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Cyclone Power Technologies, Inc (CYPW)

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Last Post: 3/7/2021 2:50:27 PM - Followers: 236 - Board type: Free - Posts Today: 0

Cyclone Power Technologies, Inc  

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

CYCLONE HAS EFFECTIVELY CLOSED DOWN.

They vacated the building at 601 NE 26th Ct Pompano Beach, FL in June 2020.  (It is now leased to a used car dealer.)  The registered business address is now the home of Harry Schoell and Frankie Fruge.
The last SEC filing was for Q2 2018.
Their website hasn't been updated since 2017.
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
There has still been no public demonstration of a running Cyclone engine.

 

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.
 


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


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
#28063   That argument may fool other people. It sounds Timingpennies 03/07/21 02:50:27 PM
#28062   Except that you're comparing apples to coconuts.The CRD BuddyWhazhizname 03/06/21 11:31:36 AM
#28061   Before retiring I worked in the Nuclear Power Timingpennies 03/05/21 08:15:56 PM
#28060   UNITED STATES OF AMERICA samsamsamiam 03/02/21 10:19:07 PM
#28059   I admit; bought a block of shares Briboy 02/25/21 10:55:11 AM
#28058   I admit; bought a block of shares Briboy 02/25/21 10:55:10 AM
#28057   Yep, Frankie's still lying to investors. BuddyWhazhizname 02/23/21 05:37:18 PM
#28056   The danger here for the small investor is BuddyWhazhizname 02/12/21 11:07:29 AM
#28055   The only news that would start an increase ChuckFinley305 02/12/21 07:34:42 AM
#28054   I trade off charts mostly. Minor DD. I'm Timingpennies 02/11/21 04:29:48 PM
#28053   Do you think this is the only stock that Briboy 02/11/21 03:45:17 PM
#28052   Without telling you exact, which Briboy 02/11/21 03:22:36 PM
#28051   an 8 year old video,no office, or shop, bobbyknobb 02/11/21 11:29:26 AM
#28050   If you don't mind me asking, how many Timingpennies 02/11/21 09:49:48 AM
#28049   My post back in September 2020 was not Briboy 02/10/21 01:49:48 PM
#28048   I just called 5 in my study and Briboy 02/09/21 02:18:11 PM
#28047   Can you say .0004 ? Briboy 02/09/21 09:29:44 AM
#28046   I did recently. Am going to buy more. Briboy 02/09/21 09:29:12 AM
#28045   Yes others and I have in recent months Briboy 02/04/21 07:18:45 PM
#28044   Anyone bought this lately? Timingpennies 02/04/21 07:09:24 PM
#28043   .0003 again today. I am thinking about Briboy 02/04/21 03:13:07 PM
#28042   nope Briboy 02/03/21 04:08:55 PM
#28041   I have some faith that this stock is Briboy 02/03/21 04:05:41 PM
#28040   Those this stock have any ties to ECOS Tropi12 01/30/21 08:42:51 PM
#28039   That's the only thing I can think of. BuddyWhazhizname 01/29/21 12:30:34 PM
#28038   It is the only thing left for Cyclone ChuckFinley305 01/28/21 11:53:10 AM
#28037   You think that maybe they are just trying Tom Swift 01/28/21 11:30:56 AM
#28036   Someone is actually spending money on this stock. BuddyWhazhizname 01/27/21 11:25:52 AM
#28035   I don't know fellas that RSI is looking Wolfofwitz 01/26/21 03:19:20 PM
#28034   HEY OL' DOCJ2222 IDES OF APRIL bobbyknobb 01/12/21 07:46:05 PM
#28033   lET US ALL REMEMBER FRANKIE FRUGE AND HARRY bobbyknobb 01/09/21 04:21:31 AM
#28032   There is still some value in the shell. BuddyWhazhizname 12/31/20 12:04:06 PM
#28031   Yep, Elvis has left the building. BuddyWhazhizname 12/31/20 11:39:31 AM
#28030   Better check your facts.... ChuckFinley305 12/29/20 02:39:29 PM
#28029   2 YEARS AGO LIKE THE FIN. FIL. SCAM....PERIOD. bobbyknobb 12/29/20 02:42:39 AM
#28028   LIES !!!!! bobbyknobb 12/29/20 02:41:17 AM
#28027   8 MONTHS OLD FB POST MEANS DEAD SCAM bobbyknobb 12/29/20 02:40:14 AM
#28026   ...A YEAR AND 1/2 AGO IS POOR DD SON. bobbyknobb 12/29/20 02:38:11 AM
#28025   Current Facebook post... ddabetsmallwinbig 12/28/20 01:45:13 PM
#28024   Here is the pic ddabetsmallwinbig 12/28/20 01:41:42 PM
#28023   Pic from google map 4/2019 still shows sign ddabetsmallwinbig 12/28/20 01:02:49 PM
#28022   20,000,000 shares? Gotta idly wonder what manipulation Tom Swift 12/23/20 02:20:27 AM
#28021   Without their state-of-the-art labs, how will they go on???? Tom Swift 10/22/20 06:29:49 AM
#28020   Oh, I dunno Bobby. Maybe the boat BuddyWhazhizname 10/19/20 10:52:08 AM
#28019   Pre-foreclosure? Well, doesn't that just figure. BuddyWhazhizname 10/19/20 10:47:37 AM
#28018   Yeah Buddy !!! From afar it looks bobbyknobb 10/16/20 04:31:36 PM
#28017   Buddy, Its showing up as a pre-foreclosure. Looks like ChuckFinley305 10/16/20 01:28:01 PM
#28016   Looks like Cyclone is leaving town. BuddyWhazhizname 10/13/20 11:13:25 AM
#28015   Yep, they changed the company name to QSAM BuddyWhazhizname 10/13/20 10:46:32 AM
#28014   The chris nelson cypw spinoff 25 for bobbyknobb 09/29/20 12:24:12 PM
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