Prototype polyurethane car tires developed by Amerityre Corp. have passed the minimum federal tire test requirements for pneumatic tires.
That's an achievement the company's top executive called crossing the ``first credibility threshold'' in the firm's pursuit of commercializing its technology.
Amerityre said recently its polyurethane (PU) tire met all the minimum performance criteria under Federal Motor Vehicle Safety Standard (FMVSS) No. 109, applicable to new pneumatic tires. The standard, due to be replaced in three years, specifies tire dimensions and laboratory testing requirements for bead unseating resistance, strength, endurance and high-speed performance; defines tire load ratings; and specifies labeling requirements for passenger tires.
Richard Steinke, Amerityre president and CEO, said in a statement that two conclusions can be drawn from the test results. First, the PU compound used in the tires had a running temperature measurably lower than rubber and, second, the firm's manufacturing process ``really simplifies the way tires can be made.''
An unnamed independent laboratory performed the testing, although several shareholders previously said they were told the tires were submitted to Smithers Scientific Services Inc. in Akron.
Mr. Steinke acknowledged Amerityre still must do additional testing to show the tires can meet the more stringent performance parameters under FMVSS 139, the new federal standard that takes effect in June 2007. ``However, passing the current standards shows our technology works, and we are confident the new standards will be met as well,'' Mr. Steinke said.
The firm estimated in its 10-Q filing for the second fiscal quarter with the Securities and Exchange Commission it would have to spend about $250,000 during the January-June 2004 period for continuing research and development on the project. This is in addition to issuing 100,000 shares of restricted common stock, valued at $378,000, for prepaid services related to a one-year consulting agreement for services associated with the development of the car tire.
Amerityre said the tires-known as Arcus-are based on its ``air, no-air'' tire system and can operate inflated or at zero pressure. The Boulder City-based company has applied for a U.S. patent for the tire and also has other patents used as part of the development, including one that was approved in January for a run-flat tire with an elastomeric inner support.
Development of a PU automotive tire is something long worked on in the tire industry, and many have questioned whether Amerityre can ever succeed in developing a product that will come to market. The firm itself has said it doesn't have the infrastructure to take the tire to market but will look at the best way to commercialize the technology-be it through a partnership, joint development or licensing agreement.
``We are at the point now where we can open discussions,'' said David Martin, Amerityre vice president of sales and marketing. ``I'm not sure we can close them yet, but at least we can begin.''
Besides the tire's ability to run at lower temperatures, Mr. Martin said the firm sees potential cost advantages because of the simplicity of the manufacturing process. ``We think it lends itself well to automation,'' he said.
The company had worked with Goodyear from 2001 through March 2003 when the joint development agreement lapsed. Amerityre then took back the project, with Goodyear allowing Rick Vannan, who retired in October 2002 from Goodyear as director of advanced product and process technology, to work as a consultant with Amerityre without violating any non-compete clauses in his retirement.
Mr. Martin also wanted to credit the perseverance of Mr. Steinke, who has been attacked by many in the industry for the performance of a number of companies with which he has been involved. ``He's been attacked from every side and kept his blinders on,'' Mr. Martin said. ``He continued right where he knew he was headed.''
Mr. Martin said business has improved for Amerityre's PU foam technology tires-used in bicycle, wheelchair and other similar tire applications-with the firm posting its best ever month in March. For the fiscal year ended June 30, 2003, it lost $3.09 million on sales of $1.04 million. The firm lost an additional $2.91 million for the nine months ended March 31, on sales of $1.03 million.
As a development company, Amerityre has accumulated losses of more than $23 million since its 1995 inception as American Tire Corp. During that time, Mr. Steinke has raised more than $23 million through investors, according to the company's financial statements.
In addition, former Goodyear engineer Thomas Oare has agreed to work with Amerityre on a consulting basis. He retired from Goodyear in 2001 after 29 years; among his specialties was work on run-flat tires.