Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Why a rotary valve? My guess is that Harry is in risk-averse mode. He's spent the last decade on the ego trip of being the "ingenious inventor", and has failed in a very public manner. His brainchild, the Mark 5, will never work. Can never work.
The OSU people made the WHE sort-of work with a rotary valve. If Harry puts a rotary valve on the Mark 5, it will sort-of work, too. If he tries to engineer a new valve himself, he might fail spectacularly again. It's much easier on the ego to use the OSU rotary valve design and claim "success" when an engine sort-of works. (OK, when an engine can turn its crankshaft without a load...)
I think it was you that said earlier that Cyclone would have been far better off buying old steam engines at antique auctions and rebuilding them. The shareholders sure would have been better off.
If there is any silver lining to the Cyclone fiasco, maybe more people are thinking about modern steam power.
Mystery Solved: Why Harry is screwing around with a rotary valve.
I thought Tom was onto something with his valve physics post. He found (and I agree) that to meet its published performance claims the Mark 5 engine must be able to open and close the admission valves in 0.0006 seconds or less.
That means accelerating the whole valve train, i.e., cam follower, pushrod, rocker arm, valve and valve spring, from rest to maximum velocity in one quarter of that time, then decelerating it to a stop at 0.0003 seconds, then accelerating and decelerating the valve back to the closed position in the other 0.0003 seconds.
Tom says (and I believe him here too) that valvetrain accelerations for pushrod engines are limited to 450 Gees (i.e., 450 times the acceleration due to gravity). This is the limit for mass production automakers that have the best materials and manufacturing processes available, maintain accuracies of considerably less than a thousandth of an inch and measure surface finish of parts to millionths of inches. A one-off cam would never be able to meet the same performance levels.
There's a video that shows the first Mark 5 prototype crankcase and cylinders running on steam in 2009.
History of the Mark 5 engine production
Phoenix Power ordered the first two Mark 5s that Harry tried to build. Because of all the PRs announcing a continuous stream of Great Things Coming, it took some careful reading of the SEC filings to actually figure out what happened and what didn't.
The pieces fit together like this:
July 30, 2009 (source: SEC filings Exhibit 10.8)
- License agreement with Phoenix for used oil generation. Includes:
1) $150K payment to Cyclone for license immediately
2) $150K payment when Mark 5 is measured at 60% rated output on dyno, expected in 3-5 months
3) $100K payment when two Mark 5s delivered to Phoenix
- Delivery of the Mark 5s in 6 months (i.e., January 31, 2010)
- Late delivery penalties of $25K in stock per month starting after 9 months, with a maximum of $400K
- Remaining $250K to be held in escrow by a lawyer until Cyclone meets milestones 2 and 3.
- Cyclone books this $250K as Deferred Earnings, and it becomes Income only when milestones met.
- Cyclone also provides stock warrants to Phoenix
(Note: the Q3, 2013 10-Q says that only then was the first $150K payment converted from Deferred Revenue to Income, so it also must have been held in escrow.)
March 20, 2010 (SEC Exhibit 10.8.1)
- Amendment to agreement
- Phoenix had paid in $225K and agrees to pay in remaining $175K by September 1, 2010
- If Cyclone delivers the two Mark 5s before then, Phoenix pays balance immediately
- Milestone 2 and 3 not met yet.
October 18, 2010 (SEC Exhibit 10.8.2)
- Second amendment to agreement
- Mark 5 delivery deadline before late penalties start is extended by Phoenix
- In return, Cyclone now required to deliver 2 WHE-25s that meet certain performance requirements by a deadline.
Q2, 2012 (SEC 10-Q)
- Agreement changed January 1, 2012 to substitute the WHE 25s for the Mark 5s, but Cyclone is still required to deliver the Mark 5s at a later date.
- For the year ended December 31, 2011, Cyclone paid Phoenix $350K in stock for late delivery
- In Q1 2012, Cyclone paid Phoenix $50K in stock for late delivery. This was the maximum of $400K in late delivery penalties in the original agreement.
- In March 2012, Cyclone paid Phoenix $380K in stock to cancel Phoenix's stock warrants.
Q3, 2012 (SEC 10-Q)
- Ran the Phoenix boiler and WHE 25 for the first time together and generated 7kW.
- Claim "Over the following several months, the two partners will be optimizing the performance and durability of this system, with the goal of commencing pilot programs and limited run production in 2013. "
Q4, 2012 (SEC 10-K), Q1, 2013 (SEC 10-Q)
- Repeats above sentence about expected production in 2013.
Q2, 2013 (SEC 10-Q)
- Above sentence deleted, but rest of paragraph about Phoenix WHE remains. (Later reports also have the paragraph without this sentence.)
September 30, 2013 (SEC Exhibit 10.25)
- Agreement with Phoenix is rewritten. New milestones are:
1) $150K for completion of Phase 1 of project between Cyclone and Ohio State University, consisting of analysis of Cyclone WHE and design and construction of OSU WHE. The $150K payment made in 2009 was applied to this milestone.
2) $150K when the OSU WHE completes 200 hours operation under load.
3) $100K upon delivery of 10 working prototype WHEs to Phoenix (each having passed the 200 hour test).
- Phoenix no longer wants any Mark 5s.
Q3, 2013 (SEC 10-Q)
- Cyclone books $150K from Deferred Revenue to Income for completing milestone 1 of the new agreement.
- The related Cost of Goods Sold was $133K.
Q4, 2013 (SEC 10-K)
- Cost of Goods Sold for Phoenix contract was $184,464
====Summary====
- Phoenix put $400K into escrow starting in 2009. They paid out $150K after OSU redesigned the WHE. $250K is still in escrow.
- Phoenix received $400K in stock for late delivery penalties and $380K in stock for their warrants. If they sold this stock when they got it, it would have been very profitable for them.
- The Mark 5 never met any contract performance milestones.
- The Cyclone WHE-25 design never met any contract performance milestones.
- Phoenix is done with Cyclone engineering.
The Mark 5 was originally promised for January 31, 2010 delivery. Although Cyclone stopped working on it for Phoenix by September 2013, Cyclone has been working on the Mark 5 for delivery to Combilift since 2011. This now puts the Mark 5 four years and nine months behind its promised delivery.
(About the time Phoenix ordered two Mark 5s, Great Wall paid some $62K for the PLANS to the Mark 5, with the idea they would manufacturer them for China. I wonder if Harry told them he himself hadn't yet tried to build a Mark 5 from those plans?)
The Cost of Goods Sold for the Phoenix contract in 2013 was $184,464. This appears to be the money Cyclone paid to OSU.
It sure looks like Phoenix was the driver in this deal. It could be they demanded WHE become a subsidiary headed by Chris Nelson so they wouldn't have to deal with Harry Schoell any more. They must have put in the 2013 contract revision that the engineering be moved from Harry to OSU. Harry's ego sure wouldn't have allowed that to happen voluntarily.
The original Phoenix plan for the "Phoenix 40" generator using a Mark 5 made a lot more economic sense than using a WHE. The potential efficiency of the Mark 5 (assuming it worked) would be about 4 times that of the WHE. Customers would have much better payback and would be more likely to buy the Phoenix equipment. Given the fact that Phoenix no longer even wants a Mark 5, they obviously don't believe it will ever work.
Phoenix has already made so much money from the late penalties and warrants that the $150K they've spent was a great investment. They won't pay more until the OSU WHE survives 200 hours of testing, and the next 10 prototypes have an engineering design life of at least 5000 hours. If that happens, Phoenix can make money selling them. If it doesn't happen, they walk away from the deal with the existing profits.
But the bigger picture is that the people inside Cyclone know the Mark 5 is seriously flawed, and have decided to keep quiet.
Condensing: Another fundamental design flaw of Cyclone engines
I agree with Tom's points that Harry Schoell has been peddling technobabble that takes no account of the Laws of Physics.
I've now come to the conclusion that Cyclone insiders have known fully well for years that the Mark 5 engine concept can never work, yet they have continued to omit that fact and have materially misrepresented to investors that there is a possibility of making the engine work.
The condenser section of the "Schoell cycle" is one smoking gun. Regardless of the patent Harry got for his "centrifugal condenser", and all his claims about how great it works, the thermodynamics are fundamentally wrong.
Let's see how some numbers work here.
The Mark 5 is rated at 100 hp and 30% efficient. Let's suppose that's true.
Heat input from fuel = 100hp/0.3 = 333hp. Let's suppose ambient temperature is 100F and the combustion gases are heated to 2500F. That's a 2400F temperature rise from 333hp.
Some of the heat goes out the exhaust. The flue gas temperature on an efficient non-condensing home furnace is about 300F, and let's suppose the Mark 5 with all its regeneration is just as good at taking heat out of the combustion gas. The exhaust at 300F is 200F above ambient. If it takes 333hp to raise the combustion air 2400F, it means 200F/2400F x 333hp = 27.8 hp of heat energy is going out the exhaust.
The Law of Conservation of Energy tells us:
Heat_In = Power_Out + Exhaust_Heat_Out + Condenser_Heat_Out
Energy doesn't go in or out anywhere else. Rearranging:
Condenser_Heat_Out = Heat_In - Power_Out - Exhaust_Heat_Out = 333hp - 100hp - 27.8hp = 205.2hp
This is the heat the condenser has to continuously dump from the engine.
Now we'll look at the heat transfer from the combustion gas to the boiler tubes, and from the condenser surfaces to the cooling air. In both cases it is a forced air convective heat transfer.
Newton's Law of Cooling says the rate of heat transfer between two substances is proportional to the temperature difference between them. We also know the rate of heat transfer is proportional to the surface areas.
If we look at the hot end of the boiler tubes, the hottest combustion gas (2500F) passes the tubes with the hottest steam (1200F) The temperature difference is 2500F - 1200F = 1300F.
The Mark 5 is rated for atmospheric pressure inside, so it condenses steam to water at 212F. With our 100F ambient air, temperature difference is 212F - 100F = 112F.
Total heat transfer from a surface is Surface_Area x Temperature_Difference x Heat_Transfer_Coefficient,
The boiler has 333hp of heat going in and 27.8hp of heat going out the exhaust. The rest (333hp - 27.8hp = 305.2hp) goes into the boiler tubes.
Making a ratio:
(Condenser_Heat_Transfer) / (Boiler_Heat_Transfer) = 205.2hp / 305.2hp = 0.672
And substituting the values of the heat transfer:
(Condenser_Area x Condenser_TempDiff x Heat_Transfer_Coeff ) / (Boiler_Area x Boiler_TempDiff x Heat_Transfer_Coeff ) = 0.672
Because both places are forced air convection, the heat transfer coefficients are about the same and cancel. Then:
(Condenser_Area x 112F) / (Boiler_Area x 1300F ) = 0.672
And solving for Condenser Area:
Condenser_Area = 0.672 x Boiler_Area x (1300F/112F) = 7.80 x Boiler_Area
So, for the condenser to dump its 205hp of heat on a 100F day means it needs to have about 7.8 times the surface area of the boiler tubes.
Now look at a cross section of the Mark 5. If you take surface area of all those tubes in the boiler section, it's quite a bit more than the area of the outside of the condenser. From the Cyclone drawings, I'm getting the the condenser surface area is only about half that of the boiler tubes, when it needs to be 8 times as much.
So the Mark 5 condenser is way too small. This is one of the things the experienced steam people on the steam car club forum politely asked Harry about years ago, and he assured them he had it working.
As another comparison point, let's look at a semi-truck with a 400hp diesel engine that is 40% efficient. The heat input from the fuel is 1000hp, 400hp comes out as mechanical power and let's say the other 600hp is divided evenly between coolant and exhaust. So the radiator is rejecting 300hp of heat from coolant at about 212F to air at 100F on a hot day. Look at the size of the radiator in these trucks. That's what it takes to dump that much heat. The Mark 5 only needs to dump 205hp and not 300hp, but 2/3rds of that truck radiator is still far bigger than the whole Mark 5 engine.
Ever wonder why there are a bunch of videos of the WHE engine running and not the Mark 5? The WHE uses an external water-cooled condenser, so it can condense all its exhaust steam and keep running. The Mark 5 can't condense its exhaust steam, and the pressure and temperature inside the engine would quickly build up. It just can't run very long without overheating and blowing a safety relief valve.
Raytheon ordered two Mark 5s, but ended up with two Manta 36s. The Manta 36 uses an external water cooled condenser, so they could be made to run for a while.
The latest video of the Mark 5 with a rotary valve doesn't have the Mark 5 condenser on the engine. The exhaust steam is going somewhere else.
There was one video of a test run of the Mark 5, Youtube video ZGRxqHiYCaQ from March 10, 2010. Towards the end the camera pulls back some and you can see there's nothing under the engine. The output shaft comes out the bottom, and it's not connected to any load. So this engine was only producing enough power to overcome its internal friction. (The curtain just behind the engine is hiding the blowers and pumps, which are being powered from some outside source.) In this case the engine only needs a small amount of power so only a small amount of fuel is being burned. The condenser may be able to dump the small amount of heat. (Or maybe not as the engine is only seen running for 57 seconds.)
Then there's the Mark 5 for the Land Speed Record car. Harry had insisted that a completely stock Mark 5 would be used so it would prove his Mark 5 was able to power a car. Chuk Williams was promised an engine, and built his car to specifically fit the Mark 5. After years of excuses he never got the engine and found something else.
A funny thing happened then. Harry hired Nelson Hoyos, created the Performance Division and reputedly spent half a million dollars to build a car to beat Chuk. Suddenly the engine went from a stock Mark 5 to a special design. Why?
The new LSR engine was going to be non-condensing. I think Harry knew the Mark 5's condenser is far too small, and if he tried to use a Mark 5 in the new car, he would never be able to beat Chuk. This forced his hand. If he tried to run his car with a stock Mark 5, it would be a failure, and a failure that people would see. So the switch to the non-condensing non-Mark 5 for the car.
Now let's look at what James Landon wrote in the Letter to Shareholders in January 02, 2013:
"The development path for the Combilift engines follows the LSR engine; however, the complexities and operational requirements for Combilift engines are greater. To assist us in moving this project towards completion, we have recruited contractors with expertise in certain areas such as condensing systems. "
It's not that the Mark 5 for Combilift was extra complicated, the LSR engine was a much simpler engine.
And Mr. Landon, the soon to be ex-CEO of Cyclone, hired contractors with expertise in "condensing systems". Why would they do that? Because they knew the Mark 5 will never work with the condenser it has.
So Cyclone is all about the Mark 5. Harry dreamed it up down to the last detail, then patented it. He built a number of really attractive non-functional prototypes and let people think he had a working engine. He even accepted awards for the engine that never yet ran. He sold licenses to companies, without having even tried to build the engine, and he sold stock to numerous people on the pretense he had a working engine.
Eventually he built prototypes of the Mark 5 and discovered they can't come close to condensing the steam they need to. But he's continued with the pretense that the engine works.
The Mark 5 will need a big external condenser to be able to run. It will require a fan and motor and a pump to send water back to the engine. The patents only cover an engine with an integral condenser.
And Harry would have to admit his design was flawed. Rather than do that, he has decided to intentionally misrepresent this material fact to investors. Eventually he will force Cyclone into bankruptcy and blame the Mark 5's failure on others.
The Harry and Frankie cash-out plan:
"Certain directors and executive officers of the Company may be issued shares provided in the Share Increase Amendment in return for the elimination of their debt to the Company and deferred salary."
The stock price may be able to rise now.
Yes, it sounds crazy, but here's why: Cyclone either has or will soon issue the last of their 900 Million authorized shares.
Shares Outstanding:
734,864,045 - as of September 30, 2014 (from the Cyclone Corp Info page.)
552,913,309 - as of August 10, 2014
181,950,736 new shares issued in 7 weeks, or about five million per trading day.
At that rate 900 million shares will be issued on or about November 10, 2014. (Yes, today.)
Apparently there has been enough demand to keep the price above a tenth of a penny in spite of the continuous dilution. If the dilution stops, the same demand should raise the price.
Or they'll file the paperwork to increase the number of authorized shares and keep diluting.
If a pump and dump is going to work, it better be done soon.
Cyclone also has never publicly demonstrated a working engine.
In 10 years they've generated accumulated operating losses of $23 MILLION. That's in addition to all the derivative losses.
Their flagship product, the Mark 5, was first promised for delivery to a customer 4 years and 9 months ago. There's no evidence it has ever worked as advertised, and no reasonable expectation it ever will.
The WHE-25, after years and millions spent at Cyclone for development, was sent to Ohio State last year. They promptly threw out the entire Cyclone design and came up with the WHE-DR.
Even so, Phoenix Power set a milestone of the WHE running under load for 200 hours. Ohio State has been trying for a year now and has not achieved even that short of a life.
After paying something like half a million in license fees for the S-1, Renovolia went to Stirling engines.
We're told that Raytheon got great results from testing Cyclone engines, but we've never been told what the tests or results were. Raytheon has also not come back.
The S-2 genset for the Army passed the acceptance tests, but again, what were they? Why is there no information about the S-2 on the Cyclone website? Why don't they make more of them?
This isn't a case of a company that has been building successful engines for decades offering their latest revision of a successful design to some lead customers. Cyclone has never delivered an engine that has been publicly witnessed as working. Everything they've built so far has been completely unmarketable.
Expecting the first 10 prototypes of a brand new design (the Mark 1) to work given that nothing they've ever done before has worked is pretty optimistic.
But, on the other hand, Harry Schoell got patents, built a bunch of non-functional mock-up engines, sold stock, won awards, sold licenses and even sold Mark 5 engines before he ever tried to build the first one. Expecting the Mark 1 (whatever it is) to work properly is just the way his ego works.
Someone on the steam car club forum once told him "Stop telling us what it's GONNA do, tell us what it HAS done."
It's just the TopLine deal repeated.
In March 2011 Cyclone and Topline Energy created a Letter of Understanding to build 12 pre-production WHE-25 engines for customer testing (sound familar?).
The letter said the engines were to be built in 60 days. No engines were ever reported to have been built, and Topline was no longer mentioned by Cyclone.
PR, hype, dilute the stock some more, then silence. Typical Cyclone MO.
Considering there's no mention anywhere of what the Mark 1 actually is (other than 5hp output), and Cyclone has let go all their engineering staff earlier this year, there can not have been a lot of thought go into the Mark 1 design.
My guess: 1/3rd of the OSU WHE engine.
Deja vu all over:
March 17, 2010 10:30 AM Eastern Daylight Time
POMPANO BEACH, Fla.--(BUSINESS WIRE)--Cyclone Power Technologies Inc. (Pink Sheets: CYPW) has signed a letter of intent with Unified Fuels LLC of Foley, Alabama regarding the co-development and systems integration of Cyclone’s heat-regenerative external combustion engines.
“This is an interesting application for our technology in a very important field of converting waste to usable fuel and power”
Under the LOI, Cyclone and Unified will perform certain business and technological feasibility studies related to using Cyclone’s Mark V and Waste Heat Engines with Unified’s waste-to-fuel systems. Unified’s process uses a form of destructive distillation in which manipulation of the carbon chains in the biomass occurs with the end resultant being a liquid fuel. The final products of this process are diesel fuel, gasoline, methane and heat. The latter two energy forms, which would otherwise be wasted, can be used in the Cyclone Engines to power Unified’s total system and, possibly, create additional revenue streams for the facility owner.
republicenergy47@gmail.com That's the email address of the President of Cyclone's new "well funded" customer, according to their facebook page.
Harry must have invented a way to pump solids through tubes:
This system is used to extract fuels from bio-mass. Cyclone Power has developed a technology that heats the extraction tubes evenly by use of Cyclone’s atomizers to a temperature sufficient to release the hydrocarbons from the bio-mass.
stated Frankie Fruge, President of Cyclone. "This is just the first part of a working relationship with Republic Energy with plans of integrating our Mark 3 engines into the system."
As Frankie said in the PR "This is an important initial step for Cyclone's business model"
The last 10 years and $57 million in shareholder's deficit was just a Mulligan. Cyclone's business model is only just starting now.
But, considering they've already sold licenses for the small engine market (Revgine), the solar market (Renovia), waste heat market (WHE GEN), industrial equipment (Combilift), the Chinese market (Great Wall), military market (Advent Power Systems), the pig farm methane market and some others, there's not a lot of room to grow.
And the fact that Cyclone sold all these licenses without having a working engine, and that they still don't have a working engine, plus all the publicity they generated about the land and water speed record attempts they never made, might put a crimp in their ability to sell any new licenses...
Nelson/Schoell pull another fast one on investors...
From the separation agreement:
SCHEDULE 1.1
USE OF PROCEEDS
Series A Round (provided a full $2 million is raised):
$1,825,000 – WHE operations over the following 12 to 18 months
$175,000 – licensing and consulting services over the following 6 months to assist WHE GEN and its engineering team (the “Cyclone Fee”). The Cyclone Fee is payable to Cyclone upon the First Series A Closing of at least $500,000.
Cyclone may raise $500,000 in additional capital from the sale of a portion of its WHE GEN equity holdings to further reduce existing debt and provide operating capital.
1) It will allow Cyclone to monetize its investment in WHE GEN, part of which is expected to be sold to private investors to raise non-dilutive capital for Cyclone. We intend on selling up to $500,000 worth of our WHE GEN stock simultaneously with the separate funding of our subsidiary.
The derivative and interest expenses in Q2 were $530K.
There was $140K in revenue in Q2 from finishing the Army contract. That, plus the $350K they got today should just about cover Q3's interest expenses.
There's no chance they will get any revenue from sales in Q3 or Q4 (or, frankly, any time after that). All of their engineering staff has been let go (except for Harry, of course).
They put out a video of part of a Mark 5 engine running poorly and with no load connected. Still nothing powering a car, or boat, or lawnmower, etc.
Still no word on if Ohio State University has got the WHE engine to last 200 hours on the dyno yet. Until (and if) they do, Chris Nelson has nothing to sell but stock.
Uh-oh, Cyclone tech staff are looking for work.
Senior Engineer Allan “Brownie” Brown needs a job as of June 22nd.
Project Engineer Koen Ambrose is also looking for work since at least July.
Michael Hodgson is now Former Chief Engineer of Cyclone Power Technologies, Inc.
Karl A. Petersen is the former VP of Engineering at Cyclone Power Technologies
"Cyclone-WHE has reassigned its project engineer for the WHE, Travis Love, from Florida to Columbus, Ohio" as of March 12th.
Nelson Hoyos, still listed as Director of Development for Cyclone Performance LLC, describes himself as past Driver for the TeamSteamUSA LSR Streamliner at Cyclone Power Technologies/Team Steam USA
That does it for everyone listed in product development at Cyclone, except for Harry, of course.
Hi Tom, I suspect the rough running is due to the new rotary valve.
There would be a squeal, a puff of steam from the valve and a shudder in the engine. My guess is the moving parts in the valve are trying to seize, being broken free by the engine torque, deforming, opening gaps and releasing steam. The leaking steam drops the pressure to some of the cylinders and causes the engine to 'misfire' on those cylinders.
Bearing in mind that there is no load on the engine, there is only enough steam being supplied to it to overcome internal friction, i.e., not very much. A little steam leakage would be enough to slow the engine.
The Ohio State University redesign of the WHE engine added a rotary valve. Maybe Harry is trying to use this on the Mark 5 to at least be able to demonstrate a Mark 5 running. Running, sort of.
Even with no load, low pressure and temperature steam, the rotary valve is in distress. A hundred horsepower of 3200 psi 1200F steam won't be tolerated for long by this valve.
What's Harry thinking? He now seems to be building a slightly larger WHE engine: low pressure, low temperature, low power and low efficiency. Yet another change of course for the Mark 5.
Maybe Frankie will tell him to stop playing with diversions, and deliver on his promises of a working Mark 5... ;)
A Mark 5 actually running. Sort of...
Cyclone posted a link to a video on Twitter.
It's 24 seconds of a Mark 5 running. Not very well, mind you, and not connected to a load. But other than the squeals, steam leaks and jumping around, it's "running sweet" as Harry would say.
Now this Mark 5 is missing the burner, steam generator tubing, combustion air preheaters, combustion air fans, feed water pumps, cam operated valves with cutoff control, supercritical steam, automatic clearance control heads, feed water preheaters at the cylinder exhausts and condenser.
Other than that it's pure Harry Schoell ingenious fully integrated and hermetically sealed Powerplant of the Future.
Christ, Chuk's badly injured and Harry starts bragging about going for the land speed record......
You'd think Harry might have the decency to wait until Chuk is at least out of the hospital.
Let's hope Chuk has a quick and full recovery. He's the guy who was doing rather than just talking.
Just when you thought Cyclone couldn't do any worse...
This morning's twitter message:
"Accidently, the wrong car for the run to go for the title was posted. This was a car Harry designed but never ran due to a misunderstanding."
It was just the body sold on ebay.
Chuk and Harry had a partnership where Chuk would design and build the car, Harry would build a fiberglass body for the car that would belong to Chuk, and Harry would supply a Cyclone engine.
Chuk had the car ready for the 2011 racing season, but Harry couldn't provide a working engine.
In early 2012 Chuk announced the partnership had ended. A few days later Harry announced that Nelson Hoyos, a race car driver, had been hired to lead the new "Performance Division" and that they had contracted with a race car builder to build them a new, better car.
Harry then sued Chuk claiming Chuk and stolen the body and acted in bad faith. (After Chuk had delivered the complete car as promised, and Harry had failed to deliver the promised engine.) Chuk returned the body and Harry dropped the suit.
Eventually Harry sold the car body on eBay for $3150. The listing said it had cost $70,000 to make.
The video of Chuk's car running at Bonneville in 2012 shows they wrapped some tin around the car frame to get some aerodynamics. He has since built his own body.
Cyclone's apparently even more hard up for publicity than I thought.
Today on their twitter feed they say they're still going after the steam car speed record.
But if you look close at the car, at the side of the cockpit it says "Chuk Williams". It's the car Chuk designed and built, and Harry could never provide a working engine:
Geez, after spending a reported half a million to build a car to beat Chuk, don't you think they'd use a picture of that car?
Of course, the difference between the two cars is that Chuk's car actually runs:
Better yet, buy a copy of the Army generator.
I'm sure Cyclone would be thrilled to send a proposal listing the price and guaranteed performance specifications.
The first one was $1.4m, but the second one should be less. Negotiations could be done on the fact that you can buy a name-brand (Perkins, Kubota, Izusu, Onan, Yanmar, Mitsubishi, etc.) 10kW diesel generator for $7-8K, that comes with a 1 year, unlimited hours warranty.
Let us know what Cyclone comes up with.
Ohboy, the PopSci award...
The 2008 article has a video of Harry describing his engine. As it turns out, he is showing the non-working mock-up of the Mark 6 truck engine. It's just a shiny plastic simulation of what Harry thinks a real engine would look like.
But, Harry Schoell being Harry Schoell, he doesn't give the slightest hint that it's not a real engine and that a real engine had not even been built by that point. He just goes on about how great the performance is.
It wasn't until the end of 2009 that Cyclone put out a PR Cyclone Power Technologies Runs Flagship Mark V Engine on Steam. And this "milestone" wasn't even for a complete engine, just a bit of one.
And then at the 2011 Shareholder Open House (scroll ahead to 14:30) they predicted the first running Mark 5 engine would be delivered to Raytheon in Q1 2012. (Raytheon never got a Mark 5.)
Now in the latest 10Q they say "With additional resources, our R&D team will also move towards completion of the Mark 5 project this year".
So Popular Science never saw an engine run before handing out the 2008 award. They mistook Harry's imaginings and hopes for fact.
Cyclone has been working on that 10kW generator since 2007. Here's a post Harry Schoell put on steam car club forum:
HLS
Re: Observations of performence, ,,,new/old
July 11, 2007 12:43PM
Hi Rolly.
I have a problem with titanum in the hot section even though it has a high melting point and exellent corosion resistance. All that changes above 600f where high corosion occours.
We are also currently developing a compact 10kw for the military for the Striker, Bradley, and Abrams.
Harry
On July 30, 2014, WHE GEN completed its $350,000 Seed Round offering, and paid to TCA Global Master Credit Fund LP, the Company’s senior secured creditor, approximately $78,000 to fully retire that debenture and release all of the Company’s assets from its security interest. WHE GEN also paid to the Company an additional $24,000 in reimbursements.
Hey Mayer, your DD is showing...
Funny how the trolls come around when the price is up. When it's down you are silent. I wonder why that is shorty?
Management is now seeking follow-on funding from both military and commercial groups to advance the technology into Phase 2 for durability and performance enhancement.
In the second quarter of 2014 the Company issued:
? An aggregate of 98,064,296 shares of common stock to 7 investment funds in connection with the conversion of approximately $468,000 in principal and interest on several separate convertible promissory notes.
Common stock, $.0001 par value, 900,000,000 shares authorized, 434,907,974 and 272,679,942 shares issued and outstanding at June 30, 2014 and December 31, 2013 respectively.
As of August 10, 2014, there were 552,913,309 shares of the registrant’s common stock issued and outstanding.
I've tried to figure out the assets, too.
Inventory: engine parts valued at the full cost including labor and overhead. They've written down the total by $100K.
So what is this stuff? All the trial and error they've gone through trying to make an engine work. Harry once mentioned on the steam car club forum having tested 20 different piston designs. Each of those one-of-a-kind prototype pistons might have cost $1K (or more). 20 designs that didn't work X $1K is $20K of inventory at cost. What's it worth on the market? Maybe $0.50 each for scrap metal.
They still have never publicly demonstrated a working engine, so you can put your own value on the inventory of parts.
Equipment: This was never broken down in detail, but there was a huge jump in value the year they had the LSR car built. Photos of their shop show an old mill and old metal lathe that would be the primary assets. (The woodworking equipment all around would belong to Schoell Marine.) There's some furniture in the office, but that's not worth much.
The biggest part of this category is the LSR car and the GG Mom boat. Both were built specifically for the Mark 5 engine, which has a strange shape for an engine. How many 100 hp vertical shaft engines can you think of?
Potential customers would have to do major rebuilds of the car and boat to put a conventional gas engine in. How many people would want to do that? Not many. So the market value of these assets is what you'd get from parting them out.
Patents: Although lots of money has been spent to get these patents, and they make nice decorations on a wall, they're only worth the revenue they generate. So far, that's been zero.
Most of the patents are for the "Schoell cycle heat regenerative engine" and its components. I think Tom will tell you that there are many, many expired patents that cover the same things, and that Cyclone's innovation was to package things differently.
I've been trying to find evidence that the "Schoell cycle" has ever been demonstrated to work, and have nothing yet. The WHE engine that kind-of works but hasn't been able to last 200 hours doesn't use the "Schoell cycle".
Several patents are for the WHE engine (same patent, but in different countries). Trouble there is that the Ohio State University engineers totally redesigned the WHE engine so it is no longer covered by the Cyclone patent.
There are lots of companies developing waste heat recovery engines, and they all know about the Cyclone patents, but nobody has has licensed them.
Previous licensees (Renovia, Great Wall, Raytheon, Revgine, Bent Glass...) haven't come back.
About the only value of these patents is to fool investors into putting up cash.
So, yeah, a bankruptcy auction won't net very much. I expect, though, that Harry has had Schoell Marine secure all these assets. When the end finally comes Harry will keep all his toys, still confident of their grossly inflated values.
No, irony and steam never seems quite right...
They do have time to update Facebook, though:
Cyclone Power Technologies The manufacturing process did not start until Q2 which takes a little time to get into place and this is not an internal combustion engine revised to make steam (iron block and steam never seemed right) it’s an entire new engine to manufacture.
Yesterday at 3:54am · 4
Matt Mason Are you referring to the manufacturer of the WHE?
Yesterday at 8:36am
CYPW: SEC Reporting - Delinquent
OTC Pink Limited Information
Designed for companies with financial reporting problems, economic distress, or in bankruptcy to make the limited information they have publicly available.
CYPW is long overdue on 10-Q filing, even with extension.
Someone pointed this out on the Yahoo board. The deadline for filing a 10Q for a June 30 quarter end is August 14.
After filing the NT-10Q there is a 5 day extension to August 19.
It's now the 26th, a full week past the extended deadline.
Considering they issued exactly one invoice in Q2, and the WHE Gen separation didn't start until July, seems a little surprising that it's taking so long to get the 10Q out.
Doesn't sound promising.
Hi Rudy, yes that is a little mysterious, isn't it.
Ultimately it doesn't matter too much, as that $140K is considerably less than one month's interest. It would just postpone the inevitable a couple weeks.
Hey, somebody has to be left holding the bag...
Thurday's news was HUGE. Cyclone got literally its first new customers since 2011. (Never mind the details of who those customers are. New customers are new customers.)
Even with that great news, Thurday's volume was the lowest in two weeks.
Friday's volume was the lowest in a month.
In fact, over the entire Friday afternoon, only 1.7m shares were traded, worth just $4K.
The obvious fact is that even with all this buzz, people aren't putting their money in.
Yep, the fans are staying away in droves...
The 10Q is going to be interesting reading. In Q1 the spend was $1097K and revenue was zero. The difference was made up by selling notes and stock. In Q1 stock price averaged $0.03.
In Q2 we know they got $140K for finishing the Army contract. They were still paying all the expenses for the WHE Gen division, and that interest costs have been steadily rising. The cash burn would have been similar to Q1, but the stock price was much lower. And what do you know? The rate of dilution increased dramatically in Q2: #msg-105457110
What about now? They shed WHE Gen, so save some cash there. $75K of WHE Gen's first round financing went to pay off one CYPW note, but all the rest remain. Interest charges will be larger than in Q1. So let's say the cash burn is $300K per month, or about $15K per business day.
If CYPW sells stock directly to raise this cash, right now ($0.0021) that means 7.1m new shares per day being issued.
That's in addition to millions of new shares issued every time a note converts.
It's going to be really, really tough for share prices to increase when there's that many new shares being constantly issued.
No wonder people aren't putting their own money in.
Hey Tom, have a look at the Green Turbine website (Cyclone's new customer, twice removed. Or is that three times?)
They are a direct competitor to Cyclone. They are targeting waste heat and burning biofuels markets.
They finished their very first 15kW prototype in July, and posted a video.
They're still fooling with an early prototype in Holland, and there's nothing in Canada (at Canada's "leading turbine integrator"...).
So their order won't be for more than one pump and heat exchanger. Since these parts aren't covered by patent, they're just going to reverse engineer them and use any good ideas in their own products.
Maybe they'll put out a press release when a machine shop agrees to sell to them. ;)
Fact is, those cheering for CYPW ain't buying.
As the sticky post says, yesterday's PR was huge. These are literally Cyclone's first new customers since Combilift in 2011. And what happened?
Lowest volume in two weeks.
Total trades of only $19K
If each of the CYPW fans on this board bought only $2K on this news, volume would have doubled and the price would have gone up.
And look at all the $20 trades so far today.
The smart money is moving on to greener pastures.
So let's look at the short term financial position:
Period Ending____Dec 31, 2013____Dec 31, 2012____Dec 31, 2011____Dec 31, 2010
Interest Expense____$924K_________$243K_________$44K_________$40K
and in Q1 2014 interest expense was $445K (plus $55K in derivative costs).
This has all come from the convertible notes they sell to keep operating. They have to sell more and more notes to get the cash to service interest on the existing notes.
People were buying the notes because they believe they can sell the stock later. When they stop believing that, the existing note holders won't get their interest and all the notes go into default.
A $50K note now converts to 76 million new shares issued. At the end of Q1 there were $650K in notes. That's going to be a lot of new shares.
And we all know the rate of dilution is dramatic and has been accelerating. #msg-105457110 The last two weeks show how hard it is to keep the price up under that pressure.
So here's the thing: as the fans of CYPW conclude this dog don't hunt, they're going to move on one by one. They'll cash out, putting more downward pressure on the price and won't be here cheering anymore.
The delayed 10Q won't help, either.
People can see for themselves what the smart money is doing here.
Will the shell be sold, or CYPWQ?
My bet is bankruptcy. The debts are greater than what the shell would sell for, and since Cyclone owns Harry's patents, the new owner would get those. There's no way Harry's ego would let that happen.
$75K out of WHE Gen's first round of financing went to pay off Cyclone's secured creditor that had the patents and all of Harry's toys. This was probably the carrot Chris Nelson used to get Harry to give up the WHE division and turn it over to Chris. Why else would a new venture be using its initial capital to pay off someone else's debts?
Once the security was released on those assets, I'll bet the biggest creditor stepped in and grabbed the security. The biggest creditor being Schoell Marine.
So Harry can put Cyclone into bankruptcy, Schoell Marine gets all the assets (i.e., Harry's patents and toys), the note holders and other creditors get nothing and anyone holding stock gets wiped out.
Harry keeps his toys and carries on.
Cyclone has been relying on convertible notes for operating cash for the last couple years. New notes need to be sold for cash to pay the interest on the existing notes. Interest becomes a bigger and bigger proportion of the budget (it was about 44% in Q1). Toxic financing in action. Plus massive dilution.
And when the delayed 10Q comes out, it's going to be even worse than Q1.
Will anyone be able to keep the price up for long?
"Mr. Fruge" is actually Frankie, who is Harry's main squeeze along with being president of Cyclone.
The gonextgrid.com DNS record has the owner's identity hidden, but brent@gonextgrid.com is the contact person for a number of other sites, including GreenTurbine.com:
Admin Name: Brent MacKinnon
Admin Organization: NextGrid Inc.
Admin Street: 4950 Winston Churchill Blvd
Admin City: Mississauga
Admin State/Province: ON
Admin Phone: 4163474650
Admin Email: brent@gonextgrid.com
Matt Mason Please confirm the name and location for "Ark Technologies". No entity with that name and city location is registered with the Sec. of State of Alabama.
one announcement with Raytheon could bring this up to .05-.10 within minutes
CYPW, TEN years and ZERO products
Cyclone sold a worldwide license to Revgine for engines for lawn and garden equipemnt, but Cyclone couldn't deliver a working engine, and the deal fell through.
Cyclone sold a worldwide license to Renovalia Energy, S.A., for engines for the solar and alternative energy market, but Cyclone couldn't deliver a working engine, and the deal fell through.
Cyclone sold a Chinese market license to Great Wall Alternative Power Systems, for engines for the biomass to power market, but Cyclone couldn't deliver a working engine, and the deal fell through.
Cyclone sold an industrial waste heat generator system to Bent Glass Design of Pennsylvania, but after years of trying to work the bugs out, that story suddenly went cold.
Cyclone sold an "undisclosed" number of 80W backpack generators to MEO Products Ltd, a UK defense contractor, but but Cyclone couldn't deliver a working unit, and the deal fell through.
Cyclone sold two Mark 5 engines to Raytheon for underwater vessels, but in the end delivered two "Manta 36" basic engines with far lower performance than promised from the Mark 5s. There's been no more word from Raytheon since then.
Cyclone sold a worldwide license to Combilift of Ireland, for engines for the construction machinery market, and promised delivery of two Mark 5 engines for Q2 2012 but Cyclone hasn't delivered them yet.
Cyclone sponsored Chuk Williams' car for an attempt on the world land speed record for steam cars by agreeing to provide an engine. Chuk build a car specifically to fit a Cyclone engine, but Cyclone couldn't deliver a working engine and the deal fell through.
Cyclone then spent $500K to build a better car (to show up Chuk), but Cyclone still hasn't delivered a working engine and the car has been collecting dust without one.
Cyclone formed a joint venture with TopLine Automotive Engineering Inc., who built and evaluated some Cyclone engines, but the deal fell through.
Cyclone has also attended a number of Society of Automotive Engineers trade shows with lots of plastic mock-up engines, but nothing that actually ran. The auto industry knows what Cyclone is doing (and there is a lot of work going on in the auto industry on Rankine cycle waste heat recovery systems), but no one is bothering with Cyclone or their technology.
Cyclone has also built a custom speed boat, the "GG MOM" for setting a water speed record, and hyped it through the marine industry, but they've never put an engine in the boat and it's also been collecting dust for years.
Is there an industry that Cyclone hasn't failed in yet? What potential customer isn't going to find these failures?
After 10 years and 10s of millions spent on development, Cyclone has still never publicly demonstrated a working engine.