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The "award-winning Cyclone Engine" doesn't exist. Just "award-winning" pretend engines.
Inventor Harry Schoell made some shiny non-functional mockups of what he thought his engine should look like, then told people they were real engines with great performance.
He made a mockup lawn mower and weedeater that cut grass silently. A mockup powerboat that is going to set the world speed record for steamboats, and a mockup land speed racer car that will set the world record for steam cars.
He made a toy tractor, tank, ship and locomotive with toy mockup engines and told people how powerful and fuel efficient they were going to be.
He sold two Mark 5 engines, after getting the awards, then tried to build a Mark 5 engine that actually ran.
He's still working on it, all these years later.
Dilution is what should be feared.
Here's the history:
Cyclone stopped filing reports so we don't know what happened after 2014. But there are some hints.
In November 2014 the A/S was increased from 900,000,000 to 2,000,000,000 shares.
A year later in November 2015, Cyclone said (near the bottom)"Additionally we had to increase our authorized common stock levels to accommodate the convertible contracts that obligate the Company."
That means the A/S is well over 2 billion shares now.
Match up trading with PRs being issued and the pattern is a spike in trading but either no increase in price or a decrease. Put out a PR and dump new stock for some cash.
There have been several attempts to pump CYPW on this board and the pattern every time has been a bump in price for a day or two then a drop after heavy trading.
Cyclone has been raising cash for years by selling convertible notes, then printing more stock when the notes come due. So not only is Cyclone dumping stock into the market for cash, but so are the note holders.
If the price starts to go up, the floodgates open.
The key: "to keep our current listing."
Cyclone isn't planning to file because business is good, they are doing it to avoid beind delisted.
The SEC probably gave them a warning with a deadline to become current or a stop trade order would be issued.
They've said a few times over the last two years they would file unaudited financials, and since President Frankie Fruge's bio claims she was an auditor at Ernst&Young, it would have been easy for them to file.
They didn't because they don't want the market to know just how bad things are how much stock they've issued.
It will be interesting to see what comes first: the filings or the stop-trade order.
Actually, not filing will be better for the stock price.
The PRs have always predicted Great Things real-soon-now. For instance, they predicted engine production would start in 2008. Since then the PRs have made constant predictions of engine production starting in the next six months.
None of these predictions have come true. They hide behind the 'safe harbor' disclaimer.
The SEC filings, on the other hand, could land them in jail for stock fraud so have been somewhat more honest.
For instance, Cyclone sold a system to Bent Glass Design in November 2008. Over the next two years Cyclone put out 10 PRs about how great this system was going to be and finally announced it was started in December 2010.
Then silence.
It wasn't mentioned again until years later in a filing that the Cyclone system was removed from the customer's site after a couple of weeks and never returned.
New filings will show Cyclone is basically broke and has been surviving by diluting the stock. At least one creditor has obtained a judgement worth more than Cyclone's total assets. Their engine designs are still in "beta testing", which means they have never been able to run for 50 hours without breaking down.
The truth about their operations can't do anything but damage the stock.
No, 2/3rds of Cyclone's US patents are expired.
20090223479 is not a patent, just an application. Its Status in the USPTO Public PAIR database is "Abandoned -- Failure to Respond to an Office Action" as of 05-09-2011.
"Clearance volume valves in a heat regenerative engine", application 20070256415, was also abandoned by Cyclone.
The assignment of Cyclone patents to TCA Global Capital was because TCA loaned money to Cyclone and siezed ownership of the patents as collateral.
Here are the U.S. patents taken out by Cyclone.
7,992,386 Waste heat engine Sep 29, 2015 Expired due to failure to pay maintenance fee
7,900,454 Connecting rod journals and crankshaft spider bearing in an engine Apr 28, 2015 Expired due to failure to pay maintenance fee
7,856,823 Pre-heater coil in a heat regenerative engine
7,856,822 Heat regenerative engine
7,798,204 Centrifugal condenser Nov 11, 2014 Expired due to failure to pay maintenance fee
7,784,280 Engine reversing and timing control mechanism in a heat regenerative engine Oct 21, 2014 Expired due to failure to pay maintenance fee
7,730,873 Valve controlled throttle mechanism in a heat regenerative engine Jul 29, 2014 Expired due to failure to pay maintenance fee
7,407,382 Steam generator in a heat regenerative engine Sep 5, 2016 Expired due to failure to pay maintenance fee
7,080,512 Heat regenerative engine
The lapse of the steam generator patent isn't in Google yet. It is listed in the USPTO Public PAIR database, but that doesn't seem to allow direct links.
6 of 9 of Cyclone's U.S. patents have been allowed to lapse for non-payment of fees. Of course, after all these years Cyclone has never been able to demonstrate any of those inventions worked well enough to justify keeping the patents, either.
As for other patents citing Cyclone patents as prior art, that only means some aspect of their patents is similar to some aspect of Cyclone patents. Usually it means they improved on some weakness of the Cyclone patent.
Where are these Raytheon multiple patents you speak of?
Raytheon has one patent citing Cyclone: https://www.google.com/patents/US8863520
The Cyclone patent was "Cited by examiner", i.e., U.S. Patent Office examiner, not Raytheon.
The lead inventor is Kevin Bowen. He was an Engineering Fellow for Advanced Technology at Raytheon Integrated Defense Systems, and the sponsor of the submersible project at Raytheon. Here is him explaining his dream at Cyclone in December 2011: https://vimeo.com/34571193
His dream of a long range submersible required a small steam engine. Cyclone's engine was the only steam engine design that potentially could fit this application. So Raytheon went to Cyclone.
Note the patent application was filed July 19, 2012, but Raytheon only got their engines in June of 2012. The patent was written long before Raytheon had any results from their Cyclone engines.
But it doesn't matter much, because the project sponsor at Raytheon, Kevin Bowen, retired in June 2013. His project retired with him. Raytheon never went back to Cyclone.
There is also a misconception that a patent means the device actually works. This is not true. The Patent Office does not evaluate the technical effectiveness of an invention, except when the inventon claims to be cold fusion or a perpetual motion machine (although many of these do get patents anyway). The device only has to show it would be useful if it works the way the inventor describes it to work. Harry Schoell described the Cyclone engine as producing power from fuel, and if it actually does what he says it would be useful. That qualified it for the patent.
The fact is, though, the main Cyclone patent US7080512 "Heat regenerative engine" was filed September 13, 2005, and Cyclone has yet to demonstrate one powering anything.
All failures.
Most of the patents have expired for failure to pay maintenance fees.
The "Schoell cycle heat regenerative engine" has never been demonstrated to work, not after 12 years and more than $25 million in operating losses sunk into its development.
Raytheon took delivery of their two prototypes in 2012 after delays, but got stripped down, low performance engines rather than the high performance engines promised. Raytheon never mentioned those engines or that project since.
The Mark 5 engine covered by the patents was originally promised for delivery to a customer in January 2010. Cyclone ended up paying out $400,000 in late delivery penalties before that customer cancelled the order.
Combilift of Ireland ordered two Mark 5 engines in September 2011 for delivery in July 2012. The engines are required to run for 50 hours without failure before Combilift will accept them. The engines still haven't been made to run for 50 hours. They still aren't delivered.
Meanwhile, Cyclone has stripped almost all the patented features of the Mark 5 engine in an attempt to make it work right. The last mention of work being done on the Mark 5 engine was in February 2015 (
Hey Creston, the deal there was Cyclone sold the plans for the solar collectors and thermal storage unit to the folks in Mexico and they were to build them.
When they do they will quickly discover Harry's plans are gibberish.
The Cyclone Solar presentation is at https://docs.google.com/presentation/d/1872jck-mwkGyMjEcU_6gM4X5msvIeKqmPZxfINMQNio/embed?start=false&loop=false&delayms=3000
Slides 7 and 8 prove that Harry is just as ignorant about the thermodynamics of solar systems as he is of engine systems.
The temperature of the thermal storage unit is shown as 1150F and 1050F. It is simply impossible for trough collectors of the size shown to reach that temperature.
The low temperature tank is shown at 300F to keep the salt mixture molten. How does one melt the salt in the first place?
Where do you get this "vacuum insulation" that will withstand such temperatures?
What kind of pump do you use to pump molten salt and where do you buy one of this small of a size?
How do you keep the salt from freezing in the pump, pipes and collectors at night? The pump pushes salt into the collectors, and the only way to get the salt out is to pump more in to push it out.
There are some major plants using this technology. One in Arizona has 24,000,000 square feet of collector area and 280 MW capacity. So Harry, not knowing any better, just took the schematic of such a system and scaled it down by a factor of 100,000 for his Mark 1 engine.
Basically, it's the same scam as pulled on Revgine, Great Wall, Topline, Renovila, etc. Sell them the plans to something that Harry dreamed up and never actually tried to build himself. Issue lots of press releases claiming how "ingenious" Harry Schoell is, then sweep it under the carpet as each customer fails and disappears.
Even reading from a script Frankie gets it wrong.
The engine is not hooked up to the dynamometer (the "dino meter").
The "17 second" start up was on a fully warmed up system. Watch how long it takes for steam to come out of that drain tube on the ground.
And best of all is that shot of the mechanic having to push start the engine to get it going:
Just before that he worked a lever back and forth and the engine moved a little, but did not start.
Notice those four big black fans on the radiator/condenser. The round white thing is another smaller fan. Given that big overflow bottle is half full of water, they are obviously still having trouble with condensing even for their littlest Mark 1 engine not even connected to the dyno.
The Mark 1 is supposed to produce 5 horsepower, but once you subtract the power used by the feed pump (a pressure washer pump), those five radiator fans, a blower for the boiler air and the compressed air for the fuel feed, I wonder how much, if any, power would be left over. It could very well be taking more power to run the engine than it is capable of producing.
And we see 70 seconds of a shaft turning. Is that a new record for a Cyclone engine video? They all seemed to be around one minute.
Cyclone's motto should be, to paraphrase Bugs Bunny, "We know this violates the Laws of Thermodynamics, but fortunately for us we never studied law."
Remember that truck chassis with the mock-up Mark 6 engine? Harry would explain how with all the patented "heat regeneration" built into the engine it converts every possible bit of heat energy into work. Then he would point to the WHE engine mounted on the exhaust and say it would extract even more energy from the exhaust. His contradiction seemed to escape him.
There are places where waste heat is at a high enough temperature that the WHE concept might be viable, such as the glass furnace exhaust at Bent Glass Designs, the first and only installation of a WHE engine. Q2Power's plan was to burn waste methane from sewage plants to make steam, so their application wasn't waste heat.
The bigger problem than the potential economics and payback, though, is the fact that Cyclone engines just don't work for more than minutes without failure.
When you figure it's now 12 years since Cyclone started and their operating losses are over $25 million, Q2Power's losses are over $6 million over two years, Ohio State University redesigned the WHE engine to make it reliable, not to mention all the other partners (Revgine, Great Wall, Raytheon, Topline, etc.) who did development work on the engines, and they have still not demonstrated an engine capable of running for 200 hours under part load, their former chief technical advisor's name for them, "Delusions-R-Us" comes to mind.
In fact, there has never been a public demonstration of an engine running for one hour under no load, let alone one powering something.
Chris Nelson watched failure after failure for years at Cyclone while continuously predicting production would soon start. He's the one quoted in the stories about Cyclone's factory in Ohio. And he still misleads investors. All their marketing, including yesterday's PR says this technology is ready to deploy, e.g.:
Q2Power's current pilot staged combined heat and power (CHP) technology can be deployed with minimal time and expense at thousands of small-scale facilities that must dispose of waste such as methane, biogas and other used fuels at increasingly greater costs and regulatory burdens.
The Schoell WHE formally bites the dust.
Two years ago Chris Nelson, then Cyclone's President, spun the Cyclone WHE (waste heat engine) division out into a new company, Q2Power. He was going to make zillions building these engines.
Q2Power's latest quarterly report shows that dream has died.
Their operations in Ohio are now closed. Staff was fired in May and the building lease terminated in June. Most of the tangible assets went to paying off the bill from Precision CNC for machined parts and rent. Q2Power has only $7,700 in furniture and shop equipment left, and that's after going through more than $6 million in two years.
The Ohio operation was the 'factory' they announced three years ago that was going to be employing 80 people and turning out 1500 engines per month by now.
They never demonstated a running WHE engine. They put a prototype power system at a waste water treatment plant, and have not said one word since about its performance. They sold a system in January for May delivery, but there is no word on construction even starting on it yet. The contract with Phoenix Power that would pay them $150,000 when an engine runs at part load for 200 hours has still not been paid out.
And now they have changed their business model from building generating systems to buying composting facilities. (No doubt manure is something Chris Nelson does have a clue about.)
The Harry Schoell water-lubricated steam engine has not only been a total failure under Harry's direct supervision, but it has also been a total failure after being redesigned by Ohio State University and worked on by degreed engineers at Q2Power for two years.
"The accumulated deficit since inception is $6,161,002" from page 9 of latest 10-q.
The net value of "software, property and equipment" is now $7,719, and all software and computers are gone (used to pay Precision CNC's bill).
The bulk (82%) of their assets, the technology license from Cyclone Technologies, is for the steam engine technology they are no longer pursuing.
The Ohio facility has closed and the employees there terminated.
They are down to two employees: the CEO Christopher Nelson and CTO Sudheer Pimputkar, PhD. Dr. Pimputkar is paid a base salary of $170,000. Now that the company's focus has moved from energy technology to buying composting businesses, it is unclear what, if anything, he is doing for Q2Power.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
As of August 1, 2016, the Company was in default under its two Original Issue Discount Senior Secured Convertible Debentures, which matured on July 31, 2016. The Company and the holders are currently negotiating a term extension to the debentures.
As of July 16, 2016, the Company was in default under its 120-day term loan in the principal amount of $150,000. A 10% late penalty has been assessed, and the Company is currently in negotiations with the lender to amend the terms of its loan to extend the maturity term and correct the default.
History of the Q2Power Energy System
Q2Power was created to build systems that would generate electricity from heat that might be surplus heat from industrial processes or heat created by burning methane such as the methane created in waste water treatment plants.
Christopher Nelson had been President of Cyclone Power Technologies of Florida whose business was developing a modern steam engine. Nelson spun out a model called the Waste Heat Engine (WHE) as the basis for Q2Power's business.
In the Q2 2016 quarterly report, Q2Power stated R&D of this technology had been suspended and the company's business was shifted to looking for opportunities in the composting of waste water sewage sludge. The Ohio facility where the R&D work was done was closed and the lease ended on June 27, 2016. R&D staff had been terminated on May 27, 2016. All computer systems, software and office furniture was used to pay off back rent and services provided by the landlord.
A prototype system had been installed at the Lancaster, Ohio waste water treatement plant in 2015, but no information on its performance was ever released.
A system was sold in January 2016 to a customer in Florida for delivery in May 2016 but only an initial payment for completing the design work was made. No further progress payments have been made.
The rest of this post gives more detailed information on the Q2Power technology.
Timeline:
2004 Inventor Harry Schoell of Florida starts Cyclone Power Technologies to develop and market an advanced steam engine he has designed.
September 24, 2007 PR: Cyclone Power Technologies Files Patent Application for New, Eco-Friendly Waste Heat Engine Technology. The Waste Heat Engine (WHE) becomes the basis for what will eventually become Q2Power. Inventor Harry Schoell states: "The company believes that the WHE could be in commercial production by the end of 2008."
November 17, 2008 Bent Glass Design of Hatboro, PA purchases a Waste Heat Engine (WHE) cogeneration system from Cyclone Power Technologies.
December 14, 2010: The WHE system at Bent Glass Designs is finally reported to be operating and feeding electrical power into the grid.
April 20, 2012: Cyclone reports "When we initially installed our waste heat engine at the Bent Glass facility in December 2010, we ran the engine for a couple of weeks, but soon realized that the engine required further development." This is the last mention of the Bent Glass Design project by Cyclone. No information on system operation or performance is released.
May 05, 2009 Renovalia Energy, S.A., of Spain.is licensed to develop a production version of the WHE engine for use with solar collectors and manufacture it for the solar energy market.
April 20, 2012: Cyclone reports "We are not sure whether Renovalia will proceed to the next step of building engines". No engines are known to have been built under this license.
December 11, 2009 Great Wall Alternative Power Systems Ltd. of China is licensed to develop a production version of the WHE engine and manufacture it for the Chinese market.
September 2013: Great Wall Alternative Power Systems terminates WHE engine license agreement with Cyclone Power Technologies. No marketable version of the engine was known to be built under the agreement.
July 2010 Cyclone-WHE LLC subsidiary is established by Cyclone to develop, license and market WHE engines.
Christopher Nelson, Cyclone's Executive Vice President and General Counsel, is named the Managing Director of Cyclone-WHE.
December 21, 2010 Cyclone Power Technologies and Phoenix Power Group of Tennessee. announce they "intend on launching several dozen pilot programs in the first half of 2011 for the 10kW waste oil power generator called the Phoenix-10, and the small-scale industrial waste heat recovery unit called the WHE-GEN-10. Broader commercial sales of these units are anticipated to commence later in the year." No pilot programs were reported after this announcement.
March 2011 Christopher Nelson promoted from Executive VP to President of Cyclone.
Agreement announced between Cyclone Power Technologies and TopLine Energy Systems LLC of Florida (a venture of the Topline autoparts company) to engineer and provide "parts for 12 completed engines within 60 days"
In April 2012 Cyclone stated four engines had been produced but no specifications or performance data of the Topline designed engines was ever given out, nor was the Topline venture ever mentioned after that.
February 2013 Cyclone "signed an agreement with The Ohio State University’s Center for Automotive Research (OSU-CAR) to assist in the commercialization of its external combustion engine technology."
November 5, 2013: The WHE-DR engine, designed and built by OSU-CAR, is announced. It was "expected to be ready to transition into limited production by the end of this year" (i.e., 2013). No production has occurred.
July 17, 2014 Cyclone Power Technologies separates WHE Generation Corp into an independent company. "Christopher Nelson resigned as President of Cyclone to assume the position of Chief Executive Officer of WHE GEN."
WHE GEN adopts the name Q2Power in early 2015.
August 27, 2015 Anpath Group (APGR), a listed company with no operations signs a merger agreement with Q2Power. The merger is completed in November with Q2Power assuming a majority postion in the new company.
January 14, 2016 Q2Power announces another agreement with Phoenix Power Corp. No mention is made of meeting the 200 Hour Running Requirement (see below). The announcement with Phoenix Power is similar to several announcements predicting product production made by Q2Power's predecessor Cyclone Power with Phoenix Power since 2009.
February 10, 2016 Q2Power files an amended 8K stating "Management believes the Company will start generating revenues through commercialization of its Q2P Engine and Q2P System within the next three to six months" (page 5), and that on January 21 they sold their first system to a company in Florida (page 18). Price was $160,000 to be paid for progress milestones over the next four months.
June 21, 2016 Layoffs of R&D staff and shift of direction to composting of sewage biosolids announced. No progress mentioned in the system sold to the customer in Florida in January for delivery in May. No mention of meeting the 200 hour operating requirement to received the progress payment from Phoenix Power. No facilities, employees or contracts for the composting business mentioned.
Summary:
Development of the waste heat engine has been underway continuously since 2007 involving Cyclone Power Technologies, Renovalia Energy, S.A., of Spain, Great Wall Alternative Power Systems Ltd. of China, TopLine Energy Systems LLC of Florida, The Ohio State University’s Center for Automotive Research and Q2Power, but no marketable engine has resulted. Q2Power states (page 16): "We license the Q2P Engine technology from Cyclone, which developed and patented the relevant engines and components over the previous 10 years with over $8 million in R&D expenditures during this time." No explanations of what the actual problems are with the engine or why repeated predictions of engine production have failed to materialize have ever been given.
Christopher Nelson, Q2Power CEO, was Managing Director of the WHE engine operation since July 2010 while all of these efforts to commercialize the engine failed.
Technology:
The heart of the Q2Power system is a small steam engine. Any source of heat that can boil water can generate steam that powers the engine. The output of the engine typically would drive an electrical generator, producing electricity that is sold for revenue.
Preliminary applications are proposed for burning methane that is a normal waste byproduct of garbage landfills and municiple sewage treatment plants. Phoenix Power Systems of Tennessee was established to combine the WHE generator with waste oil furnaces that burn used motor oil in garages.
A unique feature of the WHE engine is that it uses water rather than oil as a lubricant. This eliminates the need to remove oil from water and vice-versa, but water has only 1/250th the lubricity of oil. The many-years delays in engine production is attributed to the technological difficulties in making a water lubricated engine. Engineers from the Ohio State University made a presentation in March 2014 on their work improving the WHE engine. Water lubricated bearings was the primary reported hurdle and a research program to develop usable bearings was their primary task going forward. No solution to the bearing problem has been reported.
IP Protection:
Q2Power has a 20 year license on the entire patent portfolio of Cyclone Power Technolotgies. Most of these, however, protect features of the Cyclone "regenerative" steam engine which are not found on the WHE engine. The U.S. Waste Heat Engine Patent, US7992386, was allowed to lapse on August 9, 2015 due to failure to pay maintenance fees.
Versions of this patent may still be in effect in China (CN102203383B), but has also lapsed in many European countries (EP2352904).
Q2Power's license also includes all trade secrets held by Cyclone Power Technologies. Cyclone, however, has never developed a marketable engine using these trade secrets and has not filed required financial statements since early 2015.The effectiveness of Cyclone's core technologies have never been demonstrated in the market.
The 200 Hour Running Requirement:
Phoenix Power Systems contracted with Cyclone in 2009 to provide engines. The contract was restated in September 2013 after no engines had been delivered. The development milestones include:
2.$150,000: Upon the completion of 200 hours of durability testing of WHE version 5.0 as conducted and/or overseen by OSU. The durability testing shall consist of the WHE engine operating, without failure, and producing 10hp to 20hp; provided that Licensee certifies that its CCHX steam generator can produce sufficient steam for these tests;
3.$10,000: upon delivery of each of 10 working prototype WHE engines to Licensee (total of $100,000).
The $250,000 is held in escrow and is reported as deferred revenue in Q2Power's balance sheet as of the 8K of November 12, 2015. As long as the $150,000 deferred revenue is maintained on the books for not meeting Milestone #2, the Q2Power engine has not been demonstrated to run continuously under load for 200 hours.
This delayed 10Q is going to be bloody.
The last 10Q showed only $36K in current assets and $3.1MM in current liabilities.
They sold one system in January which was supposed to be delivered in May, with progress payments having been made along the way. The last 10Q showed no progress payments had been made, and in June they announced R&D staff working on that system were being laid off. Now August and still no word of progress on completing the system. A $150K term note came due mid-July.
They also announced they were shifting to the sewage sludge composting business. With no facilities, equipment, expertise, regulatory approvals or contracts.
Dilution must be the only thing keeping them afloat.
Another filing deadline missed...
Today was the day to file the 10q for Q2. No extension request, either.
That's 7 quarters now since the last filing.
Remember a whole year ago now:
Cyclone Power Technologies Will File Financial Reports and Releases Progress to Shareholders
POMPANO BEACH, FL--(Marketwired - Aug 20, 2015) - Cyclone Power Technologies ( OTC PINK : CYPW ) will file a financial Report for the period ended December 31, 2014, the first two quarters of 2015, and is releasing the following progress report to its shareholders:
Tom, I think you are over-thinking it...
Business model:
Step 1: have a product somebody wants to buy.
Step 2: sell it and make money.
They are still working on Step 1 after 12 years and at least $25 million in accumulated operating losses.
Same M.O. now as before, though. Lots of PRs announcing partnerships, licensing deals, development contracts, beta testing completed and predictions of production starting in six months. Just the names of the engine models and partners change over time.
Even though Harry Schoell told shareholders at the 2011 Open House that all technical problems have been overcome, Cyclone's entire effort since then has been to fix these already-fixed problems while sweeping the truth under the rug.
If the SEC wasn't so short-staffed, Harry and Frankie would be gone for securities fraud for failing to disclose material facts.
Agreed. All these 'contracts' will fail for the same reason as always: the Cyclone engine still doesn't work well enough for anyone to want to buy it.
Remember the Revgine contract in 2007? They were going to put Cyclone lawnmowers and weedeaters on the market within 18 months.
The WHE solar power system that was going to be on the market in the "first half of 2009"?
Great Wall from China was going to mass produce Mark 5s and WHEs starting in 2010?
The "several dozen pilot programs in the first half of 2011" with Phoenix Power for waste oil generators?
The 2011 agreement with TopLine Energy Systems to build a dozen WHE systems within 60 days?
And so on....
The reason all these deals failed then was the Cyclone engine just didn't work.
Here we are in 2016. Instead of flogging the Mark 5 and WHE engines, their saviors now are the Mark 1 and Mark 3 engines, neither of which has been shown in videos to run for more than a minute. Yet they've built some prototypes, sent them to partners and are predicting more great things real-soon-now.
The Mexican customer is building solar collectors and heat storage units according to Harry Schoell's "ingenious" designs and will find out as soon as they point them at the sun that they don't work as advertised.
A previous PR said "The 3R group traveled from Denmark to the Cyclone office February 14th to finalize the Development Agreement for the Mark 7 and accepted their first Mark 3 engine for integration into their boiler system." Six months and no news of successful operation? No doubt they've run it and watched it fail within a matter of minutes.
The Danish defense contractor will learn all the mistakes Harry Schoell has made so they can design their own system that will have a chance of working.
And in more of Frankie's confusing statements, "The S2 is a military version of the Mark 1". The S2 was the Army genset engine announced in 2011 while the Mark 1 wasn't mentioned until 2014 and not shown until 2016. Thus, the Mark 1 was adapted to military use 3 years before it was even conceived of.
Fun fact: "OP Schuman [...] have done a great job of resourcing USA made components as required by the military contracts." What military contracts? Maybe military contracts so super-secret they are not allowed to be mentioned?
"Republic Energy of Mobile, AL has completed two more Mark 3 engines". Funny, in 2014 Cyclone announced they got a contract from Republic Energy to build Mark 3 engines for Republic, and now the story has switched to Republic building Mark 3 engines for Cyclone.
The May 25th PR said "3R DENMARK will purchase the Mark 3 from Cyclone, which will be manufactured for us by Plunkett Energy of Alabama." Then the June 8th PR said "Plunkett Power of Texas is the financial backer for the production of the Mark 3 at the facility in Foley, Alabama," And now it's back to being Republic Power of Foley, the guy renting part of an old warehouse who has been doing promotions with Cyclone for years, such as the burning of some Gulf spill oil in 2010.
Now, if only Harry Schoell had the first clue on how to make the Cyclone engine actually work...
Oh, the Combilift engines haven't shipped because they are being made even better!
From the November 2015 PR:
Completion of the Combilift contract will allow us to collect $300,000. We are pursuing invoice financing to complete this order. The project is in the final process of the 50-hour testing, and we are working toward a 2015 delivery. This effort was delayed due to the resources going to development of the WHE engine and overhead expenses for SEC compliance. Combilift's owner will be here this month, to assess our progress.
The Mark 5 for Combilift that was produced and currently under testing for Combilift is now being updated to the production model. In working with our manufacturers, we have decided in conjunction with the management of Combilift to deliver a production model instead of a "beta". Harry Schoell, CTO said, "We realize that this has delayed the fulfillment of our previous contract, but feel this is a much better way to move forward with our customer. We have in house 5 new Mark 5 production engine blocks to expedite the project." This will be worked into the schedule to update and deliver a production unit to Combilift and prepare our third manufacturer in Louisiana for this production.
I love that: "completed beta testing".
Frankie should get a gold star for creative writing.
Oh, the "prime integrator" was an established generator supplier. Their part of the deal was to take the engine Cyclone produced and put it in one of their generator sets. There is no doubt they are ready and waiting to do that (as long as Cyclone pays cash in advance).
Only trouble is, Cyclone doesn't have any engines that run for more than a matter of minutes.
Even all the ones that have completed beta testing.
Hard to say what a PR will do.
Here's the chart for this year. Red lines are the points where PRs were issued.
In order, they were:
Jan 12, 2016
Q2Power Technologies Up-Lists to OTCQB; Listed in Mergent Industrial Manual
http://finance.yahoo.com/news/q2power-technologies-lists-otcqb-listed-143257612.html
Jan 14, 2016
Q2Power Signs Collaboration Agreement With Phoenix Power to Streamline Sales Process, Open New Markets for Q2Power Products
http://finance.yahoo.com/news/q2power-signs-collaboration-agreement-phoenix-145129750.html
Feb 2, 2016
Q2Power Receives Order for Commercial Waste-to-Power Unit From MagneGas
http://finance.yahoo.com/news/q2power-receives-order-commercial-waste-133000798.html
Mar 1, 2016
Kevin M. Bolin, Experienced Renewable Energy Executive, Named Chairman of the Board of Directors of Q2Power
http://finance.yahoo.com/news/kevin-m-bolin-experienced-renewable-134831464.html
Mar 23, 2016
Scott Whitney, Leading Executive in Waste-to-Power Industry, Appointed to Board of Directors of Q2Power
http://finance.yahoo.com/news/scott-whitney-leading-executive-waste-130000876.html
Apr 20, 2016
Q2Power Updates Shareholders of Company's Progress and Future Milestones
http://finance.yahoo.com/news/q2power-updates-shareholders-companys-progress-152955879.html
May 18, 2016
Q2Power Technologies Signs Term Sheet With ERTH Products to Expand Bio-Solid Compost and Specialty Soils Markets
http://finance.yahoo.com/news/q2power-technologies-signs-term-sheet-130000723.html
Jun 21, 2016
Q2Power Provides Information on Its Business Extension Into Composting and Engineered Soils
http://finance.yahoo.com/news/q2power-provides-information-business-extension-130000748.html
Jul 6, 2016
Q2Power Adds William Kish to Advisory Board to Strengthen Expertise in Compost and Engineered Soil Markets
http://finance.yahoo.com/news/q2power-adds-william-kish-advisory-130000891.html
Things you would expect to have a positive effect, like the first product order on Feb. 2 and signing a term sheet with ERTH Products on May 18th, each came right before a considerable drop.
Q2Power creates Advisory Board with one member: https://finance.yahoo.com/news/q2power-adds-william-kish-advisory-130000891.html
This is an old trick of Cyclone Power (CEO Chris Nelson's previous company): Have a board of technical advisors, put out PRs announcing respected individuals joining the board, then never ask for their advice.
The most amusing case of that was the announcement of a cold fusion expert added to Cyclone's Board of Advisors in 2013. Yep, the fraudulent pseudoscience cold fusion.
Here's what Chris Nelson said then: "The Company plans to start manufacturing its 10kW Waste Heat Engine (WHE-DR) in early 2014, which it expects to serve the micro-grid waste-to-power market worldwide."
Last we heard he was planning to start manufacturing in Q2 2016. My how time flies.
The deal was signed in January for delivery in four months (i.e., May).
The Q1 10Q didn't mention it being delivered or any progress payments having been made since the first $40K down payment.
There has been no other mention of it, but a few weeks ago they announced shifting focus to composting, including:
The Company has also taken steps to reduce its R&D overhead over the previous weeks, including scaling back personnel, to dedicate more resources to this plan which is expected to get Q2Power to revenue and profitability quicker and increase shareholder value over the short and long term.
Hey Tom, you know, that wouldn't surprise me.
Any real company licensing technology is going to read the patents and determine their legal status. They'd find out quickly the Cyclone patents don't cover anything of value. The patents that haven't already lapsed, that is.
They may consider the $225K initial license fee a fair price to find out all the things Harry has done wrong in 12 years so they can avoid duplicating his mistakes. That would be the job of the two engineers they sent to Cyclone.
A license agreement would not allow them to use Harry's technology without continuing payments, but how much of anything he has developed is worth copying? The license agreement wouldn't prevent them from avoiding the things Cyclone proved don't work.
Remember the WHE at Ohio State University. The first thing they did was throw away the Harry Schoell 'ingenious' design and start over. Ohio State went to a rotary valve before Harry, so if that piece works he can hardly claim it as his invention. They also threw away the 'spider' bearing and half the cylinders.
That Frankenstein boiler is not going to be copied. Condensing needs to be redesigned anyway. Is there any control system on any of the Cyclone prototypes? The Mark 5 certainly had nothing in the way of a governor, other than a guy standing beside it working a lever.
I'm now thinking this company wants to investigate small steam engines, maybe for military or maybe for heating and power for buildings, and want to jumpstart their R&D. Harry may not have made all the possible mistakes in designing a steam engine, but he's got to have made more than anyone alive...
Boy are they going to be surprised when they find out what they've gotten themselves into.
If the engineers visiting Cyclone are smart, they will start up the prototype, put a 10 kW load on it and see how long it goes before failure. Their coffee will probably still be warm.
But, to Frankie's benefit, this time she suckered in a real company who may be paying real cash. Not another one of those wannabes operating out of a spare bedroom.
Now if she would just file all those financial reports she keeps promising to file.
Oops, Chris Nelson overpromotes again...
The claims in the PR about the engineered soil market of $7.8 billion and 6.7% CAGR weren't for "engineered soil", but were for "manufactured soil" which includes all of:
* Soil
* Compost
* Sand
* Coir fiber
* Perlite
* Vermiculite
* Others (horticulture sand and peat moss)
Only 30% of the market is in North America. Compost is only one bit of the market. And it gets even smaller:
The growth of this market is attributed to the increasing demand for organic products, the increasing global population, improved yield & productivity, and increasing trend towards modern farming practices such as controlled agriculture and urban farming.
Q2Power lays off R&D staff.
New PR: http://www.marketwired.com/press-release/q2power-provides-information-on-its-business-extension-into-composting-engineered-soils-otcqb-qpwr-2136104.htm
The Company has also taken steps to reduce its R&D overhead over the previous weeks, including scaling back personnel, to dedicate more resources to this plan which is expected to get Q2Power to revenue and profitability quicker and increase shareholder value over the short and long term.
"We believe there is value to combining our proprietary technology with a low-tech cash flowing business like composting and sustainable soils manufacturing. As we grow the revenue side of our business, we can dedicate more resources to important long-term R&D programs," Mr. Nelson added.
Q2Power's expansion strategy is supported by a Research & Markets report published May 2016 stating that the global engineered soils market is projected to reach $7.8 Billion by 2021, at a CAGR of 6.7% from 2016 to 2021.
Hey Bobby, just sharin' the wealth (of information).
I hear Harry and Frankie moan and whine about how they were cheated by their former President who stole their fantastic technology.
Chris Nelson probably thinks he actually got something of value from Cyclone. He has lined his pockets with the Q2Power house-of-cards by promising working technology that can be deployed now, but he's made the mistake of doing it in his name.
At Cyclone he could always blame Harry's technical incompetence for that company's failure. Now it's just him and the team he assembled.
Q2Power is short for heat-to-power. Maybe they can change the name to $2poo.
Rats are deserting this sinking ship.
Volume the last two days has been about 100x average. And with no public news that would trigger such a selloff.
Any bets it's CEO Christopher Nelson clearing his position?
Condensing still doesn't work.
Watch the left side of the video at 43 seconds in:
Notice the plume of steam being vented from the condenser. Even with that big aluminum radiator and big electric fans this little engine still can't condense all the steam.
This has been a problem for many years. In the shareholder open house of 2011 Harry claimed the condensing problem had been "overcome". Their short-lived CEO James Landon wrote shareholders in 2013 saying he was hiring contractors with expertise in condensing systems to fix the problem. The last version of the Mark 5 finally went to a big external condenser.
And now, even their little Mark 3 that may be producing all of 5 horsepower (if the gauge on the left of the computer screen is power - too grainy to tell for sure) still can't condense all the steam.
Considering the Mark 3 was supposed to produce 25 horsepower, this isn't too promising.
Best video yet!
Instead of a grainy image of Bigfoot, a shakey, pixellated image of the New and Improved Cyclone engines. Was that Elvis' backside at the beginning, too?
So the story shifts again.
Plunkett Power isn't making engines, they provided "financial backing" to the builder in Foley, Alabama, who would be that guy renting part of an old warehouse that has operated under several names, being alternatively in the algae oil business, the gulf spill cleanup business, the refinery business and now apparently the engine manufacturing business. Funny, Cyclone used to claim they were getting orders to build engines for that outfit, but now they claim that outfit is building engines for Cyclone.
The Hypex order for 10 Mark 1 engines from November 2014 appears to now have been finally delivered, but "thru O.P.Schuman", which could be a packaging machinery manufacturer, also in Pennsylvania.
And it's now confirmed that Combilift has refused to accept the "beta" Mark 5 engine, that has always been reported to have worked so well, and Cyclone is moving on to the "production" version. With yet another "manufacturing partner", unnamed but in Louisiana this time.
Frankie has again promised to file financial statements, but again no commitment to any deadline. We'll see.
"Testing" is mentioned, of course, but results are not, also of course. Engines are being sent all over the place, and just like always, each will quickly fail and Cyclone will make some statement about deciding to not release the "beta" versions, but instead wait to finish the "production" versions.
Remember the Waste Heat Engine at Bent Glass Designs? Order placed in November 2008, delivery not until July 2010, starup announced in December 2010, then removed within a couple weeks for "more development" and was never heard from again.
Same story now, just different year.
More wishful thinking from Q2Power.
A new PR: http://www.pollutiononline.com/doc/q-power-technologies-comments-regulations-methane-emission-reductions-0001
Let's deconstruct "About Q2Power:"
Q2Power seeks to become a leading provider of waste management services for small-scale waste water treatment plants and other producers of methane and organic waste.
Q2Power's current combined heat and power (CHP) technology can be deployed with minimal time and expense at thousands of small-scale facilities that must dispose of waste such as methane, biogas and other used fuels at increasingly greater costs and regulatory burdens.
Through an association with ERTH Products, Q2Power also can convert bio-solid waste from water treatment plants into beneficial reuse products such as Class A compost and engineered soils.
Q2Power installed its first power system this summer at an Ohio wastewater treatment plant and is on track to deploy commercial units and bio-solid solutions to meet customer demand in 2016.
"The company is currently testing the prototype WHE Solar System, which it hopes to introduce to consumers in the first half of 2009" From a September 2008 PR.
And then there was the May 2009 PR with Renovalia of Spain: "production models of the engine, called Cyclone Solar I, which could be deployed worldwide with their solar stations within a year."
Chris Nelson took the WHE engine and started Q2Power. After burning more than $6 million now, he still hasn't gotten the engine to run for 200 hours without failure yet. (Q2Power is just about broke. They sold one system that was supposed to be delivered by now, but there's been no reported progress on it.)
Ah, let's not forget that deal with "Nextra Energy Solutions in their Solar 1 Megawatt projects". Here's their world headquarters again:
Oh, but this time will probably be different....
Hey Tom, you're asking a lot of Cyclone there. Not an unreasonable request by any means, but Harry Schoell has always refused to answer any questions about the measured 108 hp or 30% thermal efficiency he used to brag about getting. Publicly demonstrating an engine actually powering something is a heck of a tall order for this engine company.
Making a working steam engine shouldn't be that great of a challenge. James Watt built an engine in 1779 that's still running.
After all these years of unadulterated failure, Harry has finally started taking his 'innovations' off the engine. Unfortunately, he seems to be doing so one piece at a time and only when forced to by necessity.
Looking at what's there now, most of the plumbing is for a very complex fuel and burner system that should have been replaced with an off-the-shelf oil burner. There are even kits to convert those to burning waste oil and biofuel. Those would burn his algae and orange peel oil. But, his complex burner is probably the only thing Harry got to work over all these years.
The engine is still venting exhaust steam into the crankcase. He actually pumps water in to condense the steam there. This means the engine has to be lubricated with water, which has been a total and continuous failure. When they hired Ohio State University to redesign the WHE engine for "commercialization", Ohio State's focus turned to making bearings that would survive running in water. There was talk of a plan to build a bearing testing machine for bearing research, but that never seemed to have gotten done. (Remember Harry's theory that bearings are in reality small electrical generators? Who knew?)
Then there's that "spider bearing" that flops around and beats the connecting rods to pieces. It's the first thing Ohio State eliminated, along with three cylinders.
Why a six-cylinder radial layout still? Gasoline engines of this power are all one cylinder. Lots of expensive parts with lots of failure modes seems to be so the engine will self-start. It looks like that little electric motor beside the pressure washer pump is being used as a generator. Years ago smaller engines sometimes had dynamo-starters. All it was was putting electricity to the generator which makes it run as a motor and turn the engine over. Unload the pressure pump and use a starter solenoid to energize this generator.
It has always seemed that Cyclone's focus was on making the parts that could be bought off-the-shelf like the burner, pumps and condenser, while ignoring the key piece nobody else had: a working steam engine.
By the way, see the fuel tank? It's actually a race car fuel cell. Wanna bet the land speed car is being stripped for parts?
The cast aluminum thing underneath the engine is a dynamometer. It can be used to apply a load to the engine, or it can spin freely with no load.
The engine panel:
The two black knobs on the lower left are air pressure regulators. In one shot you can see a red compressed air hose connected. These are for the burner. One pressurizes the fuel tank to push fuel to the burner (taking the place of a fuel pump) and the other is the air that atomizes the fuel in the burner. The two bottom pressure gauges show the air pressure each is set to.
The lever on the bottom right "By-Pass Perge", meaning 'purge', probably has something to do with the fuel-air mixture. In this shot the two temperature readouts are dark, but they were on when Harry was starting the burner. Those temperature readouts might be used to adjust the fuel-air mixture to the hottest flame.
The pressure gauge on the top right doesn't say what it is, but it is reading 500 psi, so it is probably the boiler pressure. The one below it, "pan pres", would be the pressure inside the engine crankcase. They had a lot of trouble with the Mark 5 not being able to condense steam well enough, and that causes the crankcase pressure to rise.
The one that says "TORQUE", which is also dark, is actually a tachometer.
None of the gauges indicate the engine is producing any power.
Back in 2012 after being unable to deliver the promised engine to Chuk Williams for his land speed record car, Harry hired Nelson Hoyos, created the "Performance Division" and spent a lot of money having a custom land speed racecar built. At the time he used to brag on the steam car club bulletin board about a Mark 5 engine "runnin' sweet on the dyno" setting one power record after another. No one else has ever admitted to seeing that engine being dyno tested. Harry constantly refused to give out any details or proof when asked about his claims. And the car has never even run in a parking lot.
Short videos of engines spinning under no load combined with PRs claiming great things were happening soon has been standard operating procedure for Cyclone for several years. None of those predictions have ever come true.
Over at Q2Power, Chris Nelson's split-off WHE division, they still have that contract with Phoenix Power that says they will get a $150K progress payment when their engine runs under part load without breaking down for 200 hours. They still haven't been able to do this yet. The licence between Cyclone and Q2Power says they have to share any technology developments. So neither can make an engine last very long.
Well, 75 seconds of a shaft turning. That's quite an improvement over the 56 seconds they showed six years ago:
QPWR 10-Q: Accelerating towards oblivion
Turns out the $40K in revenue the reported in the 10K for engineering services was the down payment on the system ordered by that customer in Florida. Another $50K from that customer has been added to deferred revenue.
Going back to the 8K where this contract was announced (page 18):
On January 21, 2016, the Company signed its initial Technology Sales Agreement with a Florida-based company in January 2016, which is expected to provide approximately $160,000 in revenue to the Company over the following four months as it achieves progress milestones and delivers a 10kW waste-to-power system to this customer.
PR out: Q2Power Technologies Signs Term Sheet With ERTH Products to Expand Bio-Solid Compost and Specialty Soils Markets
https://finance.yahoo.com/news/q2power-technologies-signs-term-sheet-130000723.html
ERTH Products turns out to be a little hard to find. They are on a dirt road about 3 miles west of Plains, GA. Here's the satellite view of the operation:
Must be some awesome, world-beating composting technology they've got going. No wonder Q2Power is rewriting their business plan. That place has "success" written all over it.
QPWR is now paying for stock promotion.
See http://microcapresearch.com/q2power/ near the bottom: "Disclosure: Receipt of $7,500 from Q2Power Technologies for 3 month investor awareness program."
Looks like a pump-n-dump is coming.