Cyclone has something, alright, a proven formula for swindling investors and staying out of jail.
As for technology, not so much.
Here are a couple slides from the 2011 Shareholder Open House from the presentation on file at the SEC
Yep, it's almost seven years ago now that Harry Schoell looked investors in the eyes and told them all the technological problems had been overcome.
And of all the "critical" tasks on this chart, the only ones ever completed were a delivery of a prototype to the Army (and never disclosing what the actual performance of the unit was) and delivery of two "MR-36" prototypes to Raytheon (stripped-down, derated versions of the Mark 5). Neither of these customers came back for more, nor is there any indication they ever ran their Cyclone engines after receiving them.
The first task they confidently predicted in December 2011 was delivery of engines to Phoenix Power. Phoenix is still waiting. The last video of the Mark 5 showed a pathetic thing that couldn't even spin at constant speed with no load on it.
How could Harry Schoell and Frankie Fruge have been so completely wrong in what they told investors? How could they have made a continuous stream of claims since then that engine production would start in six months and with each claim proven wrong, make a new claim that engine production would start in the next six months? How is it that here we are seven years later with not only no engines in production, nor any engines publicly demonstrated as working, yet a new promise that 1500 hp Mark 10 engines are going to be completed by the end of this year? And how is it that Harry Schoell and Frankie Fruge have not provided a single reason why they have failed to meet all those promises to shareholders?
The short answer is that they've been lying. They know the engines don't work and that they haven't a clue as to how to make them work. In fact, Harry Schoell isn't even trying to make engines that work. The engineers at Ohio State University demonstrated how the "spider bearing" was causing rapid engine failure and they designed it out. That failure mode stopped, but then water lubrication became the show stopper that they couldn't solve. Schoell is still trying to make his "spider bearing" and water lubrication work even though in 14 years and tens of millions of investors' money squandered, he still hasn't been able to make a steam engine run for 10 hours without self destructing.
Apparently the two are now telling people the Cyclone engine is wonderful because it doesn't use bushings (aka plain bearings), even though their own patents show the engines use lots of plain bearings.
The last 10Q showed that recent money they've received from the Secret Investor has preferentially been spent on paying related-party debts while all other debts are in default. The related parties? Why Harry and Frankie, of course.
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