Amerityre and Ace Products Agree Licensing Deal

Amerityre Corporation. Richard Steinke, president and CEO of Amerityre Corporation, today announced that Amerityre has entered into a non-binding memorandum of understanding with Ace Products, LLC, for a proposed transaction involving the licensing of certain technology and the sale of certain manufacturing equipment and inventory.

The memorandum of understanding expects the execution of definitive agreements by 16 September 2005. Under the proposed terms, Amerityre intends to provide a license to Ace for the manufacture and sale of low-duty non-highway-use tyres. Amerityre also proposes to sell to Ace certain equipment for the manufacture of such tires, as well as existing inventory of Amerityre’s closed-cell polyurethane Flatfree ™ tyre products. The license is expected to include provisions for Amerityre to supply chemicals to Ace for the manufacture of designated tire products during the license term. The transaction is further conditioned on Ace’s satisfactory completion of due diligence and receipt of acceptable acquisition financing.

Mr Steinke commented: “Ace Products has a commanding presence in key domestic markets, including agriculture, outdoor product equipment and mobility sectors. We believe that this license provides Ace with an excellent opportunity to expand domestic markets for its products by manufacturing and selling tires utilizing Amerityre’s proprietary technology. This proposed license arrangement is in keeping with Amerityre’s overall business strategy, and signifies validation of one of its core competencies, its closed-cell low-duty foam product technology.”

Jeff Krajacic, President of Ace Products commented, “The addition of the Amerityre product offering helps to expand ACE’s product portfolio to better serve our customers and new markets. ACE continues to expand its portfolio of products and services so that we may become a one-stop shop whereby we can fulfil all of our customers plastic and rubber needs far beyond just wheels and tires. This arrangement will help ACE become a preferred supplier to a broader customer base.”

Ace Products, LLC, headquartered in Newport, Tennessee, has three full-service manufacturing facilities that provide manufacturers with a full line of semi-pneumatic rubber tyres, solid rubber tyres and plastic wheel assemblies for light-duty and heavy-duty applications.