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Cyclone Power Technologies, Inc (CYPW)

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Cyclone Power Technologies, Inc  

Website: http://www.cyclonepower.com       Facebook           Filings at the SEC       Filings at OTC Markets (including pre-SEC filings) 

NEWS: HAS CYCLONE CLOSED DOWN?

Photo of their building, January 2019,  Cyclone sign has been removed. 
They have still not filed the Q3 2018, 2018 annual or Q1, Q2 or Q3 2019 reports.
Their website gives financial information that is years out of date. 
The investor funding their last announced project, a 3 megawatt solar power system, turned out to be a small startup in Utah that apparently closed down in the summer of 2018
No deliveries of the Mark 1, Mark 3, Mark 5 or Mark 10 engines were made by the end of 2018, or since, as announced in a July 2018 press release
There has still been no public demonstration of a running Cyclone engine.


(A message on this board claimed a photo from February 2019 showed a Cyclone sign was still on the building, but that person never explained how they were able to quote a non-public message from Cyclone president Frankie Fruge.)

Business:

Cyclone describes themselves as a research and development company who have developed a modern steam engine.  They have produced some prototype engines, but have no commercially available products and have never publicly demonstrated a running engine.

History:

Chairman and CTO Harry Schoell had spent many years in the powerboat industry.  His company, Schoell Marine, occupies a 6000 square foot building in Pompano Beach, Florida.  Schoell has no education beyond high school and describes himself as an inventor.  In the early 2000s he experimented with steam engines. In an article in Professional Boatbuilder magazine April/May 2016 page 29 Schoell explained the reason he created Cyclone Power Technologies:

The past 10 years he has devoted his mind and resources to compact steam engines. "We wanted to build a clean-air multi-fuel engine, because it fit the times and the marine industry was faltering," he says.

After Cyclone Power started raising money from investors, Schoell had Cyclone lease the entire Schoell Marine building and enter a services contract with Schoell Marine, his privately held company.

Use of Funds:

  Research &
Development
General &
Adminstrative
Property &
Equipment
Notes
2007 Annual Report 814,685 674,774 14,777  
2008 Annual Report 1,090,911 1,139,878 19,695  
2009 Annual Report 1,115,795 1,332,757 78,130 1
2010 Annual Report 830,611 1,241,379 83,784  
2011 Annual Report 983,276   2,628,835 108,243 2
2012 Annual Report 1,091,501 2,203,713 376,177 3
2013 Annual Report 772,795 2,100,104 376,763  
2014 Annual Report 845,499 1,890,152 163,166  4,5
2015 Annual Report 275,610 653,103  126,520 4
2016 Annual Report 478,299 967,706 93,272 6
Q3 2017 Report 162,462 856,934 72,517  
Totals 8,461,444 15,689,335      
Notes:
1: $39,953 of the increase in property and equipment was leasehold improvements
     to Harry Schoell's building.
2: $27,751 of the increase in property and equipment was leasehold improvements
     to Harry Schoell's building.
3: Equpment increased 270,396 with no explanation.  This was the year Cyclone
     had a land speed record race car custom built.
4: The 2014 report was filed two years late.  The 2015 report was filed one year late. 
     Cyclone switched to new auditors for these reports.  There were large write-downs
     of the value of inventory, which were added to the R&D expenses.  The numbers
     given here are the actual R&D spending in each year.
5: By 2014 total leasehold improvements on Harry Schoell's building had reached $93,922.
6: Cyclone again switched auditors.  R&D is net of inventory provisions.

Even though Cyclone claims to be an R&D-only company, for every dollar spent on R&D, almost two dollars have been spent on General & Administrative. (In 2017 the ratio had increased to $5 on G&A per dollar of R&D.) That spending has never been broken down, but the only place most of it could have gone is into the services contract with Schoell Marine.  In addition, it is likely a large part of the R&D spending went to Schoell Marine.  No commercial products have resulted from this spending.

When questioned on these numbers, Cyclone President Frankie Fruge has stated (comment #18) "Again fuzzy numbers. You need subtract accrual (salaries we have never taken and derivatives which is another number that represents volatility and is not money) they choice [sic] to only tell part of the story."  Note that derivative losses are a separate item in the balance sheets, totalling more than $30 million in additional losses, and are not included in the above figures.  President Frankie Fruge and CTO Harry Schoell have accrued salaries, some of which has later been treated as loans to Cyclone and paid back to the two.  The remaining forgiven salaries by the two represent a small portion of the unexplained General & Administrative expenses.

Dilution:

The number of shares outstanding of the registrant’s common stock as of May 15, 2018 is 5,292,794,570 (Source: 2017 annual report, the last reported data.)

Technology:

The Cyclone engine is a piston steam engine, with the majority of models in a 6-cylinder radial configuration.  All models attempt to use water, instead of oil, as the engine lubricatant.

Patents: Cyclone has touted numerous U.S. and international patents on their technology.  The have, however, never demonstrated a working product that used the patented technology.  Most of the Cyclone patents have expired for non-payment of maintenance fees.

Engine Models: The announced models have been the Mark 4 (2004), Mark 2 (2004), Mark 5 (2007), Mark 6 (2007), Lawnmower (2007), Waste Heat Engine (WHE) (2008), Genie (2009), Solar-1 (2009), S-2 (2011), Mark 3 (2014), Mark 1 (2014), Mark 7 (2016), Mark 10 (2018).  The pattern is announcements of a new model, often with claims of customers, and predictions of production starting soon.  As time passes and no engines are produced, new engine models are announced and the cycle repeated. 
Delivered Engines:

• In 2008 Cyclone sold a WHE engine to Bent Glass Designs of Pennsylvania.  It was finally installed and started in 2010.  Years later, Cyclone admitted that it had been removed within a week and never replaced.
• In 2009 Robotic Technology Inc of Maryland was awarded a DARPA (Defense Advanced Research Projects Agency) contract to develop an autonomous robot that could fuel itself from wood, grass, etc., that it foraged in the field.  Cyclone won a sub-contract from RTI to provide a steam engine.  (Cyclone has portrayed this as having been awarded a DARPA contract, which was not the case.)  By the time Cyclone delivered the engine, the project funding had run out and there is no evidence RTI ever ran the Cyclone engine.
• In 2011 Raytheon ordered two Mark 5 engine variants called the Manta Ray.  These were delivered in 2012 and there has been no further word about them, and no follow-up business from Raytheon. There is no evidence Raytheon has run these engines.
• In 2011 the U.S. Army awarded a $1.4 million contract for Advent Power Systems of Florida to build a prototype generator set based on a Cyclone S-2 engine.  In 2012 Cyclone purchased the contract from Advent.  The prototype was delivered, years late, in 2014.  Cyclone claimed it met the Army's acceptance criteria, but never revealed what those criteria actually were.  There is no evidence the Army ever ran this engine. 
• In 2016 Cyclone delivered a Mark 3 engine to 3R of Denmark.  3R soon folded, with assets going to IBES of Dubai.  IBES has not been able to make the system work acceptably, and at the end of 2017 stopped work on it.  A video exists showing just how little power the Cyclone engine was able to produce.
• In 2016 Falck Schmidt Defense Systems (FSDS) of Denmark ordered two S-2 generators, with the requirement they must operate for 10 hours before being accepted.  Cyclone delivered one engine in 2017 without it having met the run-time requirement.  FSDS then went bankrupt.  There is no evidence they ever ran the Cyclone engine.

Of these few engines ever delivered by Cyclone over the years, only IBES has reported operating an engine, and then at much lower speed and power than Cyclone rates the engine for.

Failure of Water Lubrication:  A fundamental design feature of the Cyclone is that oil cannot be used to lubricate it, as is done in every other engine on the market.  It must use bearings that are lubricated with water.  In 2013 Cyclone hired the Ohio State University Center for Automotive Research (OSU-CAR) to fix the problems preventing the low-power WHE engine from working properly.  OSU-CAR immediately redesigned the engine, eliminating three cylinders and creating the WHE-DR model that had 60% fewer parts and significantly reduced vibration and noise.  Although they anticipated the engine would soon meet the 200 hour run time requirement of customer Phoenix Power, bearing failures became the next critical failure.  OSU-CAR concluded no available water-lubricated bearings would survive in the Cyclone engine and proposed building a bearing test machine and starting a series of experiments on bearings.  Cyclone then stopped funding the work.

Later models of Cyclone engines returned to the 6-cylinder configuration that OSU-CAR had abandoned as a bad design.

Failure to Run 10 Hours:  Contracts for engines have specified that engines must run 200 hours before acceptance (2010), 50 hours before acceptance (2013), and finally just 10 hours before acceptance (2017).  Financial disclosures show that final payments on these contracts have not been made, showing no Cyclone engine is known to have run for 10 hours under load without failing.

Example of Cyclone Engine Actual Performance

Customer IBES of Dubai spent the second half of 2016 and all of 2017 trying to make a Cyclone Mark 3 generate electricity from the steam from a wood-fired boiler. 

The video they posted is the only known time someone outside of Cyclone has run a Cyclone engine.

The arrow in the picture points to three small light bulbs, dimly lit.  This represented the power output of the Cyclone engine.

The close-up of the pressure gauges shows pressure values of 900-1200 psi, so there was no lack of steam pressue available to run the engine.

In an email exchange, the IBES manager said:
"The maintenance schedule we have got from Cyclone states that the key moving parts has a lifecycle of 30,000 hours (bearings, control valve). The block, cylinders and crank shaft has an indefinite life time. Some ‘consumables’ has a maintenance schedule of 5,000 hours. This applies to piston rings, seals and the seat for the control valve. Belts and water filters a schedule of 2,000 to 3,000 hours. "
Cyclone made these claims of many thousands of hours of part life to a customer without ever having been able to run an engine for just 10 hours without self destructing.

IBES closed down at the end of 2017 due to their inability to make a viable product using a Cyclone engine.

Click on image to go to the video.
 


Recent (2016) photo of the inside of Cyclone's facility.


CTO Harry Schoell and former President Christopher Nelson, photo from 2011 Cyclone Shareholder Open House (The event where Schoell told investors that all the technological problems with the Cycone engine had been "overcome".)
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PostSubject
#28013   It's trash once it can't lure more suckers Tom Swift 09/17/20 01:35:08 PM
#28012   Buddy, Rumor has it that the fancy truck chassis ChuckFinley305 09/16/20 03:09:46 PM
#28011   $6000 sounds about right. They've got a BuddyWhazhizname 09/11/20 11:56:21 AM
#28010   Market value of $6,000??? Tom Swift 09/04/20 01:29:50 PM
#28009   I read into this more. This stock Briboy 09/02/20 02:03:17 PM
#28008   This is the first I heard of this Briboy 09/02/20 01:56:40 PM
#28007   Water-Lube failed due to covid 19. The spider-bearing bobbyknobb 08/14/20 10:54:03 AM
#28006   The SEC only put a temporary suspension on BuddyWhazhizname 07/31/20 09:51:10 AM
#28005   Hmmm.... I thought trading was suspended on this stock. Tom Swift 07/28/20 02:12:08 PM
#28004   Wow, what manufacturing facility is it this time? Tom Swift 07/28/20 06:36:00 AM
#28003   How does a 2 person company downsize? ChuckFinley305 07/27/20 11:39:02 AM
#28002   The crooks are leaving the building: BuddyWhazhizname 07/25/20 02:09:05 PM
#28001   Tesla has 4th Q in Profits..enter the S&P bobbyknobb 07/24/20 08:26:46 PM
#28000   TSLA electic cars up 286% in share price bobbyknobb 07/22/20 03:57:49 PM
#27998   CYPW SEC Suspension for severely delinquent Financials: Renee 07/01/20 09:51:12 AM
#27997   Cyclone posted on Facebook claiming they are not ChuckFinley305 05/01/20 02:58:47 PM
#27996   They didn't note the trough wasn't Cyclone's! Tom Swift 03/23/20 07:14:38 PM
#27995   More astroturfing from Cyclone. BuddyWhazhizname 03/20/20 02:26:42 PM
#27994   July 30, 2009: First two Mark V engines BuddyWhazhizname 02/19/20 10:44:00 AM
#27993   Cyclone Power Techno (CYPW) ChuckFinley305 02/14/20 08:57:41 AM
#27992   []Currently Crashed down 99% at $0.00000 on 4K bobbyknobb 02/03/20 10:50:07 AM
#27991   Cyclone Power Techno (CYPW) ChuckFinley305 01/08/20 11:34:30 AM
#27990   Wow! Simply Wow!!! A twenty-cent transaction! I can't Tom Swift 01/08/20 11:00:43 AM
#27989   Absolutely! You can go up from zero... Tom Swift 01/07/20 10:37:55 AM
#27988   Currently at zero. Still over-priced!! bobbyknobb 01/06/20 03:38:18 PM
#27987   One wonders how this is even possible: BuddyWhazhizname 01/06/20 10:34:02 AM
#27986   Deserting a sinking ship. When someone sells Tom Swift 12/31/19 06:14:43 PM
#27985   Yeah, they would have gotten more light by BuddyWhazhizname 12/13/19 12:51:10 PM
#27984   Bobby, it's the noisiest engine per kilowatt-hour, ever! Tom Swift 12/13/19 12:13:21 PM
#27983   Yeah Buddy....but what were they burning and bobbyknobb 12/12/19 05:43:54 PM
#27982   Oldie but goodie: IBES running their Cyclone engine BuddyWhazhizname 12/12/19 02:02:30 PM
#27981   Yeah, the exchange had to add zeros to BuddyWhazhizname 12/12/19 12:24:41 PM
#27980   Currently down crash 99% on huge volume. (for bobbyknobb 12/11/19 01:30:55 PM
#27979   Yep, their biggest achievement has been building fake BuddyWhazhizname 12/03/19 12:58:35 PM
#27978   As Tom mentioned, this is very laughable! ChuckFinley305 12/03/19 11:15:34 AM
#27977   Yet again, pathetic conspiracy theories and sad excuses. Tom Swift 12/02/19 01:54:12 PM
#27976   Yep, still working on "commercialization"... BuddyWhazhizname 12/02/19 10:41:31 AM
#27975   Tom, I am sure they are only 6 months ChuckFinley305 11/19/19 03:12:42 PM
#27974   Hard times for Cyclone when the pumpers disappear! Tom Swift 11/19/19 11:53:32 AM
#27973   I once heard someone say that if you BuddyWhazhizname 10/30/19 12:57:56 PM
#27972   You can't help wondering about his credibility, Buddy. Tom Swift 10/29/19 02:40:58 PM
#27971   Cyclone paid him long enough to get quotes BuddyWhazhizname 10/29/19 09:53:52 AM
#27970   What happened to the "turnaround genus" John Flynn?I Oldman3 10/26/19 12:25:17 PM
#27969   What happened to the "turnaround genus" John Flynn?I Oldman3 10/26/19 12:24:43 PM
#27968   Oh the land speed race car. The BuddyWhazhizname 10/25/19 09:57:34 AM
#27967   Even the trailer was a lie, Chuck. Tom Swift 10/18/19 09:49:20 PM
#27966   Ever wonder what happened to the "running sweet" ChuckFinley305 10/17/19 04:08:42 PM
#27965   Total Volume for entire day. 100 shares.=1 Cent=$0.01. bobbyknobb 09/24/19 04:53:59 PM
#27964   The heat regeneration figures really are mysterious, Buddy. Tom Swift 09/11/19 09:05:35 AM
#27962   Yeah, they do have difficulty keeping their lies straight. BuddyWhazhizname 09/09/19 10:50:06 AM
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