Cyclone Power Technologies, Inc. (fka CYPW)

[BuddyWhazhizname]

Phoenix engine acceptance criteria: (http://www.sec.gov/Archives/edgar/data/1442711/000139843213000687/ex10-25.htm)
in Development Fees & Milestones

$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;

and

A “working prototype engine” as used herein, is defined as a complete working WHE engine in its pre-production configuration (as defined below). The final working prototype engine will have been thoroughly tested by continuously running the engine at a minimum of 200 hours (or such other testing criteria that the parties mutually agree at a later time), at an output of 10hp to 20hp and ready for small-scale production.

and

The final working prototype engines will be replicated from a test engine(s) that shall have been thoroughly tested to meet the design criteria. The working prototypes engines shall then be tested for such time to assure that they meet the same operating and durability standards as the test engine and provided for in this Agreement.

OK, so the first WHE test prototype has to achieve 200 hours of continuous operation under a 10-20hp load at OSU for Cyclone to get a $150K development payment. Then each of the ten "working prototype engines" will also have to meet the 200 hours of continuous operation under load test. This info gives us some idea of the state of engine development.

This agreement was signed on September 30, 2013. The November 5, 2013 Press Release said

The model engine, called the WHE-DR, is currently in testing and is expected to be ready to transition into limited production by the end of this year.

and

Initial testing has demonstrated significantly smoother and quieter operation, which is expected to result in the successful completion of durability tests over the next two months.

Their two month projection is now into the seventh month. If the first engine met the durability requirements then no doubt some press releases would have been issued. So the engine won't yet last 200 hours.

The other fly in the ointment (in the agreement) is:

The parties understand that the working prototype engines that Cyclone delivers will be “pre-production”. They will be usable for beta installations, small-scale production and replication, and will be designed with theoretical but untested engineering parameters to ultimately run in the production phase for at least 5,000 hours.

These "theoretical engineering parameters" are going to be quite a trick. OSU is inventing new bearing and sealing materials. How can they possibly know one will theoretically last 5000 hours in an engine without having tested the material under load for that long?

Phoenix has a lot of wiggle room to avoid paying for engines.