Hi MTM, here's my guess. I don't know about bankruptcy in Florida, either, but I would suspect no one would go for a Chapter 11 restructuring and wiping away the debts. Their business plan has always been that they'll hemorrhage money until the technology works. Hard to imagine a bankruptcy court cancelling debt with such a plan.
All of Cyclone's assets had been secured by Schoell Marine before Harry had to pledge them an outside lender. Part of the deal giving WHE to Chris Nelson was that WHE GEN would pay off that note and release the security.
The Q2 10Q listed $476,962 in deferred salaries and $785,004 owed to Schoell Marine.
I'll bet that Schoell Marine has secured all Cyclone's assets again.
WHE GEN paid Cyclone $675K cash. If Harry and Frankie were planning to wind up Cyclone, where do you suppose they'd put that cash? I'd guess to deferred salary and the remainder to the Schoell Marine debt.
Stock can continue to be sold for a while to raise some more cash from the market. Some can keep the lights on and pay for more PRs, and some can go to Schoell Marine.
Once that dries up, Harry will put Cyclone in bankruptcy. Schoell Marine, as the only secured creditor, has first pick on the assets. I don't know the law, it might be that Schoell Marine would have to liquidate the assets, take cash for their debt and distribute any remainder to the other creditors.
In that case Harry (or a proxy) would buy his patents and toys back at the auction for 5 cents on the book value dollar.
The shell might be worth something. The cash raised would all go to paying the Schoell Marine debt.
Cyclone would be gone, creditors get nothing and Harry and Frankie ride off into the sunset with a LSR car and boat full of money.
AI
