Cyclone Power Technologies to acquire military licensee, Advent Power Systems
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What might this have to do with autos? Plenty. 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 CEO 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.
Yet, every new company with a new technology needs venture capital. Then it needs to eventually generate income on its own to sustain growth and development. Such seems to be the case with Cyclone Power Technologies, as it is using its military applications to grow its business before it ventures further into the commercial market for cars and trucks.
For the record, Advent Power Systems, Inc., has been Cyclone's exclusive military licensee since 2006. Advent is currently a prime contractor with the U.S. Army / Tank Command (TACOM) in a Phase I project utilizing Cyclone's engine technology to build a prototype 10kW auxiliary power unit for use in U.S. combat vehicles. So, this acquisition seems a natural progression.
According to the Cyclone news release, the purchase price for the acquisition is 1.5 million shares of Cyclone common stock. Under the agreement, Cyclone will fully assume the $1.4 million Army contract, key agreements with several of the project's sub-contractors, and all opportunities in the Advent pipeline, among other valuable assets. As a result of efficiencies in contract administration and management, Cyclone expects to enhance profitability and pick-up approximately $450,000 in additional revenue from this contract over the next six to nine months. Cyclone will also become the prime contractor of record eligible for Phase II awards through the Department of Defense.
With over 40 years of extensive industry experience and contacts, Dr. Phil Myers, CEO of Advent, will be engaged as a consultant to Cyclone over the next twelve months, assisting in the contract transition process and procurement of other defense awards internationally. Dr. Myers is a former U.S. Air Force Engineering officer, and holds an Industrial and Systems Engineering Degree and M.B.A. from Ohio State, as well as a doctorate from the Harvard Business School, specializing in the management of advanced technology companies.
Dr. Myers commented, "I'm very pleased to be joining forces more closely with Cyclone, a company that I've worked with and respected immensely over the last five years. I believe that this transaction will be highly beneficial to the successful completion of our U.S. Army contract, and will help attract new customers and strategic partners to Cyclone's revolutionary engine technology."
Christopher Nelson, President of Cyclone, commented, "The acquisition of Advent is an important financial and strategic development for Cyclone. With this purchase we will generate increased revenue from our current contract, and going forward, we will be able to pursue direct contracts with the military. Moreover, bringing on Dr. Myers and his talented team of advisors to help secure additional awards is a big plus. We look forward to working side-by-side with them in the year ahead."
Full Disclosure: At time of publication, Sherosky, creator of the auto sector charts for TN, holds a small position of CYPW stock in his long term IRA. None of the information in this article constitutes a recommendation, but an assessment or opinion.
About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected] and followed in Twitter under @Authorfranks
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The Advent acquisition is subject to standard closing conditions, and is expected to close in the first quarter of 2012.