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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) 

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:

Cyclone has continued to operate the last few years by diluting the stock. A/S is 6,000,000,000 shares. Chart from ycharts.com up to August 2017:

As of December 18, 2017, there were 2,726,067,954 shares of the registrant’s common stock issued and outstanding. (Source: Q3 2017 report)

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)

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 $1.4million contract for Cyclone to build a prototype generator set based on the S-2 engine.  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, and at the end of 2017 stopped work on it.
• 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.



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".)

President of Cyclone, " We have a small accounting staff and we do not have the robust employee resources and expertise needed to meet complex and intricate GAAP and SEC reporting requirements of a U.S. public company. "

Fraudulant statement by Cyclone Dec 14, 2010 ."This first WHE-GEN-10 is currently converting exhaust heat from Bent Glass Design’s furnace into grid-tied electric power."
As of March 25, 2015 there has been no indication they have made a water lubricated engine pass this 200-hour endurance test. 

Outstanding Shares
5,292,794,585
06/14/2018
 
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CYPW
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CYPW News: Quarterly Report (10-q) 08/31/2018 01:14:06 PM
CYPW News: Notification That Quarterly Report Will Be Submitted Late (nt 10-q) 08/14/2018 11:16:34 AM
PlusOneCoin Top Posts
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PostSubject
#27800  Sticky Note No insider information, just a lot of history. BuddyWhazhizname 12/04/18 11:33:14 AM
#27851   Thank You Chuck !! I figured since bobbyknobb 01/23/19 04:15:19 PM
#27850   Schoell Marine sign is gone. ChuckFinley305 01/23/19 02:48:47 PM
#27849   Is schoell marine sign gone as well?? Thanks bobbyknobb 01/23/19 02:29:36 PM
#27848   Moved to bigger office! Megawatt gensets need Tom Swift 01/23/19 01:40:35 PM
#27847   Is this the end? ChuckFinley305 01/23/19 01:11:02 PM
#27846   Correction: frankie fruge meant 3kw NOT 3 megawatt. bobbyknobb 01/22/19 02:10:20 PM
#27845   And Frankie isn't even bothering to insult Cyclone BuddyWhazhizname 01/21/19 02:52:21 PM
#27844   Another week, still no engine. Tom Swift 01/16/19 06:44:50 AM
#27843   Oh they're probably all busy installing that 3 BuddyWhazhizname 01/09/19 02:03:57 PM
#27842   ZERO trades= Day's total Equal to cyclone's engine bobbyknobb 01/08/19 05:57:43 PM
#27841   The 1500 HP engines now running a week. Tom Swift 01/08/19 09:40:38 AM
#27840   50% CRASH on $0.29 cent sell. 6 BILLION bobbyknobb 01/07/19 01:22:33 PM
#27839   Agree totally. There was a discussion here BuddyWhazhizname 01/03/19 01:20:17 PM
#27838   NO INFORMATION..STOP.. Cyclone now has the worst rating arnold 01/02/19 08:15:21 PM
#27837   Yup, being generous, a real engine's highly unlikely. Tom Swift 01/02/19 07:18:00 PM
#27836   Recently formed "Emerging Energies Inc. Llc. and another bobbyknobb 01/02/19 07:13:26 PM
#27835   Yeah, it's like an uncharacteristic spasm of honesty BuddyWhazhizname 01/02/19 03:54:36 PM
#27834   Buddy, isn't "Schoell Cycle" SUPERCRTICAL instead of SUPERHEATED? Tom Swift 01/02/19 01:01:49 PM
#27833   Uh-oh. The Secret Investor has folded. BuddyWhazhizname 01/02/19 12:21:37 PM
#27832   So excited to see the megawatt Cyclone generators Tom Swift 01/02/19 07:40:58 AM
#27831   With only 20 cents worth of trades all arnold 12/29/18 09:17:01 AM
#27830   $0.20c ALL DAY VOLUME TOTAL! 20 CENTS. wow bobbyknobb 12/28/18 07:02:03 PM
#27829   No matter what you believe in. Or bobbyknobb 12/28/18 04:37:24 PM
#27828   Then there were the other "sponsors" Cyclone claimed. Tom Swift 12/28/18 02:12:10 PM
#27827   More sleeze from Frankie Fruge. On their BuddyWhazhizname 12/28/18 01:16:03 PM
#27826   HA HA HA...loose lips, a con goes heywire response=LOL bobbyknobb 12/27/18 03:11:47 PM
#27825   Frankie's just building the suspense for the big BuddyWhazhizname 12/27/18 11:43:06 AM
#27824   Lookie what I found at FB...a real dialogue.LOL bobbyknobb 12/27/18 10:43:08 AM
#27823   She can't spin the situation, they are too Tom Swift 12/21/18 01:16:12 PM
#27822   10 days to year end. BuddyWhazhizname 12/21/18 12:28:21 PM
#27821   6 Billion shares out. Zero trades today !!! bobbyknobb 12/20/18 07:15:28 PM
#27820   CYPW - DON'T BUY uniquealias 12/20/18 06:37:07 PM
#27819   I already bought some actually uniquealias 12/20/18 06:34:58 PM
#27818   Buy! Megawatt generators selling below market cost, soonest! Tom Swift 12/18/18 08:50:07 PM
#27817   CYPW - BUY trader53 12/18/18 07:12:28 PM
#27816   Maybe those Mark 10s are busy powering their BuddyWhazhizname 12/17/18 12:46:22 PM
#27815   15 Days to year end. For the fiscal arnold 12/16/18 08:43:59 AM
#27813   Where's the video? :-) With delivery Tom Swift 12/14/18 01:20:13 PM
#27812   Steam powered robots !! No kidding. RTI, MEO, bobbyknobb 12/11/18 02:36:21 PM
#27811   Yep, it's always been part of the story. BuddyWhazhizname 12/11/18 12:11:01 PM
#27810   Buddy is of course 100% on the history bobbyknobb 12/10/18 02:06:10 PM
#27809   Making a super critical steam engine work is BuddyWhazhizname 12/10/18 12:47:44 PM
#27808   Harry and fruge claimed in 2007 to already bobbyknobb 12/09/18 04:01:47 PM
#27807   Anadrome, if you have known Harry and Frankie arnold 12/09/18 09:15:46 AM
#27806   I have known Harry and Frankie since around Anadrome 12/09/18 02:53:04 AM
#27805   Mark of a true CONman....The qualified (engineers) never bobbyknobb 12/07/18 03:18:22 PM
#27804   Yeah Arnold...I recall harry and fruge trying to bobbyknobb 12/07/18 03:11:44 PM
#27803   If you remember the only reason they didn't arnold 12/07/18 03:33:10 AM
#27802   Lessee, the 100 hp Mark 5 was going BuddyWhazhizname 12/06/18 11:44:56 AM
#27801   Bonneville LOOK OUT! once the 1500 HP engines Tom Swift 12/05/18 06:46:59 PM
PostSubject