We started about a year ago – in conjunction with R.T. Vanderbilt – to develop an oil that we felt could pass not only the Sequence IVA, which we now have, but also the Sequence IIIG. They are probably the two most important wear tests that industry would look at, Platinum President and CEO John T. (Cork) Jaeger Jr. told Lube Report.

While the notoriously difficult Sequence IIIG engine wear test still is pending, the engine oil containing Platinums TechroBond additive did pass the Sequence IVA engine test, the company said, which measures an oils ability to protect against valvetrain wear.

Other tests passed by the oil included the TEOST MHT-4 and TEOST 33C, bench tests that measure oils tendency to form high-temperature deposits, and the ROBO, which is a bench test that measures aged oil low-temperature viscosity. The tests are required by major automakers to assure satisfactory engine life and performance.

Engine oils typically must run through a larger battery of engine and bench tests to meet todays ILSAC GF-4 passenger car engine oil requirements, and even more tests are expected for the planned upgrade to GF-5 oils, due to reach market in mid-2010.

I think we feel our engine testing is a little bit late to be a player in GF-5, Jaeger acknowledged. The answer to entry is we need to establish relationships with people who might – if their specification was met – break from the market trend and basically go their own way. If were successful in finding that type of party, provided all the testing confirms the wisdom of doing that, we might be on the market sometime in the neighborhood of 2011, maybe even as early as late 2010. If we have to go through the industry process, or if GF-5 doesnt get extended, then Im not sure exactly what the timeline would be.

Meanwhile, Platinum is trying to attract the interest of original equipment manufacturers, claimed Jaeger. We believe there are three key ingredients the OEMs are demanding and theyre not getting, he said. The OEM wants the catalytic converter to work properly at the full range of the miles that youre guaranteed to have it operate. The OEM wants fuel efficiency, and they wont sacrifice engine oil durability.

High-mileage engine oils are another category where the company believes its additive can make inroads. We believe from the marketing we have done that there is a need for additional wear resistance in those high-mileage brands, Jaeger said. We think thats a great, great place to grow.

Regarding the new financing, an initial $750,000 was funded Sept. 22, and the second-phase $750,000 will be available at Platinums request after meeting other conditions.

The reason this is an important milestone is we decided we needed to do a financing internally, basically, Jaeger said. And at the same time, bring a valuable ally – which is the R.T. Vanderbilt Company – formally into the ownership of PRO [Platinum Research Organization].

Platinum originally had a two-pronged financing plan dating to June 2007, but the timing of that first initiative became very difficult as the credit markets crumbled, Jaeger explained. Irrespective of what you see today, a lot of the problems were beginning to be seen in the early fall. What happened was we were offered several different term sheets, none of which we could accept. We would basically be turning over the company to a bunch of different institutions, which we werent willing to do.

Instead, the financing announced Sept. 24 is now the first part of a three-pronged plan. Its an important step, but there are two steps to take beyond this, he said. That would be to go back later this year for an additional capital raise with a select group of parties, and then next year complete the capital requirement.

In addition to the financing, Platinum also reached agreement with the Seattle City Employees Retirement system to release $1.41 million restricted cash in escrow and allow Platinum to reduce the principal amount of its note payable to the retirement system from $6 million to $4 million.