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Re: Mean Weimaraner post# 25942

Tuesday, 09/13/2016 6:46:54 PM

Tuesday, September 13, 2016 6:46:54 PM

Post# of 28181
The last balance sheet they provided was for September 30, 2014: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10387513

The WHE Generation division was spun out into a separate company (later named Q2Power, QPWR) who paid $350K cash with another $150K promised later. (Q2Power claimed Cyclone failed to abide by the agreement and in April this 150K debt was cancelled.) They also paid $175K to license the Cyclone patents, which appears to have led to that other $150K receivable.

At that point in time Cyclone's order book was down to the two Mark 5 engines for Combilift. Cyclone has $300K in deferred revenue to be released when those engines were accepted by Combilift, but that hasn't happened yet. Those engines still don't work.

The $440K in inventory is the cost of all the engine parts they've made over the years. These are engines they've tested and found out don't work. This inventory only has value as scrap metal.

Of the $531K in property and equipment, about $300K was to have the land speed record car built and another $80K to have the water speed record boat built. Each was built to fit the Cyclone Mark 5 steam engine which is round and has a vertical crankshaft, so conventional engines don't fit in them. Since the Mark 5 has never been made to run right, neither the car nor the boat has ever been used. They could be sold for cash, but what is the market for a car and boat with no engines that are designed to only go in straight lines? I.e., the trailer might bring more than the boat.

A lot of the remaining property and equipment went to leasehold improvements in the building Cyclone leased from Schoell Marine (Yes, Harry's own company.) Not likely that can be sold.

Patents, trademarks and copyrights are valued at the cost to obtain them minus depreciation for a net of $365K. Patents, the ones that have not lapsed yet, are generating no revenue and aren't likely to. The current generation of Cyclone engines aren't covered by the remaining patents. Trademarks are the name Cyclone and their motto "One planet, one engine." So, not much to be sold there.

That remaining Other Asset of $559,518 is not described but it was only $2,762 at June 30, 2014. It is probably the WHE Gen/Q2Power stock Cyclone got in the spin-off. Q2Power's last 10Q said Cyclone was down to 212,500 shares of Q2Power as of April 8th. If they haven't sold any more their investment is worth $19,125 today.

Now when you look at the cash flow, total operating expenses for Q3 2014 were $1,028,699. That's a burn rate of $343K per month.

On the revenue side, at September 30, 2014 their order book contained only the Combilift order, which they still haven't filled. The next mention of any revenue was the June 23, 2016 PR saying they are getting a $225K engineering fee from FSDS of Denmark. It sounds like that is for producing two 10kW generator sets which likely means installment payments for meeting milestones rather than a lump sum. Cyclone will also need to spend quite a bit of money to have those units built. The prototype 10kW genset built for the Army cost $1.4 million.

The announcements about G2E of Mexico and 3R of Denmark have not mentioned any payments to Cyclone.

So, start at October 1st 2014 with $306K in cash, $559K in stock, a $343K per month burn rate and only that $150K receivable for revenue between then and now and extrapolate to where they must be today. There has been no word of them selling the race car or boat, nor the engine parts inventory.

What's left isn't worth much.

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