Cyclone Power Technologies Releases Letter to Shareholders; Demonstrates Progress in Engine Commercialization Program

Cyclone Power Technologies Inc.


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Cyclone Power Technologies Releases Letter to Shareholders; Demonstrates Progress in Engine Commercialization Program

POMPANO BEACH, FL, February 11, 2014 - Cyclone Power Technologies (OTCQB: CYPW) has released the following annual progress letter to its shareholders: 

Dear Shareholders:

Greetings from Florida and Ohio!

While our annual report with financial statements for 2013 will be filed in March, we wanted to provide our shareholders with an update showing our progress in the previous year and expectations for the current year.

We saw substantial growth for Cyclone as a business and technology company in 2013.  During this period we set a solid foundation to accomplish the goal of bringing our first engine (the Waste Heat Engine, also called the WHE-DR) into manufacturing in 2014.  These achievements included:

    -    Partnering with The Ohio State University’s Center for Automotive Research (CAR), which has brought the expertise of several senior engineers with vast backgrounds in multiple disciplines critical for the success of this commercialization program;

    -    Forming a joint operating agreement with our manufacturer, Precision CNC, including moving our waste-to-power division (Cyclone-WHE) into their facility – a new building with the equipment and growth capacity to ramp up to production of over 30,000 engines per year;

    -    Completing our development and testing of the WHE-DR engine at our R&D center in Florida, and transitioning that program to our team in Ohio, including moving the engine, testing equipment and other resources to both CAR and Precision CNC in January;  

    -    Establishing a base of over 100 potential customers inquiring about the first WHE-DR engines, and obtaining letters of interest for the initial 300 engines from our current partners, and early commitments for over 6,000 engines during the first five years of production; and

    -    Forging strong ties with local leaders in Ohio, and pursuing grant and loan opportunities to help fund the next phases of engine development.

As these accomplishments demonstrate, the transition into a manufacturing mode for the WHE-DR has begun. Over the next few months we plan to further strengthen and scale-up the size of the engine (in terms of power output to about 20 horsepower) to expand our potential sales market. We are also preparing our production facility and adding team members with deep manufacturing expertise. Based on these milestones, we feel confident that our sales for the limited first generation WHE-DR will be approximately $2 million in 2014 – revenue which will support the next mass manufacturing phase of product development.

We have also made great headway in securing long-term funding to support the WHE-DR commercialization project both in the private and public sectors. Just this month, we received a commitment for the first $100,000 in project funding from a private investor. This party has indicated that he would fund up to another $500,000 if certain milestones are met, such as expanding our team in Ohio, establishing strong design engineering protocols, and meeting a development schedule that includes commencement of production of the first generation WHE-DR engines in the next few months.  

In short, during the past year we have secured the engineering, manufacturing and customer /partner base to commercialize the WHE-DR in 2014. These are all groups committed to the success of our program, demonstrated by their investment of significant money and time to this mission. Funding now appears to be coming which will propel this project forward. We feel confident that we now have the components in place to give us the best chance of success.     

As our WHE project progresses in Ohio, our core R&D team in Florida has greater resources to complete several other important projects in 2014, including the U.S. Army / TARDEC engine, designed to be used as a 10kW auxiliary power unit (APU) for combat vehicles. This Phase 1 development program is expected to be completed by our delivery date in April. We are now seeking follow-on funding from both military and private groups to advance the technology into Phase 2 for durability and performance enhancement.  

With additional resources, our R&D team will also move towards completion of the Mark 5 project this year.  This engine is to be delivered to Combilift for clean-burning material lift equipment, and used in Cyclone’s land speed record (LSR) streamliner to attempt a run for the fastest steam car on earth.  These are both exciting projects that can lead to additional development contracts, strategic partners, and eventual engine sales.        

We are also pursuing other major R&D contracts that both support and build-off of these two engine programs. This includes marine and renewable power applications.     

Capital Markets and Funding

From a corporate and structural stand-point, we have and will continue to make decisive steps to mature our company and prepare it for the next level of growth. By “next level,” we refer to attracting funding from investors with long range horizons and strategic partners who can add value from multiple directions. From there we will be able to set a path to up-list our stock to a National Exchange, thus providing more stability and liquidity for our shareholders.

To get these funding groups on board and position ourselves for up-listing, we must show our dedication to strengthening our balance and capital structure. With this in mind, we are currently announcing that management this quarter has converted a total of $1.6 million of deferred salaries and debt owed from the Company since inception at an equivalent of $.08 per share. This will reduce our liabilities dramatically, and demonstrate management’s strong faith in the future of Cyclone. 

Management is also seeking strategic acquisitions in the areas of manufacturing and clean energy technologies with vertical synergies. There are several potential candidates with current, consistent revenue and solid management structures who fit this bill.  As our balance sheet and cash position strengthens, we will seek to close some of these deals to fast track our growth plans.  

To implement these plans, the Company recently increased its authorized common stock to 900 million shares. These are not shares that will be issued in the short term. Rather, they are the maximum number of shares that may be issued if and when good financing, acquisitions or debt reduction opportunities arise. Management will seek to use these shares to build long term value for Cyclone. This means getting products to market, generating strong and consistent revenue, acquiring companies that provide a diversified income stream and technology base, and reducing debt on our books. 

As we speak with shareholders, investors and customers, we are confident in our direction.  Regardless of the whims of the public markets, fundamentally Cyclone’s strength is based on the following assets and qualities:

   -    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 engines, which is showing clear results

   -    Experienced technical team, manufacturing experts and management

   -    Current revenue with consistent sales forecasted to start this year

On behalf of the entire Cyclone team, thank you for your support.  Here’s to a successful 2014!


Harry Schoell

Christopher Nelson


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.

Company Contact

Christopher Nelson
Tel: 954-943-8721
[email protected]