Cyclone plans to improve balance sheet and cash position with funds raised in transactions, continuing equity interest in WHE GEN, and on-going licensing royalty payments
POMPANO BEACH, FL / July 17, 2014 / Cyclone Power Technologies Inc. (OTCQB: CYPW), developer of the all-fuel clean-tech Cyclone Engine, announced that its Board of Directors has approved and the Company has signed the first agreements in a series of transactions to secure strategic capital funding for its subsidiary, WHE Generation Corp. ("WHE GEN"), while materially reducing Cyclone’s liabilities and building long-term value for its shareholders.
These transactions are formalized in a Separation Agreement and Amended License Agreement between Cyclone and its subsidiary. They will form the foundation by which WHE GEN plans to raise funding and structure its business moving forward. Upon the successful closing of WHE GEN’s contemplated financings, Cyclone is expected to receive $175,000 in license and consulting fees, retire all of its senior secured debt, reduce other payables by approximately $200,000, and remove another $300,000 in contract liabilities from its balance sheet.
Cyclone may raise additional capital from the sale of a portion of its WHE GEN equity holdings to further reduce existing debt and provide operating capital. It will retain a minority equity interest in WHE GEN, estimated between 12% and 23% depending on the size of the several capital raises. Should WHE GEN be successful in its future business pursuits, Cyclone will also benefit from on-going licensing revenue in the form of royalties from WHE GEN.
In connection with the Separation Agreement, Christopher Nelson is moving to the position of Chief Executive Officer of WHE GEN and has resigned as President of Cyclone. The Board appointed Frankie Fruge, whom has been with the Company since inception, as his replacement. Douglas Hutchinson has assumed the position of Chief Operating Officer of WHE GEN, and resigned as Vice President of Cyclone. Joel Mayersohn has also resigned as a Director of the Company to become a Director of WHE GEN.
Cyclone’s Board has received a Fairness Opinion and Valuation Report from a certified valuation expert in connection with the Separation Agreement and funding structures. In the opinion of the expert, the transactions are fair to Cyclone’s shareholders from a financial perspective.
Such securities which may ultimately be offered will not be or have not been registered under the Securities Act of 1933, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
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 CTO Harry Schoell, the patented Cyclone Engine is an 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, and was presented with two Society of Automotive Engineers’ AEI Tech Awards. 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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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.
Frankie Fruge, President
Tel: 954-943-8721 [email protected]
SOURCE: Cyclone Power Technologies Inc.