<PAGE> 1
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-KSB
(Mark One)
  [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT OF 1934 

     For the fiscal year ended       June 30, 1997
                                     -------------
  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from ________ to __________

            Commission File Number          33-94318-C      
                                            ---------- 
AMERICAN TIRE CORPORATION
--------------------------
(Exact name of registrant as specified in charter)

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

1643 Nevada Highway, Boulder City, Nevada                  89005     
-------------------------------------------              ----------
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number, including area code (702)  293-1930      
                                               ---------------
Securities registered pursuant to section 12(b) of the Act:

Title of each class       Name of each exchange on which registered
        None                                  N/A  
------------------        -----------------------------------------

Securities registered pursuant to section 12(g) of the Act:
                                   None                
                             ---------------
                             (Title of class)

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

  Check if disclosure of delinquent filers in response to Item 405 of 
Regulation S-B is not contained in this form, and no disclosure will be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-KSB or any amendment to this Form 10-KSB.    [X]

  State issuer's revenues for its most recent fiscal year:  $69,518
                                                            -------

<PAGE> 2

  State the aggregate market value of the voting stock held by nonaffiliates 
computed by reference to the price at which the stock was sold, or the average 
bid and asked prices of such stock, as of a specified date within the past 60 
days: 

     Based on the average bid and asked prices of the common stock at November 
12 1997, of $4.625 share, the market value of shares held by nonaffiliates 
would be $7,798,897.

  As of November 13, 1997, the Registrant had 3,297,248 shares of common stock 
issued and outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and 
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the 
document is incorporated:  (1) Any annual report to security holders; (2) Any 
proxy or other information statement; and (3) Any prospectus filed pursuant to 
rule 424(b) or (c) under the Securities Act of 1933:  NONE

PAGE
<PAGE> 3

                                    PART I.

                       ITEM 1. DESCRIPTION OF BUSINESS

Business in General
-------------------

     American Tire Corporation, a Nevada corporation (the "Company"), was 
organized on January 30, 1995, to take advantage of existing proprietary and 
non-proprietary technology available for the manufacturing of flat-free 
specialty tires. The Company has had limited operations since its organization 
and is a "development stage" company.  However, the Company believes that the 
experience and intellectual contributions of its management and other 
employees are key components to the future success of the Company. (See ITEM 
9. DIRECTORS AND EXECUTIVE OFFICERS.)

     The Company has spent extensive time analyzing the tire industry, its 
perceived major competitors, potential markets, and its own strengths and 
weaknesses.  The Company believes that the tire industry is dominated by 
several large competitors, has competitive pressures from cheaper imported 
tires from the Pacific Rim, and maintains a commitment to the traditional 
pneumatic tire with innovations focusing on tread design not tire design.  The 
Company also feels that the tire industry can be divided into several segments 
each with its own dynamics, dominant companies, target customers, and 
competitive pressures. The Company believes that its technology will allow it 
to produce flat-free tires that offer the same safety and ride as the 
traditional pneumatic tire, at competitive prices, without the associated 
problems resulting from a flat tire.  The ability to avoid down time from flat 
tires will be particularly appealing to industrial concerns where down time 
can be readily equated into lost dollars.

     The Company feels its strengths are in its technology and research and 
development capabilities.  Its weaknesses are in its size and financial 
capabilities and in changing Original Equipment Manufacturer ("OEM") attitudes 
and consumer views on pneumatic tires versus the advantages of a flat-free 
tire. Based on this analysis of the tire industry, a two-pronged approach has 
been formulated by the Company's management to manufacture and market its 
flat-free tires concept.

     First, the Company has identified certain industry segments where it 
feels the cost of the tires, the consumer, and the competition will allow it 
to compete effectively against existing pneumatic tires and the companies that 
produce them.  These industry segments are segments the Company believes will 
be accessible, its products will be readily acceptable, and the Company will 
not be at an insurmountable competitive disadvantage.  A few of these areas 
are the bicycle tire, wheelchair tire and lawn and garden product tire markets 
where almost all tires are currently imported.

     Second, in industry segments where the Company feels it will not 
initially have the financial or manufacturing resources to compete 
effectively, the Company will seek an industry partner to manufacture and 
market  tires products developed from the Company's technology.  The Company 
will, therefore, have a very fluid organization that will not be bound to the 
traditional role as strictly a manufacturer and marketer of products, but 
instead, a company exploring the non-traditional avenues, including joint 
ventures for developing and licensing the Company's technology.  The Company 
feels that through these means, with respect to some products developed

<PAGE> 4

utilizing the Company's technology, the Company will be able to attain broader 
public recognition without incurring the additional equipment and related 
costs and expenses associated with being strictly a manufacturer and marketer. 
With respect to products developed through joint ventures and license 
agreements, the Company will maintain a profit interest by having a royalty or 
other carried interest in every unit of production sold through such 
arrangements based on gross sales price.

      Hayes Development and License Agreement

     In September 1995, the Company and Hayes Wheels International ("Hayes") 
entered into a Development and License Agreement (the "Hayes Development and 
License Agreement") wherein the Company and Hayes have agreed to jointly 
develop a prototype tire-wheel assembly utilizing the DSS Technology, together 
with associated molds and equipment, for submission to the United States 
Department of Transportation ("DOT") for DOT's approval under FMVSS 129. FMVSS 
129 is the applicable U.S. safety standard for non-pneumatic tires used on 
passenger vehicles and describes the energy cycle a non-pneumatic tire/wheel 
must absorb to be provided for commercial sale in the United States. The 
Company has received notice from the United States Office of Patents and 
Trademarks that the patent application relating to the DSS Technology contains 
allowable subject matter and the Company expects the patent to be issued in 
the very near future.


     Non-Pneumatic or "Flat-Free" Tire Technology

     Flat-free tire technology differs from pneumatic tires in that pneumatic 
tires are made from rubber and require an inner tube which is inflated with 
air, while the Company's low density foam tires are manufactured from 
polyurethane, have no inner tube (solid throughout), and do not require 
inflation.  In addition, the Company's shell elastomer tires have no inner 
tube, are hollow throughout and do not require inflation, but rely on the 
infrastructure of the tire to maintain the tires stability. The flat-free tire 
is mounted on the wheel rim in much the same way a pneumatic tire is mounted, 
with the assistance of a tire lever.  The flat-free tires are approximately 
the same weight as pneumatic tires and tubes and ride characteristics are 
comparable. Apart from cleaning, the Company's bicycle tires are maintenance 
free and eliminate tedious puncture repair or the need for a bicycle pump.  
The flat-free tires are designed  for use by  "On/Off" road and "Highway" 
bicycles.

     The Company's marketing strategy will be to initially introduce the 
flat-free tires through sales to OEMs, tire distributors and direct 
advertising to consumers through television commercials. The Company intends 
to target three main segments of the tire market:

     (1)  Original Equipment Manufacturers.  By selling to OEMs, the Company 
believes it will be able to develop product identification and consumer demand 
by emphasizing "Made in the USA," the "flat-free,"  and "maintenance-free," 
characteristics of the tires while relying on the efforts of OEMs in marketing 
their products with the Company's tires.

     (2)     Tire Distributors.  By selling to tire distributors, the Company 
believes it will be able to take advantage of existing distribution channels 
for moving its tires into the aftermarket, while emphasizing the uniqueness of 
the flat-free and maintenance free characteristics of the tires versus 
traditional pneumatic tires.
<PAGE> 5

     (2)  Direct Advertising.  In April 1995, the Company entered into a 
television commercial agreement with American Independent Network of Ft. 
Worth, Texas ("AIN"), to air a commercial (the "Commercial") produced by the 
Company for a one year period beginning as soon as airless bicycle tires are 
available for shipment.  AIN covers approximately 150 stations, in 75 markets, 
covering 34,668,949 households.  AIN will air the Commercial at times selected 
by it and the Company at time slots between 6:00 AM and 12:00 Midnight on an 
average of once an hour, with particular emphasis placed during the airing of 
afternoon children's programs, news reports, and sports programming.  The 
total program will give the Company approximately 10 airings per day during 
the one year term.  The Company has established an 800 telephone number that 
will allow customers to call the Company to make purchases direct from the 
Company utilizing a credit card.  The Company has agreed to pay AIN a 
commission of $2.00 for each bicycle tire sold by the Company resulting from 
direct advertising effort.  The Company has not made any substantive studies 
to determine the degree of market penetration it can reasonably expect to 
obtain from the airing of the Commercial, nor has it established an exact date 
to begin airing the Commercial.

Competition
-----------

     Currently, there are three tire manufacturers that utilize a liquid phase 
technology manufacturing process to produce non-pneumatic tires from a low 
density polyurethane foam (Green Tire, Norwich, UK; Woo Tire, Waihai, China; 
and Krypton-India, Calcutta, India), and very limited numbers of their tires 
have been marketed  in the United States.  The technology that these companies 
use to manufacture their tires was originally developed by Vincent Panaroni, 
who has in the past provided consulting services to the Company, and the 
co-inventor of the Company's flat-free tire technology.

     The Company knows of no companies that currently offer a flat-free or 
non-pneumatic tire made from a polyurethane shell elastomer. The Company's 
flat free tire technology differs from existing non-pneumatic tire technology 
in (1) the formulation of the polyurethane; (2) the manner in which the 
polyurethane is distributed throughout the mold; and (3) the use of a simple 
mechanical locking system that allows the tire to stay secure on the wheel. In 
addition to manufacturers of low density foam tires, the Company will be 
competing directly with firms that manufacture and market pneumatic bicycle 
tires.

     The Company estimates that over 98% of all domestic bicycle tire sales 
are pneumatic tires.  The bicycle tire  industry is highly competitive and 
there are several of the Company's competitors that have financial resources 
which substantially exceed those of the Company.  In addition, many 
competitors are large companies (i.e. Michelin [France], Kenda [Japan], and 
Chengshin Rubber [China]) that have established name recognition of their 
product, have established distribution networks for their products, and 
developed consumer loyalty to such products.  Principal factors in marketing 
the Company's tires will be that it is domestically produced with "flat-free" 
and "maintenance free" characteristics.  This may give the Company a 
competitive advantage against pneumatic tires produced by foreign 
manufacturers that are subject to puncture and loss of air.
PAGE
<PAGE> 6

Manufacturing, Supplies, and Quality Control
--------------------------------------------

     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 has acquired a 6-station and a 12-station carousel of 
centrifugal molding machines and the related pouring equipment that based on 
manufacturer's specifications should permit the Company to produce 
approximately 1,500,000 tires annually. At present, the Company has not 
accumulated a sufficient number of molds in the various tire sizes necessary 
to determine with any degree of consistency the maximum production efficiency 
of its production equipment.  The Company estimates that it could produce 
about 8 to 10 million tires per year without expansion from its Ravenna 
facility. At that level of production, the Company would require approximately 
150 employees as well as additional equipment.  The Company will train its 
employees in the use of this specialized manufacturing equipment and process, 
which will be utilized for other types of specialty tires as well.  The 
Company intends to utilize multiple suppliers to purchase polyurethane and 
believes that it will be able to obtain significant quantities of polyurethane 
and other chemicals without significant problems or delays.

     All products produced by the Company will be inspected following the 
manufacturing process and prior to shipment to ensure quality.  Products 
considered by the Company's quality control personnel to be defective could be 
ground into pellets, which can be melted and reused in the Company's 
manufacturing process to make new products and reduce waste of raw materials.

Patents
-------

     Dynamic Steerable Spring

     The Company is a party to a technology license agreement (the "DSS 
License Agreement") with Dennis S. Chrobak (a former affiliate of the Company) 
and Richard A. Steinke (an affiliate of the Company), to develop DSS 
Technology.  DSS Technology is a combination of a spring compressively loaded 
and a one piece spiral hoop load in tension.  DSS Technology can be utilized 
in tire-wheel assemblies for many types of mobile products including spare 
tires, passenger car tires, and light, medium, and heavy truck tires.  Mr. 
Chrobak and Mr. Steinke are the owners of the DSS Technology for which an 
application for United States Letters Patent has been filed and issuance of a 
patent is pending. The term of the DSS License Agreement will be for the life 
of the underlying U.S. patent when issued.  The Company is required to pay a 
royalty to Mr. Chrobak of $0.50 for each unit of production manufactured and 
sold directly by the Company.  At such time as Mr. Steinke is no longer an 
affiliate of the Company, Mr. Steinke would be entitled to a royalty on the 
same terms as Mr. Chrobak. (See ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED 
TRANSACTIONS.)

<PAGE> 7

     Non-Pneumatic Tire

     The Company is a party to a technology license agreement (the "Non-
Pneumatic Tire License Agreement") with Mr. Chrobak and Mr. Steinke, to 
develop certain technology relating to a low density foam tire for which an 
application for United States Letters Patent has been filed and a patent is 
pending.  The term of the Non-pneumatic Tire License Agreement will be for the 
life of the underlying U.S. patent when issued.  The Company is required to 
pay a royalty to Mr. Chrobak of $0.125 for each bicycle tire manufactured and 
sold by the Company utilizing the technology.  At such time as Mr. Steinke is 
no longer an affiliate of the Company, Mr. Steinke would be entitled to a 
royalty on the same terms as Mr. Chrobak.

     The Company has received notice from the United States Office of Patents 
and Trademarks that the patent application relating to the DSS Technology 
contains allowable subject matter and the Company expects the patent to be 
issued in the very near future. The Company has not yet received notice from 
the United States Patent Office passing on the patentability of the claims of 
the case with respect to the Non-Pneumatic Tire Technology.  The Company is 
unable to predict when any office action will be taken or a patent issued.  
Although a patent has a statutory presumption of validity in the United 
States, the issuance of a patent is not conclusive as to its validity, nor as 
to the enforcement scope of the claims contained therein.  The Company intends 
to, but has not as of the date of this report, applied for patent protection 
in other countries.  The Company intends to vigorously police its patents and 
there can be no assurance that its patents will not be infringed upon or 
modified by others.

     The Company has not retained intellectual property counsel to render an 
opinion regarding the DSS Technology and the Non-Pneumatic Tire Technology as 
to whether the Company is infringing on the intellectual property rights of 
others.  In that regard, the Company believes the DSS Technology is unique in 
that the Company knows of no other manufacturer of  airless passenger vehicle 
tires or tire-wheel assemblies.  With respect to the Non-Pneumatic Tire 
Technology, the Company believes that its technology substantially differs 
from the existing technology currently being utilized to produce non-pneumatic 
tires.  The Company believes that although its patents are important, such 
factors as product innovation, technical expertise and experience, and the 
confidentiality of proprietary data and trade secrets are equally as 
important.  The Company will attempt to preserve and protect its proprietary 
technology principally through trade secret protection and has obtained 
confidentiality/nondisclosure agreements with all of its employees.

Trademark
---------

     Through its wholly owned subsidiary UTI-UK, the Company owns the U.S. 
registered trademark "Urathon" which has been utilized by UTI-UK on urethane 
tire products distributed in the United Kingdom and Europe.

Regulation and Environmental Compliance
---------------------------------------

     The Company knows of no particular federal or state regulations 
applicable to its manufacturing processes.  Certain tire-wheel assemblies 
designed to be manufactured for use on passenger vehicles and light trucks are 
required to meet certain Department of Transportation, Federal Motor Vehicle 
Safety Standards ("FMVSS"), including FMVSS 129, which applies to non-
<PAGE> 8

pneumatic tires for passenger cars.  This standard specifies tire dimensions 
and laboratory tests requirements for lateral strength, endurance, and high 
speed performance, defines the tire load rating, and specifies labeling 
requirements for non-pneumatic spare tires.

     The Company is subject to various local, state, and federal laws and 
regulations including, without limitation, regulations promulgated by federal 
and state environmental and health agencies, the federal Occupational Safety 
and Health Administration, and laws pertaining to hiring, treatment, safety, 
and discharge of employees.  The Company's manufacturing operations must also 
meet federal, state, and local regulatory standards in the areas of labor, 
safety, and health. The Company believes that it will be able to operate in 
compliance with such regulations, including laws related to the handling and 
use of environmentally hazardous materials.

Employees
---------

     As of November 13, 1997, the Company had 14 full-time employees.  Except 
for Mr. Steinke, all of the Company's executive officers are employees at 
will.  (See ITEM 10. EXECUTIVE COMPENSATION.)  None of the Company's employees 
are represented by a labor union.  The Company believes that it will be able 
to hire a sufficient quantity of qualified laborers in the local area to meet 
the Company's employment needs.  The Company's manufacturing process does not 
require special training, other than orientation to the Company's production 
techniques and specific equipment. 

ITEM 2. DESCRIPTION OF PROPERTIES

Offices
-------

     The Company's 26,000 sq. ft. manufacturing/distribution/office facility 
is located on 4.15 acres of real property at 446 West Lake Street, Ravenna, 
Ohio, and consists of 1,000 sq. ft. of administrative offices and 25,000 sq. 
ft. of manufacturing space. The facility is constructed of masonry and steel 
and is equipped with a one-half ton chain hoist, overhead sprinkler system, 
and two loading docks. The Ravenna facility will be utilized for bicycle tire 
production and management of the Company believes that the Ravenna facility 
will be sufficient to handle projected  production needs for the next five 
years.  The Company maintains an executive office suite consisting of 
approximately 1,100 square feet located at 1643 Nevada Highway, Boulder City, 
Nevada, and is currently provided to the Company free of charge. It is the 
opinion of management that the Company maintains adequate insurance coverage 
for loss or damage to its facility under its existing insurance policy.

ITEM 3. LEGAL PROCEEDINGS

None.

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

     No matters were submitted to a vote of shareholders of the Company during 
the fourth quarter of the fiscal year ended June 30, 1997.

PAGE
<PAGE> 9
                                  PART II

     ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Lack of Prior Public Market and Possible Volatility of Stock Price
------------------------------------------------------------------

     The Company completed its initial public offering in October 1996. Prior 
to that time there was no "established trading market" for shares of the 
Company's common stock.  The table on the following page sets forth, for the 
respective periods indicated, the prices for the Company's common stock in the 
over-the-counter market as reported by  the NASD's OTC Bulletin Board.  The 
bid prices represent inter-dealer quotations, without adjustments for retail 
mark-ups, mark-downs or commissions and may not necessarily represent actual 
transactions.

                                              High Bid      Low Bid
                                              --------      -------
Fiscal Year Ended June 30, 1995
-------------------------------
First, Second, Third and Fourth Quarters        N/A           N/A

Fiscal Year Ended June 30, 1996
-------------------------------
First, Second, Third and Fourth Quarters        N/A           N/A

Fiscal Year Ending June 30, 1997
--------------------------------
First Quarter                                   N/A           N/A
Second Quarter                                 $9.375        $6.00
Third Quarter                                  $9.125        $6.00
Fourth Quarter                                 $6.125        $2.25

     At  November 12, 1997, the Company's Common Stock was quoted on the OTC 
Bulletin Board at a bid and asked price of $4.50 and $4.75, respectively.


     Since its inception, the Company has not paid any dividends on its Common 
Stock, and the Company does not anticipate that it will pay dividends in the 
foreseeable future. At November 13, 1997, the Company had approximately 220 
shareholders of record based on information provided by the Company's transfer 
agent.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operation
-----------------

     In October 1996 the Company completed an initial public offering of 
344,083 shares of Common Stock at a purchase price of $6.00 per share for 
gross offering proceeds of $2,064,498.  The Company has used the proceeds from 
the offering to initiate production of "flat-free" bicycle and other specialty 
tires which will compete with the traditional pneumatic tires (i.e., tires 
with an inner tube or tubeless tires inflated with air), repurchase the shares 
of Common Stock subject to the Recision Offer, repay loans from Officers, and 
for working capital.PAGE
<PAGE> 10

     The Company's production equipment consists of several "centrifugal 
molding machines" and other related specialized manufacturing equipment to 
produce tires. During the fiscal year ended June 30, 1997, the Company 
utilized $469,392 from its initial public offering to purchase additional 
molding machines and related production equipment, which has now been 
installed and is ready for production, subject to the completion of a 
sufficient quantity of production molds to produce those tires the Company 
intends to initially introduce into the market.

     The Company believes that its two-pronged approach for manufacturing and 
marketing its technology and products will be the most cost effective means 
for the Company to be successful. Because the Company is in the development 
stage, has had an operating loss since inception of $2,254,392, has limited 
working capital and limited internal financial resources the report of the 
Company's auditor contains a going concern modification as to the ability of 
the Company to continue.  The Company is currently operating at a loss of 
approximately $100,000 per month and expects operating expenses to continue at 
such rate until such time as the Company begins to receive substantial 
revenues from the sale of tires. 

     Since its inception on January 30, 1995 to June 30, 1997, the Company has 
expended $2,282,871 in expenses, consisting in large part of consulting fees 
($484,792), payroll and payroll taxes ($774,347) and selling, general and 
administrative expenses ($772,758), resulting in an operating loss of 
$2,254,392 since inception.

     As of June 30, 1997, the Company had not commenced the commercial sale of 
its products in any substantial quantities and substantially all sales revenue 
recognized during the fiscal year ended June 30, 1997 were attributed to the 
operations of UTI-UK.  As a result, the delays in selling its products have 
caused the Company's limited resources to be more depleted than originally 
anticipated and the Company has utilized substantially all of the proceeds of 
its initial public offering.

     During the fiscal year ended June 30, 1997, the Company effected measures 
to reduce cash outflows and increase working capital thru the issuance of 
additional shares of the Company's common stock.  On October 31, 1996, the 
Company approved the issuance of 27,000 shares of the Company's restricted 
common stock in exchange for the cancellation of approximately $56,735 in 
principal and accrued interest due certain of its officers and directors, plus 
additional compensation to such officers and directors of $105,265, for a 
total of $162,000. In addition, in February 1997, the Company raised offering 
proceeds of $930,000 from the sale of 155,000 shares of restricted common 
stock in a private placement.

     The Company will be relying on the proceeds from the Company's recent 
securities offerings or other debt or equity financing that may be available 
to meet further operating requirements for the fiscal year ended June 30, 
1998, should the Company fail to receive sufficient revenues from the sale of 
products to meet its operational needs.  

     Effective February 28, 1997, the Company completed the acquisition of all 
of the capital stock of UTI Chemicals (Europe) Ltd, a corporation incorporated 
under the laws of England and Wales ("UTI-UK"), from Coronel Investments 
Limited, a Jersey corporation ("Coronel").  The acquisition was made pursuant 
to a Share Purchase Agreement dated January 14, 1997 (the "Agreement"), 
between the Company, UTI-UK and Coronel, wherein the Company agreed to acquire 
UTI-UK from Coronel in exchange for the payment of 200,000 shares of the 
Company's restricted common stock and a cash payment of $400,000.
<PAGE> 11

     The Company utilized proceeds derived from the February 1997 private 
placement of its equity securities to make the cash portion of the purchase 
price.  The closing bid price for the Company's common stock on February 28, 
1997 (the "Closing Date") was $7.75.  Based on the closing bid price for the 
Company's common stock and the $400,000 cash, the purchase price of UTI-UK was 
valued at $1,950,000.  For purposes of accounting treatment, the acquisition 
of UTI-UK was treated as a purchase by the Company.

     The principles followed by the Company in determining the amount of 
consideration given by the Company to Coronel in negotiating the acquisition 
of UTI-UK was based the following criteria:

     1.     The value of the assets of UTI-UK (which includes the "Urathon" 
registered trademark), consisting mainly of inventory and accounts receivables 
of approximately $200,000 at December 31, 1996;

     2.     An existing relationship between UTI-UK and Michelin Tire Company 
("Michelin") to sell bicycle tires through 540 Michelin owned ATS stores in 
the United Kingdom;

     3.     UTI-UK's working relationship with the technical development 
manager of Dunlop-Slazenger relating to a proposed tire/wheel design; and 
UTI-UK's working in partnership with Weihai Yicklong Industrial Development 
Co., Ltd., Weihai, China, to work in partnership to supply tires for export 
markets from China. In addition, UTI-UK has been working on an agreement with 
Super Tires Industries, Ltd. in Pakistan to sell an equipment package for 
bicycle tire production at a cost of approximately $2 million.

     4.     In June 1995, in an effort to assist the Company's cash flow from 
operations while waiting for its production facility to be completely 
operational, the Company purchased thousands of low density foam bicycle tires 
from UTI-UK, to be used for resale in the U.S. market.  However, UTI-UK was 
not able to provide the Company with a sufficient quantity of tires for an 
orderly sales program to be implemented due to operating problems from 
UTI-UK's provider.  Although UTI-UK has shipped the Company some tires, the 
balance of the Company's payment to UTI-UK, $87,401, was treated as a deposit 
against delivery of additional tires.  The $87,401 was returned to the Company 
by UTI-UK as a condition to the acquisition.  The tires being held for resale 
by the Company were thereafter returned to UTI-UK for sale in the European 
market.

     UTI-UK has since 1990 been a distributor of urethane bicycle, wheelchair 
and other specialty tires in the United Kingdom and Europe.  UTI-UK 
distributes urethane bicycle tires under the trade name "Urathon TM" in 
approximately 540 Michelin Tire Company owned ATS stores in England, Scotland 
and Wales.  UTI also sells products in France, Denmark, Austria, the 
Netherlands and Germany through independent representatives and distributors.

     In connection with the acquisition of UTI-UK, the Company and Coronel 
entered into a lock-up agreement, wherein Coronel agreed not to sell during 
the 24 month period following the Closing Date (i.e., March 1, 1999), more 
than 50,000 shares of the Company's common stock acquired, provided however, 
all such sales of the Company's common stock during the lock-up period are 
made in a market transaction pursuant to an effective registration statement 
or in reliance on an exemption from registration under the Securities Act of 
1933, as amended.

PAGE
<PAGE> 12

     In addition, the Company entered into a management agreement with 
Coronel, wherein Coronel has been retained to manage the day-to-day operations 
of UTI-UK for a 12-month period beginning February 1, 1997, in exchange for a 
monthly fee of US$9,990, and Hugh-Sims Hilditch, the principal and sole 
shareholder of Coronel was appointed to the Company's board of directors and 
to serve as Managing Director for European Operation.  The management 
agreement was amended to provide for the issuance of 15,000 shares of the 
Company's common stock as full consideration for the management of UTI 
operations during the term of the agreement. The Company plans to continue in 
each aspect the business of UTI-UK as described above, and to utilize UTI-UK 
to market the Company's products in the United Kingdom and Europe.

     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, 1998.  However, as financial resources 
are available to justify such expenditures, the Company will continue 
development of the Company's shell elastomer tire concepts.


ITEM 7.  FINANCIAL STATEMENTS

     The financial statements of the Company are set forth immediately 
following the signature page to this form 10-KSB.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                     ACCOUNTING AND FINANCIAL DISCLOSURE

     The Company has had no disagreements with its certified public
accountants with respect to accounting practices or procedures or
financial disclosure.  (See ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.)
PAGE
<PAGE> 13

                             PART III

    ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL 
        PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The following table sets forth as of November 13, 1997, the name, age, 
and position of each executive officer and director and the term of office of 
each director of the Company.

   Name            Age   Position                    Director or Officer Since
   ----            ---   --------                    -------------------------
Richard Steinke    55    Chairman, Director, CEO     January 1995
Roger A. Fleming   57    President and Director      February 1997
Hugh Sims-Hilditch 61    Vice-President and Director February 1997
Louis M. Haynie    69    Director                    July 1997
Ping Zhang         31    Vice-President and Director February 1997
David K. Griffiths 60    Treasurer/Controller        February 1995
Marcy L. Janis     29    Secretary                   February 1997

     The term of office of each director is one year and until his successor 
is elected and qualified at the Company's annual meeting, subject to removal 
by the Shareholders.  The term of office for each Officer is one year and 
until a successor is elected at the annual meeting of the Board of Directors 
and is qualified, subject to removal by the Board of Directors.  The Company 
will reimburse Directors for their expenses associated with attending 
Directors' meetings.  However, Directors have not, nor is it anticipated they 
will, receive any additional compensation for attending Directors' meetings.

Biographical Information
------------------------

     Set forth below is certain biographical information for each of the 
Company's Officers and Directors and other key personnel.

     Richard Steinke is a founder of the Company and currently serves as its 
Chairman and Chief Executive Officer.  From January 1992 to December 1994, Mr 
Steinke served as Chairman and C.E.O. of Alanco Environmental Resources, Inc., 
a manufacturer of environmental/pollution control equipment, Salt Lake City, 
Utah.  From June 1985 to December 1991, he was the Chairman and C.E.O. of UTI 
Chemicals, Inc.,  a developer and manufacturer of urethane chemicals, El Toro, 
California.  Mr. Steinke received a B.A. in Political Science and Economics 
from the University of Arizona, Tucson, Arizona, in 1967.

     Roger A. Fleming, joined the Company in February 1997 as its 
Vice-President of Technology.  Prior to joining the Company Mr. Fleming was a 
senior engineer at Goodyear Tire & Rubber Company, Akron, Ohio, were Mr. 
Fleming had worker for over 31 years.  Mr. Fleming holds many patents in 
product and process design and has managed the development of Goodyear's 
liquid phase united spare tire. Mr. Fleming received a degree in Chemical 
Engineering from North Carolina State University, Raleigh, North Caroline in 
1963.

     Hugh-Sims Hilditch joined the Company in February 1997 in connection with 
the Company's acquisition of UTI-UK and currently serves as a Vice President 
in charge of the Company's European operations.  Mr. Sims-Hilditch has in 
excess of the past five years served as the Manager of UTI-UK, Hilmarton, 
England, a distributor of urethane products in the United Kingdom and Europe.

<PAGE> 14

     Louis M. Haynie, was recently appointed to the Company's board of 
directors and currently is General Counsel and a Director of Research Medical, 
Inc. [NASDAQ: RMED], Salt Lake City, Utah, a developer, manufacturer and 
distributor a diversified line of health care products, focusing on 
specialized cardiovascular, vascular and blood management surgical devices and 
specialty pharmaceuticals.  Mr. Haynie's  past board services include the 
University of Utah Regents Advisory Board, Redwood Land Co., Salt Lake City, 
Utah, and MIS Corporation, Franklin, Tennessee.  Mr. Haynie has a law degree 
from the University of Utah and has been in the private practice of law since 
1951.

     Ping Zhang became a director of the Company in February 1997 and 
currently serves as a Vice-President. Mr. Zhang's responsibilities included 
investigating and developing opportunities and business relationships for the 
Company and its products in the Far East.  Mr. Zhang has for the past four 
years been actively involved in promoting U.S.- China business and trade 
relationships.  Mr. Zhang received a Masters Degree in Manufacturing and 
Industrial Technology from Arizona State University, Tempe, Arizona, in 1993, 
and a degree in Mechanical Engineering from Shanghai Jiatong University, 
Shanghai, China, in 1991.

     David K. Griffiths currently serves as the Company's Treasurer and 
principal accounting officer and has since 1960 been self-employed as an 
accountant/consultant for various small businesses.  Mr. Griffiths offers the 
Company 36 years experience in accounting and accounting related systems.  
Mr. 
Griffiths received a B.S. in Accounting from Arizona State University, Tempe, 
Arizona in 1961.

     Marcy L. Janus currently serves as the Company's Secretary.  In December 
1989, Marcy received a B.A. in Communications from Kent State University, 
Kent, Ohio.  Ms. Janis brings to the Company seven years experience in 
executive office management and computer services.

KEY EMPLOYEES
-------------

     Derek A. Bowers, joined the Company in June 1995 and is employed as the 
Company's Senior Development Engineer.  From May 1994 to June 1995, Mr. Bowers 
was employed by Huffy Bicycle Company, Celina, Ohio, as an engineer.  Mr. 
Bowers received a M.S. in Mechanical Engineering from Carnegie Mellon 
University, Pittsburgh, Pennsylvania, in May 1994 and a B.S. in Mechanical 
Engineering from Old Dominion University, Norfolk, Virginia, in May 1993.

     James G. Moore, Jr. joined the Company in August 1997 and is employed as 
the Company's manager of mold design and processing.  Prior to his employment 
with the Company, Mr. Moore worked at Goodyear Tire & Rubber Company, Akron, 
Ohio, were he had over 25 years of experience as a master tire carver, which 
included five years at the Goodyear apprentice school for tire tread pattern 
carving and mold carving.  Mr. Moore also took multiple engineering courses 
while enrolled in the civil engineering school at the University of Akron, 
Akron, Ohio.

     Sid Asthana joined the Company in October 1997 and is employed as the 
Company's senior chemist.  Mr. Asthana has received a B.S. in Chemical 
Engineering from the Regional Engineering College of India, Rourkela, India, 
July 1990, and a M.S. in Polymer Engineering from the University of Toledo, 
Toledo, Ohio in December 1993, and will be receiving his Ph.D. in Polymer 
Science from the University of Akron's Polymer Institute, Akron, Ohio, in 
January 1998.

<PAGE> 15

     Shanley Brown joined the Company in January 1997 and serves as the 
Company's domestic sales manager. Mr. Brown brings to the Company over 20 
years of experience in both domestic and international sales for bicycles and 
light duty pneumatic tires.  From 1994 to 1996, Mr. Brown, was Vice President 
of the Industrial Tire Division of Shinko USA, Carson City, California, a 
division of Shin Hung Co., Ltd., Osaka, Japan.  From 1991 to 1994, he was the 
National Sales Manager for Kenda Tire USA, Columbus, Ohio.  From 1984 to 1991, 
Mr. Brown was the Midwest Regional Manager for Greenball Corporation, Long 
Beach, California, a distributor of products for Cheng Shin Rubber, Taipei, 
Taiwan and from 1976 to 1984, Mr. Brown was the District Manager for Carlisle 
Tire and Rubber, Carlisle, Pennsylvania.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
-------------------------------------------------

     The Company is not subject to the requirements of Section 16(a) of the 
Exchange Act.

                     ITEM 10.  EXECUTIVE COMPENSATION

     The following tables set forth certain summary information concerning the 
compensation paid or accrued for each of the Company's last three completed 
fiscal years to the Company's or its principal subsidiaries chief executive 
officer and each of its other executive officers that received compensation in 
excess of $100,000 during such period (as determined at June 30, 1997, the end 
of the Company's last completed fiscal year):

<TABLE>
<CAPTION>                          Summary Compensation Table
                                                         Long Term 
Compensation
                                                         
----------------------
                     Annual Compensation                 Awards       Payouts
                                           Other        Restricted
Name and                                   Annual        Stock     Options 
LTIP     All other
Principal Position Year Salary    Bonus($) Compensation   Awards   /SARs   
Payout  Compensation
------------------ ---- ------    -------- ------------   ------   ------- 
------  ------------
<S>              <C>     <C>      <C>      <C>          <C>      <C>     
<C>     <C>
Richard A. Steinke  1997   $70,000  -0-      $20,000*     -0-      -0-     
-0-       -0-
C.E.O. and Chairman 1996    -0-     -0-       -0-         -0-      -0-     
-0-       -0-
                    1995    -0-     -0-       -0-         -0-      -0-     
-0-       -0-
</TABLE>

*  Effective May 1, 1997, Mr. Steinke declined to receive any further 
compensation from the Company based on his employment agreement, therefore all 
employment compensation due under Mr. Steinke's employment contract since May 
1, 1997 has been accrued.PAGE
<PAGE> 16

Employment Agreements and Benefits
----------------------------------

      The Company has entered into Employment Agreements with Richard A. 
Steinke, its Chief Executive Officer.  Beginning October 1, 1996, the 
Employment Agreement called from Mr. Steinke to be employed for a term of 36 
months, with monthly compensation of $10,000, subject to increase at the 
discretion of the Board of Directors.  The Company provides group health, 
medical, and life insurance, similar to that which will be made available to 
all full time employees and reimburses Mr. Steinke for out-of-pocket expenses 
incurred in connection with the Company's business.  In the event of 
termination of Mr. Steinke's employment, for reasons other than cause, as 
defined in the employment agreement, Mr. Steinke's monthly salary would 
continue throughout the balance of the term of the employment agreement. 
Effective May 1, 1997, Mr. Steinke declined to receive any further 
compensation from the Company based on his employment agreement, therefore all 
employment compensation due under Mr. Steinke's employment contract since May 
1, 1997 has been accrued.

     As a condition to employment, all the Company's managers and key 
personnel are required to sign a nondisclosure and noncompetition agreement.  
Under the terms of the nondisclosure and noncompetition agreement, employees 
will not be able to provide services or information deemed confidential by the 
Company to any other company or person which directly or indirectly competes 
with the Company in the tire industry or an industry which at the time of the 
employees' employment, the Company intended to enter.  There is no time 
limitation on the nondisclosure aspect of the agreement.  The noncompetition 
clause is for a period of two years and prevents a former employee or 
consultant of the Company from acting as an employee, consultant or in any 
other capacity for a competitor of the Company.  Additionally, all employees 
will be required, as a condition of their employment, to enter into a 
nondisclosure agreement related to any information or process deemed 
confidential by the Company.

Pension Table
-------------

     None.

Other Compensation
------------------

     None.

Compensation of Directors
-------------------------

     None.
PAGE
<PAGE> 17

Termination of Employment and Change of Control Arrangement
-----------------------------------------------------------

     Unless otherwise disclosed below, there are no compensatory plans or 
arrangements, including payments to be received from the Company, with respect 
to any person named in Cash Compensation set out above which would in any
way result in payments to any such person because of his resignation, 
retirement, or other termination of such person's employment with the Company 
or its subsidiaries, or any change in control of the Company, or a change in 
the person's responsibilities following a changing in control of the Company.

     On August 19, 1997, the Company entered into an agreement with a 
principal shareholder and former officer and director, Dennis S. Chrobak 
("Chrobak"), to resolve all disputes between them relating to Chrobak's 
employment and ownership interest in the Registrant.  In connection therewith 
the Registrant has agreed to pay Chrobak:

     1.  $80,000, the amount of Chrobak's accrued salary under his employment 
agreement, which amount represents the aggregate amount of Chrobak's monthly 
employment compensation for the period from October 1996 through May 1997;

     2.  $30,000, towards the recission and cancellation of an October 1996 
transaction between the Company and Chrobak, wherein the Company had issued to 
Chrobak 15,000 shares of its common stock in exchange for cancellation of a 
promissory note from the Company to Mr. Chrobak in the principal amount of 
$30,000; and

     3.  $200,000, towards the purchase and cancellation of 1,255,000 shares 
of the Company's common stock beneficially owned by Chrobak (the "Chrobak 
Shares").  The Chrobak Shares had been issued to Chrobak in February 1995 in 
connection with the organization of the Company.  The Company has agreed pay 
Chrobak $10,000 per month for 20 consecutive months beginning September 1, 
1997.

     On August 19, 1997, the Registrant had 4,567,248 shares of its common 
stock issued and outstanding.  After giving effect to the cancellation of the 
1,270,000 shares of common stock pursuant to the above transaction, the 
Company will have 3,297,248 shares of common stock outstanding.
PAGE
<PAGE> 18

  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of November 13, 19976, the name and the 
number of shares of the Company's Common Stock, par value $0.001 per share, 
held of record or beneficially by each person who held of record, or was known 
by the Company to own beneficially, more than 5% of the 3,297,248 issued and 
outstanding shares of the Company's Common Stock, and the name and 
shareholdings of each director and of all officers and directors as a group.

Security Ownership of Certain Beneficial Owners

Title  
 of      Name and Address              Amount and Nature of     Percentage 
Class    Beneficial Owner              Beneficial Ownership(1)   of Class
-----    ----------------              --------------------     ----------
Common   Gemini Funding Services       D          455,000             13.8
          Profit Sharing Plan
         1643 Nevada Highway
         Boulder City, NV  89005

Common   S102 Irrevocable Trust        D          800,000             24.3
         1643 Nevada Highway
         Boulder City, NV  89005

Common   Coronel Investments Limited   D          242,000              7.3
         Thane House, Hilmarton
         Wiltshire, England SN11 8SB

SECURITY OWNERSHIP OF MANAGEMENT OF THE COMPANY 

Title  
 of      Name and Position of          Amount and Nature of     Percentage 
Class    Officer and/or Director       Beneficial Ownership(1)   of Class
-----    -----------------------       --------------------     ----------
Common   Roger A. Fleming, President   D           60,000              1.8
          and Director

Common   Richard A. Steinke, C.E.O.    I (2)      455,000             13.8
          and Director                   (3)      800,000             24.3

Common   Ping Zhang, V.P. and Director D            2,000               .1

Common   Hugh Sims-Hilditch, V.P. and  I (4)      242,000              7.3
          Director

Common   Louis M. Haynie, Director     D           30,000               .9
                                       I (5)        2,000               .1

Common   David K. Griffiths, Treasurer D           20,000               .6

Common   Marcy L. Janus, Secretary     D             -                  -

         All Officers and Directors
          as a Group (7 person)        D          112,000              3.4
                                       I        1,499,000             45.5
                                                ---------             ----
         Total Beneficial Ownership             1,611,000             48.9
                                                =========             ====
                        [Footnotes continue on next page]
<PAGE> 19

(1) Indirect and Direct ownership are referenced by an "I" or "D", 
respectively.  All shares owned directly are owned beneficially and of record 
and such shareholder has sole voting, investment, and dispositive power, 
unless otherwise noted.

(2) Represent shares owned beneficially and of record by Gemini Funding 
Services Profit Sharing Account, of which Richard A. Steinke is the principal 
beneficiary.

(3) Represent shares owned beneficially and of record by S102 Irrevocable 
Trust, for which Richard A. Steinke is the trustee.
     
(4) Represent shares owned beneficially and of record by Coronel Investments 
Limited, a Jersey corporation, of which Hugh Sims-Hilditch is the principal 
owner.

(5) Represent shares owned beneficially and of record by Gae Haynie, spouse of 
Louis M. Haynie, and which Mr. Haynie may be deemed to have beneficial 
ownership of such shares.

             ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

DSS License Agreement

     On August 19, 1997, the Company entered into a revised agreement amending 
the terms of the June 5, 1995, DSS License Agreement with AMS, a Nevada 
corporation controlled by Dennis S. Chrobak and Richard A. Steinke, affiliates 
of the Company. The DSS License Agreement was amended to provide that the 
license be directly between the Company and Mr. Chrobak and Mr. Steinke. The 
DSS License Agreement grants the Company an exclusive to use, sell, license, 
or otherwise exploit the DSS Technology worldwide in exchange for a royalty.  
The revision of the DSS License Agreement provides for the royalty to be 
reduced from $1.00 to $0.50 for each unit of production produced and sold by 
the Company. All royalties payable under the DSS License Agreement will be 
paid to Mr. Chrobak.  Mr. Steinke will not receive a royalty under the 
agreement so long as he is affiliated with the Company.  Due to the 
relationship of Mr. Steinke and Mr. Chrobak with the Company, the DSS License 
Agreement and the revisions thereto cannot be considered to have been 
negotiated at arm's length.

Airless Tire License Agreement

     On August 19, 1997, the Company entered into a revised agreement amending 
the terms of the October 27, 1995, Airless Tire License Agreement with AMS.  
The Airless Tire License Agreement was amended to provide that the license be 
directly between the Company and Mr. Chrobak and Mr. Steinke.  The Airless 
Tire License Agreements grants the Company an exclusive license to use, sell, 
license, or otherwise exploit the technology worldwide in exchange for a 
royalty.  The revision of the Airless Tire Technology Agreement provides for 
the royalty to be reduced from $0.25 to $0.125 for each bicycle tire produced 
and sold by the Company utilizing the technology.  All royalties payable under 
the Airless Tire Technology Agreement will be paid to Mr. Chrobak.  Mr. 
Steinke will not receive a royalty under the agreement so long as he is 
affiliated with the Company.  Due to the relationship of Mr. Steinke and Mr. 
Chrobak with the Company, the Airless Tire License Agreement cannot be 
considered to have been negotiated at arm's length.
PAGE
<PAGE> 20

Stock Subscriptions Receivables

     In April 1995, the Company entered into subscription agreements with Gary 
Dalton, Philip Chrobak, and David Griffiths, three of its Officers, to acquire 
an aggregate of 170,000 shares of its Common Stock at a purchase price of 
$1.00 per share, in exchange for promissory notes bearing interest at 8% per 
annum, payable in 36 months.  The promissory notes were subsequently amended 
to become due six months from the close of the Company's initial public 
offering.  

     During the fiscal year ended June 30, 1997, additional services were 
provided valued at $40,000, which were offset against the amounts owed under 
the promissory notes.  At June 30, 1997, $50,000 was owed under the promissory 
notes, including $5,000 of accrued interest,

                        Number of      Consideration    Relationship
Name of Shareholder     Shares Issued  to be Paid       to the Company
-------------------     -------------  -------------    --------------
Gary Dalton (1)            100,000       $100,000       Officer/Director
Philip J. Chrobak (2)       50,000         50,000       Officer
David Griffiths (3)         20,000         20,000       Officer
                           -------       --------
Totals                     170,000       $170,000
                           =======       ========

(1)  As of June 30, 1997, Mr. Dalton had paid full consideration for his 
shares which amounts were applied against the principal and interest to be 
paid under the promissory note.

(2)  As of June 30, 1997, Mr. Chrobak had provided services to the Company 
valued at $5,000, which amount has been applied against the principal and 
interest to be paid under the promissory note.  Subsequent to June 30, 1997, 
the full consideration for the shares was paid in full.

(3)  At June 30, 1996, the value of the accounting services provided by Mr. 
Griffiths exceeded the amount required for payment in full of the promissory 
note and were applied against principal and interest so that the full 
consideration for the shares has been paid.


            ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

  (a)(1)FINANCIAL STATEMENTS.  The following financial statements are included 
in this report:

Title of Document                                                         Page
-----------------                                                         ----
Independent Auditors' Report of Jones, Jensen & Company                    22
Independent Auditors' Report of Saltz, Shamis & Goldfarb, Inc.             23
Consolidated Balance Sheet as of June 30, 1997                             24
Consolidated Statements of Operations for the years ended June 30, 1997
 and 1996 and from inception on January 30, 1995 through June 30, 1997     26
Consolidated Statements of Stockholders' Equity                            27
Consolidated Statements of Cash Flows for the years ended June 30, 1997
 and 1996 and from inception on January 30, 1995 through June 30, 1997     29
Notes to Consolidated Financial Statements                                 31

 (a)(2)FINANCIAL STATEMENT SCHEDULES.  The following financial statement 
schedules are included as part of this report:     None.
<PAGE> 21

 (a)(3)EXHIBITS.  The following exhibits are included as part of this report:

         SEC
Exhibit  Reference
Number   Number     Title of Document                           Location
-------  ---------  -----------------                         ------------
  1       10        Revised DSS Technology License Agreement  This Filing

  2       10        Revised Airless Tire Technology
                    License Agreement                         This Filing

 27       27        Financial Data Schedule                   This Filing

 (b) Reports on Form 8-K.  

     During the quarter ended June 30, 1996, the Company filing the following 
reports on Form 8-K filed with the Commission:

Date of Report     Items Covered By Report
--------------     -----------------------
6/13/97            Item 4, Change in Registrant's Certifying Accountant


                                SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, as 
amended, this report has been signed below by the following persons on behalf 
of the Registrant and in the capacities and on the dates indicated:

                                        AMERICAN TIRE CORPORATION


                                        
Date: November 14, 1997                 By /S/Richard A. Steinke, C.E.O. and
                                        Director (Principal Executive Officer)

                                        
Date: November 14, 1997                 By /S/Roger A. Fleming, President and
                                        Director

                                        
Date: November 14, 1997                 By /S/Louis M. Haynie, Director

                                        
Date: November 14, 1997                 By /S/David K. Griffiths, Treasurer
                                        (Principal Accounting Officer)

                                      
Date: November 14, 1997                 By /S/Ping Zhang, Director


Date: November 14, 1997                 By/S/Hugh Sims-Hilditch, Director
PAGE
<PAGE> 22

INDEPENDENT AUDITORS' REPORT

Board of Directors
American Tire Corporation and Subsidiary
(A Development Stage Company)
Boulder City, Nevada

We have audited the accompanying consolidated balance sheet of American Tire 
Corporation and Subsidiary (A Development Stage Company) as of June 30, 1997 
and the related consolidated statements of operations, stockholders' equity 
and cash flows for the year then ended. These consolidated financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these consolidated financial 
statements based on our audit. We did not audit the financial statements of 
UTI Chemicals (Europe) Limited, a wholly-owned subsidiary, which statements 
reflect total assets of $384,184 as of June 30, 1997 and total revenues of 
$55,012 for the four months then ended. Those statements were audited by other 
auditors whose report has been furnished to us, and our opinion, insofar as it 
relates to the amounts included for UTI Chemicals (Europe) Limited, is based 
solely on the report of the other auditors.

We have conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the consolidated financial 
statements are free of material misstatement. An audit includes examining, on 
a test basis, evidence supporting the amounts and disclosures in the 
consolidated financial statements. An audit also includes assessing the 
accounting principles used and significant estimates made by management, as 
well as evaluating the overall financial statement presentation. We believe 
that our audit and the report of other auditors provide a reasonable basis for 
our opinion.

In our opinion, based on our audit and the report of other auditors, the 
consolidated financial statements referred to above present fairly, in all 
material respects, the consolidated financial position of American Tire 
Corporation and Subsidiary (A Development Stage Company) as of June 30, 1997, 
and the results of their operations and their cash flows for the year then 
ended, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming 
the Company will continue as a going concern.  As described in Note 7 to the 
consolidated financial statements, the Company has incurred significant losses 
which have resulted in an accumulated deficit, raising substantial doubt about 
its ability to continue as a going concern. Management's plans in regard to 
these matters are also described in Note 7.  The consolidated financial 
statements do not include any adjustments that might result from the outcome 
of this uncertainty.

/S/ Jones, Jensen & Company
November 8, 1997
PAGE
<PAGE> 23

INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Board of Directors
American Tire Corporation

We have audited the statements of operations, shareholders' equity, and cash 
flows of American Tire Corporation for the year ended June 30, 1996. These 
financial statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based on 
our audit.

We conducted our audit in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the results of its operations and its cash flows of 
American Tire Corporation for the year ended June 30, 1996, in conformity with 
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the company 
will continue as a going concern.  As described in Note 7 to the financial 
statements, the Company's ability to bring its product to market are dependent 
on its successful obtainment of capital to fund its activities.

In the event the Company is unsuccessful in obtaining sufficient capital, 
there is substantial doubt about the Company's ability to continue as a going 
concern.  The financial statements do not include any adjustments that might 
result from the outcome of this uncertainty.


/S/ SALTZ, SHAMIS & GOLDFARB, INC.

Akron, Ohio
October 9, 1996



PAGE
<PAGE> 24

                   AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                         CONSOLIDATED BALANCE SHEET                   

                                    ASSETS
                                    ------
                                                            June 30,
                                                              1997
                                                          ------------

CURRENT ASSETS
 
 Cash and cash equivalents                                $    501,449
 Accounts receivable                                            73,922
 Accounts receivable - related party (Note 3)                    2,237
 Inventory (Note 1)                                            303,704
 Prepaid expenses                                               91,320
                                                          ------------
     Total Current Assets                                      972,632
                                                          ------------
PROPERTY AND EQUIPMENT (Note 1)

 Land                                                           59,000
 Building and improvements                                     278,501
 Equipment and vehicles                                        660,793
 Furniture and fixtures                                         32,808
 Less - accumulated depreciation                              (150,627)
                                                          ------------
     Total Property and Equipment                              880,475
                                                          ------------
OTHER ASSETS
 
 Patents (Note 1)                                               24,822
 Deposits                                                        4,414
 Goodwill (Note 1)                                           1,694,111
                                                          ------------
     Total Other Assets                                      1,723,347
                                                          ------------

TOTAL ASSETS                                              $  3,576,454
                                                          ============

The accompanying notes are an integral part of these consolidated financial 
statements.
PAGE
<PAGE> 25
       
                   AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A DEVELOPMENT STAGE COMPANY)
                    Consolidated Balance Sheet (Continued)

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------
                                                            June 30,
                                                              1997
                                                          ------------

CURRENT LIABILITIES
 
 Accounts payable                                         $     69,077
 Accounts payable - related parties (Note 3)                   150,000
 Accrued expenses                                               16,032
 Line of credit (Note 6)                                        55,380
                                                          ------------
     Total Current Liabilities                                 290,489
                                                          ------------

TOTAL LIABILITIES                                              290,489
                                                          ------------

COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY

 Preferred stock: 5,000,000 shares authorized
  of $0.001 par value, 0 shares issued and outstanding            -
 Common stock: 25,000,000 shares authorized 
  Of $0.001 par value, 4,561,748 shares issued
  and outstanding                                                4,562
 Additional paid-in capital                                  5,582,811
 Stock subscription receivable (Note 2)                        (50,000)
 Currency translation adjustment                                 2,984
 Deficit accumulated during the development stage           (2,254,392)
                                                          ------------
     Total Stockholders' Equity                              3,285,965
                                                          ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $  3,576,454
                                                          ============

The accompanying notes are an integral part of these consolidated financial 
statements.
PAGE
<PAGE> 26
<TABLE>
<CAPTION>          AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                     Consolidated Statements of Operations
                                                                                
        From
                                                                                
    Inception on
                                                                                
    January 30,                                                              
For the Years Ended       1995 Through
                                                                June 
30,              June 30, 
                                                          1997           
1996           1997                                                            
------------   ------------    ------------
<S>                                                <C>            
<C>             <C>
NET SALES                                            $     69,518   $       
-       $     69,518
                                                     ------------   
------------    ------------

COST OF SALES                                              47,882           
-             47,882
                                                     ------------   
------------    ------------
EXPENSES 
 Consulting                                               292,414         
43,261         484,792
 Payroll and payroll taxes                                521,773        
222,757         774,347
 Depreciation and amortization                            189,563         
37,994         228,862
 Bad debt expense                                          21,112           
-             21,112 
 Selling, general and administrative                      457,439        
246,418         772,758
                                                     ------------   
------------    ------------

    Total Expenses                                      1,482,301        
550,430       2,281,871
                                                     ------------   
------------    ------------
INCOME (LOSS) BEFORE OTHER INCOME EXPENSES             (1,460,665)      
(550,430)     (2,260,235)
                                                     ------------   
------------    ------------
OTHER INCOME (EXPENSES)
 Other income                                              56,096           
-             56,096
 Interest income                                           17,649          
8,161          29,421
 Interest expense                                         (19,090)       
(53,821)        (76,012)
 Loss on disposition of assets                             (3,662)          
-             (3,662)
                                                     ------------   
------------    ------------
                                                           50,993        
(45,660)          5,843
                                                     ------------   
------------    ------------
NET (LOSS)                                           $ (1,409,672)  $   
(596,090)   $ (2,254,392)
                                                     ============   
============    ============

NET (LOSS) PER SHARE                                 $      (0.33)  $      
(0.16)
                                                     ============   
============

WEIGHTED AVERAGE SHARES OUTSTANDING                     4,246,888      
3,840,642
                                                     ============   
============


</TABLE>

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

PAGE
<PAGE> 27
<TABLE>
<CAPTION>         AMERICAN TIRE CORPORATION AND SUBSIDIARY 
                        (A Development Stage Company)
               Consolidated Statements of Stockholders' Equity

                                                                                
         Deficit
                                                                                
        Accumulated
                                                 Additional  Currency       
Stock       During the
                              Common Stock        Paid-in   Translation  
Subscription   Development 
                            Shares      Amount    Capital    Adjustment   
Receivable       Stage
                          ----------  ---------  ---------  -----------  
------------  -------------
<S>                      <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> 28
<TABLE>
<CAPTION>         AMERICAN TIRE CORPORATION AND SUBSIDIARY 
                        (A Development Stage Company)
         Consolidated Statements of Stockholders' Equity (Continued)

                                                                                
         Deficit
                                                                                
        Accumulated
                                                 Additional  Currency       
Stock       During the
                              Common Stock        Paid-in   Translation  
Subscription   Development 
                            Shares      Amount    Capital    Adjustment   
Receivable       Stage
                          ----------  ---------  ---------  -----------  
------------  -------------
<S>                      <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 UTI Chemicals
 (Europe) 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> 29
<TABLE>
<CAPTION>          AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
                     Consolidated Statements of Cash Flows
                                                                                
        From
                                                                                
    Inception on
                                                                                
    January 30,
                                                         For the Years 
Ended        1995 Through
                                                                June 
30,              June 30, 
                                                          1997           
1996           
1997                                                               
------------   ------------    ------------
<S>                                                <C>            
<C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net (Loss)                                           $ (1,409,672)  $   
(596,090)   $ (2,254,392)
 Adjustments to Reconcile Net (Loss) to
  Net Cash (Used) by Operating Activities:
    Depreciation and amortization                         189,563         
37,994         228,862
    Loss on disposition of assets                           3,662           
-              3,662
    Common stock issued for services                      211,755           
-            340,755
    Services provided in lieu of cash payment
     on subscriptions receivable                           40,000          
8,900          75,000
    Common stock issued in lieu of debt                   162,000           
-            162,000
  Changes in Assets and Liabilities:
     (Increase) decrease in accounts receivable           (43,399)       
(18,348)        (66,166)
     (Increase) decrease in inventory                    (172,419)      
(131,285)       (303,704)
     (Increase) decrease in prepaid expenses              (58,413)        
(4,794)        (91,320)
     (Increase) decrease in other assets                  192,921        
107,455          93,693
     Increase (decrease) in accounts payable and
      accrued expenses                                   (129,401)        
72,443         (25,891)
                                                     ------------   
------------    ------------
  Net Cash (Used) by Operating Activities              (1,013,403)      
(523,725)     (1,837,501)

CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of equipment                                   (469,392)      
(140,505)       (992,048)
 Purchase of investments                                 (400,000)          
-           (400,000)
                                                     ------------   
------------    ------------
  Net Cash (Used) in Investing Activities            $   (869,392)  $   
(140,505)   $ (1,392,048)
                                                     ------------   
------------    ------------
</TABLE>

The accompanying notes are an integral part of these consolidated financial 
statements.
PAGE
<PAGE> 30
<TABLE>
<CAPTION>          AMERICAN TIRE CORPORATION AND SUBSIDIARY
                        (A Development Stage Company)
              Consolidated Statements of Cash Flows (Continued) 
                                                                                
        From
                                                                                
    Inception on
                                                                                
    January 30,
                                                         For the Years 
Ended        1995 Through
                                                                June 
30,              June 30, 
                                                          1997           
1996           1997                                                             
  ------------   ------------    ------------
<S>                                                <C>            
<C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from notes payable                         $       -      $    
463,000    $    852,838
 Payment made on notes payable                           (244,458)      
(104,000)       (536,458)
 Common stock issued for cash                           2,624,235        
216,968       3,414,618
                                                     ------------   
------------    ------------
     Net Cash Provided by Financing Activities          2,379,777        
575,968       3,730,998
                                                     ------------   
------------    ------------

NET INCREASE (DECREASE) IN CASH                           496,982        
(88,262)        501,449

CASH AND CASH EQUIVALENTS AT BEGINNING
 OF YEAR                                                    4,467         
92,729            -
                                                     ------------   
------------    ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR             $    501,449   $      
4,467    $    501,449
                                                     ============   
============    ============

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

  CASH PAID FOR:
     Interest                                        $     19,090   $     
26,654    $     47,572
     Income taxes                                    $       -      $       
-       $       -

NON-CASH FINANCING ACTIVITIES

 Common stock issued for services rendered           $    211,755   $       
-       $    340,755
 Common stock issued in lieu of debt                 $    162,000   $       
-       $    162,000
 Common stock issued for acquisition of subsidiary   $  1,550,000   $       
-       $  1,550,000

</TABLE>

In April 1995, the Company issued 170,000 shares of common stock at $1.00 per 
share in exchange for notes receivable.  During the period ended June 30, 
1995, services were provided valued at $26,100, which were offset against the 
notes receivable.  During the years ended June 30, 1997 and 1996, an 
additional $40,000 and $8,900, respectively, of services were provided, which 
were offset against the notes receivable.

The accompanying notes are an integral part of these consolidated financial 
statements.
PAGE
<PAGE> 31
                       AMERICAN TIRE CORPORATION AND SUBSIDIARY
                            (A DEVELOPMENT STAGE COMPANY)
                    Notes to the Consolidated Financial Statements
                                  June 30, 1997

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, UTI Chemicals (Europe) 
Limited (UTI).  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 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 intends to engage in the manufacturing, 
marketing, distribution, and sale of airless specialty tires and tire-wheel 
assemblies and currently is manufacturing airless tires in limited quantities 
at its manufacturing facility located in Ravenna, Ohio.

On February 28, 1997, ATC purchased UTI for $1,950,000 by issuing 200,000 
shares of its common stock plus $400,000 in cash in exchange for 100% of the 
issued and outstanding stock of UTI.  The purchase of UTI resulted in the 
creation of goodwill of $1,694,111 at June 30, 1997.

UTI Chemicals (Europe) Limited (UTI) was incorporated under the laws of 
England and Wales on October 8, 1990 for the purpose of promoting and 
developing products within the chemical industry.  Since 1990, UTI has been a 
distributor of urethane bicycle, wheelchair and other specialty tires in the 
United Kingdom and Europe.  UTI distributes urethane tires under the 
registered trade name "Urathon" in approximately 540 retail outlets in 
England, Scotland and Wales.  UTI also sells product in France, Denmark, 
Austria, the Netherlands and Germany through independent distributors.

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.

d.  Net (Loss) Per Share

The computations of net (loss) per share of common stock are based on the 
weighted average number of shares outstanding.

PAGE
<PAGE> 32

                     AMERICAN TIRE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
                  Notes to the Consolidated Financial Statements
                                 June 30, 1997

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

e.  Principles of Consolidation

The June 30, 1997 consolidated financial statements include those of American 
Tire Corporation and its wholly-owned subsidiary, UTI Chemicals (Europe) 
Limited.  All significant intercompany accounts and transactions have been 
eliminated.

For the Company's foreign subsidiary (UTI), the functional currency has been 
determined to be the local currency.  Accordingly, assets and liabilities are 
translated at year-end exchange rates, and operating statement items are 
translated at average exchange rates prevailing during the year.  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 years 
presented.

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 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 June 30, 1997, the Company has net operating loss carry forwards of 
approximately $2,250,000 which will expire in 2012.  No tax benefit has been 
reported in the consolidated financial statements because the potential tax 
benefits of the 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.

PAGE
<PAGE> 33

                      AMERICAN TIRE CORPORATION AND SUBSIDIARY
                           (A Development Stage Company)
                   Notes to the Consolidated Financial Statements
                                   June 30, 1997

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

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 years ended June 30, 1997 and 1996 was $68,555 
and $37,994, respectively.

j.  Revenue Recognition

Revenue is recognized upon shipment of goods to the customer.

k.  Concentrations of Risk

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

Since UTI 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.  Goodwill

Goodwill consists of the excess of the purchase price of fair value of net 
assets of the purchased subsidiary and is amortized on the straight-line 
method over a 5 year period.

The Company periodically reviews goodwill for impairment by comparing undiscount
ed projected income over the remaining amortization period to the unamortized 
balance of goodwill. No impairments have been recorded.  Amortization expense 
on the goodwill for the year ended June 30, 1997 was $121,008.


<PAGE> 34

                      AMERICAN TIRE CORPORATION AND SUBSIDIARY
                           (A Development Stage Company)
                   Notes to the Consolidated Financial Statements
                                   June 30, 1997

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

m.  Patents

Patents and related technology have been capitalized at June 30, 1997.  The 
patents are still pending, thus, no amortization of the costs has been 
recorded for the year ended June 30,1997.

NOTE 2- STOCK SUBSCRIPTION RECEIVABLE

In April 1995, the Company entered into subscription agreements for three of 
its officers to acquire an aggregate of 170,000 shares of common stock at a 
purchase price of $1.00 per share, in exchange for promissory notes bearing 
interest at 8% per annum, principal and interest payable in April, 1998.  The 
officers provided accounting and consulting services valued at $26,100 which 
have been charged to operations during the period ended June 30, 1995, and 
offset against the amount owed under the promissory notes.  The promissory 
notes were amended to become due no later than six months form the close of 
the Company's initial public offering.

During the year ended June 30, 1996, an officer provided $8,900 of accounting 
services, which was offset against the amounts owed under the promissory note, 
and another officer paid $50,000 toward his note receivable.  During the year 
ended June 30, 1997, additional services were provided valued at $40,000 which 
were offset against the amount owed under the promissory note.  At June 30, 
1997, $50,000 was owed under these notes including $5,000 of accrued interest, 
which has been presented as a reduction of stockholders' equity.

NOTE 3- RELATED PARTY TRANSACTIONS

In August 1995, the Company entered into employment agreements with two of its 
officers.  These agreements are for 36 months at a monthly compensation of 
$10,000 each.  At June 30, 1997, $100,000 was owed to the two officers for 
unpaid wages. In addition, $50,000 was due to another officer at June 30, 1997 
for services rendered to the Company from February 1, 1997 to June 30, 1997.

In October 1995, the Company entered into a Technology License Agreement with 
a related party providing for a royalty of $0.25 to be paid for each tire sold 
by the Company utilizing the "airless tire technology" as defined by the 
agreement.

As of June 30, 1997, $2,237 was owed to the Company by certain employees and 
related entities.

NOTE 4- COMMITMENTS AND CONTINGENCIES

On January 31, 1997, the Company entered into a management agreement with a 
corporation to manage the day-to-day operations of UTI, the Company's wholly-
owned subsidiary.  The Company issued 15,000 shares of its common stock as 
full consideration for the management services.  The agreement expires on 
January 31, 1998.

PAGE
<PAGE> 35
                     AMERICAN TIRE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
                  Notes to the Consolidated Financial Statements
                                  June 30, 1997

NOTE 4- COMMITMENTS AND CONTINGENCIES (Continued)

On June 5, 1995, the Company entered into a Technology License Agreement with 
a related party. The agreement provides the Company the exclusive license to 
use, sell and license the technology for manufacturing a wheel-tire assembly 
known as the "Dynamic Steerable Spring."  The agreement specified that a 
royalty of either $1 per unit sold directly by the Company or eight percent of 
any royalty the Company should receive from any third party licensee to be 
paid quarterly.  The agreement was superceded subsequent to June 30, 1997 
(Note 9).

NOTE 5- STOCK TRANSACTIONS

Pursuant to a recission offer and agreement, the Company repurchased and 
canceled 34,977 shares of its outstanding common stock at $6.00 per share 
during the year ended June 30, 1997.

During the year ended June 30, 1997, the Company completed a public offering 
of 344,083 shares of common stock at $6.00 per share for total proceeds of 
$2,064,498.  The Company also completed a private placement during February 
1997 of 155,000 shares at $6.00 per share for total proceeds of $930,000.

During the year ended June 30, 1997, the Company issued 27,000 shares of 
common stock valued at $162,000 in lieu of outstanding debt.  The Company also 
issued 15,000 shares of common stock valued at $119,880 pursuant to a 
management agreement (Note 4) and 15,000 shares for services rendered valued 
at $91,875 (Note 8).

NOTE 6 - LINE OF CREDIT

The Company has a line of credit with a bank with a maximum of $41,605.  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 June 30, 1997 was 
$55,380.

NOTE 7- GOING CONCERN

     The Company's consolidated financial statements are prepared using 
generally accepted accounting principles applicable to a going concern which 
contemplates the realization of assets and liquidation of liabilities in the 
normal course of business.  The Company has historically incurred significant 
losses which have resulted in an accumulated deficit of $2,254,392 at June 30, 
1997 which raises substantial doubt about the Company's ability to continue as 
a going concern.  The accompanying consolidated financial statements do not 
include any adjustments relating to the recoverability and classification of 
asset carrying amounts or the amount and classification of liabilities that 
might result from the outcome of this uncertainty.  It is the intent of 
management to create additional selling avenues through the development and 
sales of its patented tires and to rely upon additional equity financing if 
required to sustain operations.
PAGE
<PAGE> 36
                       AMERICAN TIRE CORPORATION AND SUBSIDIARY
                            (A Development Stage Company)
                    Notes to the Consolidated Financial Statements
                                    June 30, 1997

NOTE 8- 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 year 
ended June 30, 1997 consisted of the following:

                                 Number of         Weighted Average
                                 Shares            Price per Share
                                 ---------         ----------------
Outstanding at June 30, 1996          -            $  -
Granted during the year             35,000           3.80
Exercised during the year          (15,000)         (1.73)
                                 ---------         ------
Outstanding at June 30, 1997        20,000         $ 2.07
                                 =========         ======

The 20,000 stock options outstanding at June 30, 1997 are summarized as 
follows:

Date               Number of     Exercise    Expiration
Issued             Options       Price       Date
------             ---------     --------    ----------
May 31, 1997       14,500        $2.00       May 31, 1999
June 9, 1997        5,500        $2.25       June 9, 1999

NOTE 9- SUBSEQUENT EVENTS

     Subsequent to June 30,1997, the following events occurred.

     1.  The Company entered into an Agreement of Settlement and Mutual 
Release on August 19, 1997 with two former officers and an other employee of 
the Company.  As part of the settlement agreements, the Company has 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 is to be paid in 
twenty equal consecutive monthly payments.

     2.  On August 19, 1997, in connection with the Agreement of Settlement 
and Mutual Release, the Company entered into a new Technology License 
Agreement relating to the "Dynamic Steerable Spring" with a former officer of 
the Company to replace the original agreement (Note 4). The terms of the 
Agreement were amended to reduce the royalty payment from $1.00 per unit sold 
to $0.50 per unit sold.  In addition, the Technology License Agreement 
relating to the "non-pneumatic tire technology" was amended to reduce the 
royalty payment from $0.25 per unit sold to $0.125 per unit sold. All royalty 
payments are to be paid quarterly.
PAGE
<PAGE> 37
                       AMERICAN TIRE CORPORATION AND SUBSIDIARY
                            (A Development Stage Company)
                    Notes to the Consolidated Financial Statements
                                    June 30, 1997

     3.  The Company entered into a Development Agreement on September 30, 
1997, whereby an unrelated company shall provide the tire technology relating 
to shape and tread pattern and performance evaluation personnel and the 
Company shall provide the Urethane technology and personnel.  If the result of 
the testing is positive and the parties hereto are interested in the joint 
commercialization of urethane tires, then the parties shall enter into a 
separate agreement covering said commercialization.


NOTE 9 - SUBSEQUENT EVENTS (Continued)

     4.  5,500 common stock options were exercised on August 1, 1997 at $2.25 
per share.

     5.  The stock subscription receivable of $50,000 was received by the 
Company during August 1997.