Cyclone Power Technologies, Inc. (fka CYPW)

[BuddyWhazhizname]

Here's a reason why the auditors wouldn't sign off:

NOTE 3 – INVENTORY, NET

Inventory principally consists of raw material engine parts, work in process engines, labor and overhead, net of realization, valuation and obsolescence reserves. In the aggregate it is stated at the lower of cost or market.

June 30, 2016 December 31, 2015

Raw material $ 323,224 $ 323,508
Work in process 26,289 0
Total $ 349,513 $ 323,508

We provide estimated provisions for the realization, valuation and obsolescence of our inventories, including adjustments to market, based on various factors, including the age of such inventory and our management’s assessment of the need for such provisions. We look at historical inventory aging and usage reports and margin analyses in determining our provision

Two things here:

1) Engine parts are NOT raw material. Raw material would be things like stainless steel bar and aluminum sheet that can be used to make other things, or could be sold to other companies. Cyclone engine parts can't be used to make anything else so is not raw material. Calling it raw material is fraudulent.

2) The "provisions" they talk about here are also fraudulent and the language is obviously taken from a real company's reports. A real company that SELLS products and turns inventory. Cyclone does neither so the market value of the inventory is near zero (as scrap metal). The claim of valuing "at the lower of cost or market" is clearly false.

Put a realistic value on the inventory and the Current Assets drop to near zero.

They have also greatly overvalued the IP by not revealing that more than half their U.S. patents and an unknown number of the foreign ones have expired. What remains are patents on things that just don't work. Remember the last iteration of the Mark 5 with most of the patented parts removed.

They still fail to reveal that most of the Property and Equipment is the speed record car and boat. They may have cost huge money to build, but they are worth very little since they only fit a (non-existent) Cyclone engine and would have to be heavily modified to be powered by anything else.

Take away these fictions and Cyclone total assets will be less than a tenth of what's stated. Current Assets may be as much as 1% of Current Liabilities, but are probably less.

That's why the auditors won't sign off. Harry and Frankie are determined to continue to deceive investors.