Saturday, June 08, 2013 2:43:52 PM
WHE
http://www.cyclonepower.com/whe_video.html
In connection with our Annual Report last month, we provided an update on each of Cyclone's current projects and contracts. While we continue to make excellent progress on these endeavors, we would like to use this shareholder communication to provide greater visibility about our plans to commercialize our engine technology and expand sales in the next 12 months.
Three Cyclone engines are currently in development: the WHE-25, the S-2 (under contract with the U.S. Army) and the 100hp Mark 5. Of these models, the plan to commercialize the WHE-25 for micro-grid waste-to-power applications is the closest to realization.
Development Partners: We believe that the WHE-25 has satisfied its "proof-of-concept" stage -- we have achieved several hundred hours of aggregate run-time, generating power under the load of a dynamometer or electric generator. The next step in development is to achieve continuous operation of the engine in a rigorous thermal cycling environment with third party validation. For this stage, we have recruited the prestigious Ohio State University's Center for Automotive Research (CAR), which will commence work with Cyclone this month. Our plans with CAR are twofold: (i) conduct a thorough analysis of the mechanical design of the WHE-25 to predict stresses and potential weak points during durability testing, and then (ii) conduct that durability testing. We anticipate this process will occur over the next six months.
Manufacturing: We continue to push ahead to establish a base of manufacturing operations near CAR at the Ohio facility of our partner Precision CNC. We expect over the following few months to complete our joint venture agreement with Precision CNC, which will allow us to co-locate engineers and equipment, and leverage the machining expertise and production oversight that their management provides. We anticipate that the State of Ohio may provide certain incentives to assist us in this process, including low interests loans, tax abatement and possible development grants. Regardless of State assistance, however, we are currently budgeting for this critical stage of growth and engine development.
Early Adaptor Sales: Already, Cyclone has a long list of early-adaptor "beta" customers for the first release (Gen-1) WHE-25, which we expect to be ready by the end of this year. This Gen-1 engine will be sufficiently validated for pilot programs and integration projects with manufacturers of vertical technologies -- i.e., biomass gasifiers, wood pellet stoves, used oil and waste furnaces, and other similar products. Deposits for these initial sales could be accepted by the third quarter, with delivery of the engines commencing by the end of 2013. These Gen-1 engines will command a premium over the eventual commercial price due to the requirements of early customers to complete and validate their own technologies. Consequently, our revenue projections for Gen-1 engines are between $2.5 million and $3 million which will help fund the final phase of development: engineering for manufacturability. This we believe can be completed in 2014.
http://www.cyclonepower.com/whe_video.html
In connection with our Annual Report last month, we provided an update on each of Cyclone's current projects and contracts. While we continue to make excellent progress on these endeavors, we would like to use this shareholder communication to provide greater visibility about our plans to commercialize our engine technology and expand sales in the next 12 months.
Three Cyclone engines are currently in development: the WHE-25, the S-2 (under contract with the U.S. Army) and the 100hp Mark 5. Of these models, the plan to commercialize the WHE-25 for micro-grid waste-to-power applications is the closest to realization.
Development Partners: We believe that the WHE-25 has satisfied its "proof-of-concept" stage -- we have achieved several hundred hours of aggregate run-time, generating power under the load of a dynamometer or electric generator. The next step in development is to achieve continuous operation of the engine in a rigorous thermal cycling environment with third party validation. For this stage, we have recruited the prestigious Ohio State University's Center for Automotive Research (CAR), which will commence work with Cyclone this month. Our plans with CAR are twofold: (i) conduct a thorough analysis of the mechanical design of the WHE-25 to predict stresses and potential weak points during durability testing, and then (ii) conduct that durability testing. We anticipate this process will occur over the next six months.
Manufacturing: We continue to push ahead to establish a base of manufacturing operations near CAR at the Ohio facility of our partner Precision CNC. We expect over the following few months to complete our joint venture agreement with Precision CNC, which will allow us to co-locate engineers and equipment, and leverage the machining expertise and production oversight that their management provides. We anticipate that the State of Ohio may provide certain incentives to assist us in this process, including low interests loans, tax abatement and possible development grants. Regardless of State assistance, however, we are currently budgeting for this critical stage of growth and engine development.
Early Adaptor Sales: Already, Cyclone has a long list of early-adaptor "beta" customers for the first release (Gen-1) WHE-25, which we expect to be ready by the end of this year. This Gen-1 engine will be sufficiently validated for pilot programs and integration projects with manufacturers of vertical technologies -- i.e., biomass gasifiers, wood pellet stoves, used oil and waste furnaces, and other similar products. Deposits for these initial sales could be accepted by the third quarter, with delivery of the engines commencing by the end of 2013. These Gen-1 engines will command a premium over the eventual commercial price due to the requirements of early customers to complete and validate their own technologies. Consequently, our revenue projections for Gen-1 engines are between $2.5 million and $3 million which will help fund the final phase of development: engineering for manufacturability. This we believe can be completed in 2014.
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