Hey Creston, the quarterly reports for 2016 were unaudited and the auditors wanted to make sure everyone understood they had nothing to do with the numbers.
I don't see unaudited quarterlies as a biggie. Cyclone stiffed their auditors for $85K on the annual reports so they obviously don't have any money to pay for audits on the quarterlies. I also believe Cyclone should have been filing reports, unaudited if necessary, all along. Especially since they brag about their President being a former auditor.
The letter from the auditors in the annual report is unusually long with very convoluted disclaimers. For instance: "Our audits include examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements." "On a test basis" means they didn't verify everything so if it turns out the inventory asset is actually worthless junk the auditors have an out.
Something interesting for the first 9 months of 2016 is their spending:
OPERATING EXPENSES
Advertising and promotion ........ 7,986
General and administrative ....... 655,308
Research and development ......... 131,827
For every dollar of R&D they spent $4.97 in General & Administrative. Interest expense was in addition to this. As always, there is no explanation of where all this money went.
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