POMPANO BEACH, FL, November 20, 2013. Cyclone Power
Technologies (OTCQB: CYPW) has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q for the
period ended September 30, 2013, and has released the following
progress report to its shareholders:
Dear Shareholders:
Warm greetings from South Florida! Through the third quarter of
2013, Cyclone has made substantial advancements in our core
technology, added key partners to assist in the commercialization
of our engines, and continued to generate revenue and decrease
operating expenses. Our Quarterly Report on Form 10-Q was filed
with the Securities & Exchange Commission this week, and we
urge our shareholders to review it. Notable achievements during the
period and additional forward looking information are highlighted
below:
Continued Revenue & Decreased
Expenses
Cyclone generated $715,382 of revenue during the nine month
period ended September 30, 2013, which was slightly less than the
same period in 2012 of $882,490. However, operating expenses
for the 2013 period decreased approximately 23% and net loss
decreased approximately 12% over the same period in 2012.
Management has made a sincere effort to cut costs and focus
resources on revenue-producing projects that are most likely to
result in widely marketable products. We are extremely
encouraged by this positive trend which will form the foundation
for future growth, including the commencement of engine sales in
2014.
Technology and Business Advancements
The Company has made considerable progress towards the
commercialization of our Waste Heat Engine (the WHE™). This summer
we commenced work with The Ohio State University's Center for
Automotive Research (CAR), and in just a few months they conducted
extensive internal dynamic analysis and, in conjunction with
Cyclone's engineering team, assisted in updating the design and
completing the re-build of this compact external heat engine. The
resulting model - labeled the WHE-DR, which stands for "delta"
(3 cylinders) and "rotary" valve - has now demonstrated
increased durability, decreased noise and vibration, and the
elimination of over 60% of its moving parts. This is expected to
cut manufacturing costs in half, thereby greatly increasing overall
marketability of this
product.
Based on these advancements, our plan is to start transitioning
the WHE-DR to limited scale manufacturing by the end of this year
and have our first-release engines delivered to customers in Q1/Q2
of 2014. It is important to understand that these engines will not
be available for widespread commercial sales just yet. Rather,
these engines will be sold to our "vertical technology"
partners - companies including Phoenix Power that integrate
our engines with waste motor oil furnaces, B&W Constructors
that builds methane digesters and flares for small pig farms, and
Clean Carbon that works with technologies like biochar kilns to
convert agricultural waste to usable byproducts.
These three customers have already provided letters of interest
for the first 300 engines we produce, and Phoenix has committed to
a minimum of 6,000 engines over the first five years in order to
maintain its full licensing rights. There are also hundreds of
other companies that manufacture heat producing equipment for which
our WHE-DR will provide a material "value-add" to the end-user in
the generation of shaft power from otherwise wasted heat. Our sales
projections for the first-release WHE-DR are approximately $2
million in 2014 - revenue which will support the mass
manufacturing phase of product development.
We believe that the team we have compiled over the last few
months, including CAR and our manufacturer Precision CNC, provide
greater credence to our forecasts for product readiness. These
partners significantly increase our collective skills, knowledge
and resources in technology commercialization. Management hopes
that our shareholders realize how important this team-building is
to the success of our growing business, and how we have made great
strides in these pursuits over the last year.
Our focus this year has been to bring products to market as
efficiently as possible. Because of these strategic choices,
there are some projects that will not be completed in 2013 as
previously discussed. The delivery date of our U.S. Army contract
has been bi-laterally extended until April 2014, in part due to
government delays outside of our control. Additionally, we have not
had the resources to devote to our Land Speed Record attempt, and
therefore, have put it on hold this year. Similarly, our Combilift
project will be extended into 2014. Both the LSR streamliner
and the Combilift equipment will utilize the Mark 5 model engine,
which is truly a remarkable product that we will finish prototyping
in 2014. These announcements should not disappoint, but rather
reassure our shareholders that we are focused on completing our
first product (the WHE) that will provide significant sales revenue
starting next year.
Capital Markets and Funding
We have seen continued pressure on the public stock market side
of our business. Admittedly, this is partly because our development
has taken longer than previously anticipated, which is addressed
above. It is also a result of certain promissory notes being
converted to common stock and sold into the market over the last
few quarters. Like many other micro-cap entities, Cyclone issued
these convertible notes over the last year to fund a material
portion of our operational and R&D shortfall. The Company is
grateful to these funding groups, and understands that liquidating
their positions at note maturity is a standard investment
strategy.
As a long term stock holder, one should not correlate these
selling activities with the progress of our business model and the
viability of our technology. Further, some positive consequences
have resulted from our reduced market capitalization; namely, at
our current valuation we now fit the models of many more strategic
long-term investor groups. To these clean-tech and green-energy
funding sources we believe that our story is quite compelling, as
Cyclone has demonstrated:
- Globally patented engine technology with potentially
"game changing" attributes
- Worldwide markets with a current invested customer base
that includes the U.S. Army
- Focused path to commercialization for our initial engine
products, which is showing clear results
- Experienced technical team, manufacturing experts, and
management that is finding its stride
- Current revenue with consistent sales forecasted to start
next year
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 proud of and
energized by these accomplishments, and will continue to work
diligently until they have yielded results for our
shareholders.
On behalf of the entire Cyclone team, thank you for your
support.
Sincerely,
Harry Schoell
Chairman
Christopher Nelson
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 http://www.cyclonepower.com/.
Company Contact
Christopher Nelson
Tel: 954-943-8721
info@cyclonepower.com