 66.8% of sales as
compared to $221,754, or 70.4% of sales for the same period in 1998.  The
decrease in the cost of sales as a percent of sales for 1999 compared to 1998
is attributable to efficiencies developed in the Company's manufacturing
process during the period.  The decrease in the Company's sales during the
nine month period in 1999 compared to 1998 can be attributed to the Company's
limited financial resources and lack of any working capital to enhance
promotion and sales of its products. Other the lack of working capital, 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
operations.

     Corporate Expense.  For the nine month period ended March 31, 1999, total
operating expenses were $1,250,265, consisting of mainly of payroll and
payroll taxes of $585,976, depreciation and amortization of $161,882,
consulting of $99,667, and selling, general and administrative expenses of
$405,740, resulting in a loss from operations of $(1,156,649).  Total
operating expenses for the same period ended March 31, 1998 were $1,518,276,
mainly consisting of payroll and payroll taxes of $563,793, consulting of
$88,020, depreciation and amortization of $384,076, and selling, general and
administrative expenses of $482,387, resulting in a loss from operations of
$(1,425,185).  Corporate expenses during the nine month period ended March 31,
1999, were approximately $268,011 less than corporate expenses for the same
nine month period ending March 31, 1998.  The most significant portion of the
reduction in corporate expenses was reflected in a decrease in depreciation
and amortization and selling, general, and administrative expenses over the
reporting period.

     Interest Expense.  Interest expense for the nine month period ended March
31, 1999 was $191,201 compared to $217,362 for the same period in 1998.  The
slight decrease in interest expense for the period in 1999 is directly
attributed to a reduction in the issuance of convertible promissory notes and
other borrowing during the period.

     The Company experienced a net comprehensive loss of $(1,312,359) for the
nine month period ended March 31, 1999 compared to a loss of $(1,639,827) for
the same period in 1998. The basic loss per share for the nine-month period
ending March 31, 1999 was $(0.25) and $(0.43) for the same period ended March
31, 1998, based on the weighted average number of shares outstanding of
5,369,433 and 3,798,326, respectively.

Liquidity and Capital Resources
- -------------------------------

     During the nine month period ended March 31, 1999, the Company (a) issued
1,250 shares of its common stock to note holders in lieu of interest on
convertible promissory notes at approximately $3.00 per share for a value of
$3,751; (b) issued 1,135,000 shares of common stock to the holders of the
convertible promissory notes on conversion of $1,135,000 of such notes at a
conversion price of $1.00 per share; (c) sold 529,000 shares of its common
stock for cash of $352,000, at a price of $0.50 per share; and (d) issued
60,000 shares of common stock for consulting services valued at a price of
$0.50 per share.
<PAGE> 20

     At March 31, 1999, the Company had current assets of $432,442 and current
liabilities of $751,766, for a working capital deficit of $(319,324). At March
31, 1999, the Company had cash and cash equivalents of $58,374 and accounts
receivable of $222,483. Net cash used in operations from the nine months ended
March 31, 1999 was $497,937 compared to $864,418 for the same period in 1998.
Cash used in operations for the nine month period ending March 31, 1999 was
funded primarily by cash received from the sale of convertible promissory
notes and common stock for cash.

     At March 31, 1999, the Company had net property and equipment of
$1,012,639, after deduction of $461,776 in accumulated depreciation. The
Company's property and equipment consists mainly of land ($59,000), building
and improvements ($296,741), and equipment ($1,080,723). At March 31, 1999,
the Company has an accumulated deficit during the development stage of
$(7,849,945), has a working capital deficit and limited internal financial
resources. The report of the Company's auditor for its fiscal year ended June
30, 1998, contains a going concern modification as to the ability of the
Company to continue.  During the nine month period ending March 31, 1999, the
Company has implemented measures to reduce cash outflows and increase working
capital through the issuance of additional shares of common stock for cash,
services and the 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, 1999.  Due to the need for working capital for both the Company and its
subsidiary Urathon Limited, the Company intends to seek additional debt and/or
equity financing from existing shareholders and other investment capital
resources.  The Company has no commitments for any additional debt or equity
financing at this time and no assurance can be given that the Company will be
able to obtain any such 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,
1999.

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 quarter 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.

                           PART II - OTHER INFORMATION

                            ITEM 1.  LEGAL PROCEEDINGS

     None.

<PAGE> 21
                          ITEM 2.  CHANGES IN SECURITIES

     None.

                     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

                            ITEM 5.  OTHER INFORMATION

     None.

            ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS.

EXHIBIT
  NO.           DESCRIPTION
- -------         -----------

  27            Financial Data Schedule

(b)  REPORTS ON FORM 8-K.

     None.


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         AMERICAN TIRE CORPORATION
                                         [Registrant]



Dated: June 7, 1999                      /S/DAVID K. GRIFFITHS
                                         -----------------------------------
                                         Principal Accounting Officer

<TABLE> <S> <C>

<ARTICLE> 5

<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          JUN-30-1999
<PERIOD-END>                               MAR-31-1999
<CASH>                                          58,374
<SECURITIES>                                         0
<RECEIVABLES>                                  222,483
<ALLOWANCES>                                         0
<INVENTORY>                                    124,790
<CURRENT-ASSETS>                               432,442
<PP&E>                                       1,474,415
<DEPRECIATION>                                 461,776
<TOTAL-ASSETS>                               1,505,517
<CURRENT-LIABILITIES>                          751,766
<BONDS>                                              0
                                0
                                          0
<COMMON>                                     9,324,159
<OTHER-SE>                                 (8,570,408)
<TOTAL-LIABILITY-AND-EQUITY>                 1,505,517
<SALES>                                        281,846
<TOTAL-REVENUES>                               281,846
<CGS>                                          188,230
<TOTAL-COSTS>                                1,250,265
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             191,201
<INCOME-PRETAX>                            (1,327,724)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                        6,365
<NET-INCOME>                               (1,321,359)
<EPS-BASIC>                                     (0.25)
<EPS-DILUTED>                                   (0.25)


</TABLE>



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