Notes paid off? Not likely.
Cyclone has no sales, no revenue. Their only order on the books is for the two Mark 5 engines for Combilift. These engines were supposed to be delivered in June 2012, so now are closing in on the third anniversary of being late.
These are the engines that only need to run for 50 hours without breaking down before they ship.
But Cyclone does have significant overhead costs ($1029K in Q3) and interest expenses ($281K in Q3).
Add in two more quarters of these expenses with no revenue and you get an idea of where they are financially now.
They've been selling convertible notes to raise cash to keep going. The only way they would be able to pay off existing notes is to sell new ones.
One problem they've got is the 300% reserve requirement on stock. The notes typically convert at 58% of the two lowest closes in the last 10. Right now the two lowest closes average $0.00045, times 58% is $0.000261, or 3831 shares per dollar.
A 300% reserve means Cyclone must hold 11494 shares for every dollar in note value.
At the end of Q3, they had $313,920 in notes outstanding. The required reserve for that is now 3,608,275,862 shares, or almost double the authorized.
Just the face value of those notes would be 1.2 billion shares now.
I doubt anyone has bought a new Cyclone note for a while now. That means they have had no source of cash.
They haven't updated the Facebook page since February 24th, which is almost 10 weeks now.
Quite a long time as your stock is going down the drain, don't you think?
