I read this and I agree. Thanks Buddy!
Hi Marlin, somebody did mention on this board a while back having contacted the SEC and was basically told they are short-staffed and Cyclone was too small a fish to bother with.
The biggest piece of investment money in Cyclone just disappeared into "General and Administrative" expenses. They've never broken down that spending, but after reading every financial report Cyclone has put out the only place I found it could have gone to was a services contract with Schoell Marine, Harry Schoell's private company.
For example, Cyclone shareholders paid premium rent to lease the entire Schoell Marine building, but every photo taken in the place shows boat building and boat repair always took up most of the building. It wouldn't be at all surprising to find that "Cyclone" employees had been doing Schoell Marine work, with Schoell Marine pocketing the extra profit. And who knows what Schoell Marine charged to provide labor to Cyclone. The $10 per hour boat washers at Schoell Marine might have been billed out to Cyclone at $100 per hour.
It's just really hard to reconcile the tens of millions that Cyclone spent with how little they have now.
Cyclone itself has no assets and lots of debt. The money that Harry Schoell and Frankie Fruge took out of the company no doubt has been put in places that would be hard to reach. A lawsuit would be extremely expensive, especially as it would have to be proven that the executives and board of directors (including some independent directors) intended fraud and not that they were just poor managers and ignorant inventors.
The fact that Cyclone swindled so many small investors (e.g., $65 million over 5000 people is $13,000 each) means it's unlikely there are enough with deep enough pockets to fund a lawsuit.
I was once told the first thing they teach in law school is "Don't sue a poor person". Even winning a suit would just start the battle to find and get the assets.
