Cyclone Power Technologies to assume prime contractor position with TACOM
According to the media release, Cyclone will assume Advent Power Systems position as prime contractor with the U.S. Army / Tank Command (TACOM), subject to formal novation. In a project utilizing Cyclone's engine technology to develop an auxiliary power unit for multiple lines of combat vehicles, affected military vehicles will be the M1 Abrams tank, the IAV Stryker and the Bradley Fighting Vehicle.
For the record and auxiliary power unit is also known as an APU. And while this technology has found acceptance into the military, be apprised the future commercial application for homes and automotive has a strong basis as well. Because of the All-Fuel, Earth-Friendly nature of their engine, in addition to its cost benefits and scalability, the Cyclone Engine is perfectly suited to replace internal combustion engines in virtually all transportation, power generation, equipment and other important applications.
With regard to the company stock, Cyclone Power Technologies Inc. (OTCQB: CYPW), the value of the Army contract being transferred to Cyclone is $1.4 million. However, should this Phase I project advance to Phase II next year, it could be worth several million dollars in additional revenue to Cyclone. That would provide further development support towards the ultimate commercialization of these compact, efficient and multi-fuel power generators.
Christopher Nelson, President of Cyclone, commented, "The closing of the Advent acquisition marks an important milestone for our company and shareholders. With the TACOM contract, we expect to achieve solid revenue over the next year and, hopefully, gain a long term customer. We believe that while military budgets are being trimmed, eco-friendly technologies that make our military forces more efficient and save the government money -- like the Cyclone engine -- will continue to receive funding and support. Cyclone will aggressively pursue these rewarding opportunities."
Dr. Myers commented, "We are pleased to have this acquisition closed. Advent's existing government relationships coupled with Cyclone's engine technology provides us many advantages now and going forward. This is an exciting time for both companies. I have great faith in Cyclone's ability to complete the U.S. Army contract, and ultimately, to commercialize its engine technology for both military and civilian customers."
The purchase price for the acquisition was 1.5 million shares of Cyclone common stock. This consideration is being held in escrow pending the official novation of the Army contract, and is further restricted for resale by a contractual two-year leak-out provision.
In case you missed the meaning, though, novation is a word seldom used in automotive technical circles. It is a term used in contract law and business law. In this case, novation means the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party.
This is not the first writ by TN about this company's relation to the military. Read: Rep. Allen West visits Cyclone Power Technologies and Raytheon: Cyclone Power's combustion engine game changer
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 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.
The Cyclone Engine was recognized by Popular Science Magazine as the Invention of the Year for 2008, and was presented with the Society of Automotive Engineers' AEI Tech Award in 2006 and 2008. Additionally, Cyclone was named Environmental Business of the Year by the Broward County Environmental Protection Department. For more information, visit www.cyclonepower.com.
[Full Disclosure: The author has owned shares of CYPW as part of his long-term IRA holdings]