SOURCE: Cyclone Power

November 09, 2015 14:02 ET

Cyclone Power Technologies Releases Progress to Shareholders

POMPANO BEACH, FL--(Marketwired - Nov 9, 2015) - Cyclone Power Technologies (OTC PINK: CYPW), is releasing the following progress report to its shareholders:

Dear Shareholders:

Cyclone Power has been working very diligently on its primary focus of getting product to market. We completed Beta testing and have made large strides towards the production of the Mark 1 (5.5 HP constant duty rated) and Mark 3 (22HP constant duty rated) engines. Our prime manufacturers and integrators will have final pricing available soon so that Cyclone can begin taking purchase orders for generators powered by the all fuel Cyclone engines. Cyclone's prime integrator for an all fuel generator has stated they will have product ready for delivery in Q2 of 2016. There are two additional OEM's ready to purchase the engines for integration into their products. One is an ATV (all-terrain vehicle-US based) and the other is solar (European).

Accounts Receivable and Delivery Status

The spinoff of WHE GEN renamed Q2 Power, caused a deficit of $168,750 from our prior projected funds and resulted in a related $168,750 receivable to be collected from the sale of 625,000 shares in Q2 Power. This still has not been paid and demand for payment has been made for a second time. We are still pursuing this demand for payment and feel this is in violation of the separation agreement which includes their license with Cyclone. 

Completion of the Combilift contract will allow us to collect $300,000. We are pursuing invoice financing to complete this order. The project is in the final process of the 50-hour testing, and we are working toward a 2015 delivery. This effort was delayed due to the resources going to development of the WHE engine and overhead expenses for SEC compliance. Combilift's owner will be here this month, to assess our progress. 

Revenue & Expenses 

Management is continuing its efforts to channel resources to revenue-producing projects. With the projected royalty streams from WHE-GEN, revenue from the sales of the Cyclone Engine integrated into a power generation system to distributors, income from R&D, distributors fees, and the finalization of the integration of the Cyclone engine to commercialized products, we feel that our business model is finally coming to fruition.

The decision has been made to submit a Form 15 with the SEC allowing Cyclone to report and file unaudited financials on a different venue. We will then file our financials with OTCBPK (Pink Sheets Management Company) and pay them an annual fee to report. The unaudited financials will be in the dsame format as previously filed financials however, Cyclone won't have the added significant expense of outside auditors and lawyers. At an appropriate time in the future we can resume filing audited financials.

Technology and Business Advancements

The Company has made considerable progress towards the commercialization of our products. Cyclone has identified and is using two manufacturers for the Mark 1 and Mark 3 Engines. TAW Power Systems, Inc., a generator power integrator and manufacturer, has given us an LOI and we are finalizing the integration of the Mark 1 and Mark 3 engines with them for sales to our distributors. Under our new business model, Cyclone will be the buyer of the Cyclone Engine Powered Generators from TAW Power Systems and will sell them to our distributors worldwide. Currently there are two distributors ready to take the first production generators. The Company has signed numerous agreements with international engineering and consulting companies to represent us both to their clients and in broader markets. Our focus is on revenue from sales of products, sales to distributors and Q2 Power royalties.

3R A/C, a China based OEM, has reorganized and is now known as 3R Denmark. 3R has asked for a 90 day extension to finalize the agreement with Cyclone for the integration of the Cyclone Engine into their system. They have agreed to our original plan of bringing three of their units, two of their engineers, and their electronic technology to the Cyclone facility. Cyclone engineers and the 3R engineers will assemble two complete units, ship one back to China, and keep one here at Cyclone's facilities. Cyclone will also have the rights to 3R technology in North America.

Cyclone has identified and has LOI's with two major international Military suppliers. The foremost factor bringing them to Cyclone is the "One Engine All Fuel" technology. This simplifies the "marketing" to military organizations all over the world enabling them to sell one engine for users of different fuels. This also enables Cyclone to have international distribution with companies that have the knowledge of State and Defense Department criteria. We are currently working on an initial order with TAW Power Systems of 300 Cyclone powered generators with delivery to begin within the next 12 months.

The strategic compliance with EPA requirements for our all fuel engine is complete for 25 HP and under for systems utilized for power generation. Cyclone has also received the California Air Resources Board (CARB) certification for power generation in California. California also has some local permitting requirements but compliance with those will be the responsibility of our distributors.

Cyclone is identifying a strong management team to take our products worldwide. There are several candidates who and will be on board as funding permits. This is a critical step in our steady growth into the global market.

We have not had extra resources to devote to our Land Speed Record attempt, and therefore, have delayed it until 2016. Both the LSR Steamliner and the Combilift equipment utilize the Mark 5 (100 HP) engine. This is a remarkable engine that we expect to have available for manufacturing in mid-2016.

Capital Markets and Funding

We have seen continued pressure on the public markets side for our Company's valuation. It is also a result of certain promissory notes being converted to common stock and sold into the market over the last year. Cyclone issued these convertible notes prior to the WHE-GEN spin off over a year ago. Much of the notes were to retire prior debt that held our patents as collateral. The termination of the patent incumbent would ultimately allow the spinoff of WHE-GEN. The new debt had an average of 50% to market discount on conversion of debt to stock. Due to the structure of this debt funding it created non-cash accounting losses to Cyclone based on the convertibility of debt to stock. This has nothing to do with actually cash spent on Cyclone's business. The Company is grateful to these funding groups, and understands that liquidating their positions periodically is a standard investment strategy for them. Additionally we had to increase our authorized common stock levels to accommodate the convertible contracts that obligate the Company.

One should not correlate the common stock selling activities with the progress of our business model and the viability of our technology. We are a viable company for the clean-tech and green-energy funding sources and we believe that our story is quite compelling:

  • Globally patented engine technology with potentially "game changing" attributes.
  • Worldwide markets with a current invested customer base that includes the U.S. Army and Fortune 150 Corporation.
  • Focused path to commercialization for our initial engine products.
  • Experienced technical team, manufacturers, and integrators.
  • Current focus on sales and revenue.

We trust our shareholders and supporters must not overlook these strengths of Cyclone, as they truly separate us from the vast majority of "micro-cap" companies out there. We are energized by our strengths and accomplishments, and will continue to work diligently until we have yielded results for our shareholders. 

On behalf of the entire Cyclone team, thank you for your support.

Cyclone had prepaid for 10 press releases this year and this is the tenth. The next one will not be until after the first of the year. Please do not hesitate to call the office; however we can only reiterate what we have released to all investors.

Sincerely,

Frankie Fruge′
President

Safe Harbor Statement
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The company cautions that these forward-looking statements are further qualified by other factors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.

About Cyclone Power Technologies
Cyclone Power Technologies is the developer of the award-winning Cyclone Engine -- an all-fuel, clean-tech engine with the power and versatility to run everything from waste energy electric generators and solar thermal systems to cars, trucks and locomotives. Invented by company founder and Chairman Harry Schoell, the patented Cyclone Engine is a eco-friendly external combustion engine, ingeniously designed to achieve high thermal efficiencies through a compact heat-regenerative process, and to run on virtually any fuel -- including bio-diesels, syngas or solar -- while emitting fewer greenhouse gases and irritating pollutants into the air. The Cyclone Engine was recognized by Popular Science Magazine as the Invention of the Year for 2008, was included in a 2011 report by Popular Mechanics as an important waste energy technology for the future, and was twice presented with the Society of Automotive Engineers' AEI Tech Award. Additionally, Cyclone was named Environmental Business of the Year by the Broward County Environmental Protection Department. For more information, visit www.cyclonepower.com.

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