Cyclone Power Technologies (OTCQB: CYPW), developer of the all-fuel, clean-tech Cyclone Engine, announced today that it has closed the first round of funding of its Secured Promissory Notes since its acquisition of Advent Power Systems.
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This funding by Cyclone Power Technologies (OTCQB: CYPW) is part of a $350,000 financing to capitalize the Company's recent acquisition of Advent Power Systems and its $1.4 million contract with the U.S. Army / TACOM. Funds will be used for technology development and general working purposes.
To read the initial TN report on this acquisition, please refer to Cyclone Power Technologies to assume prime contractor position with TACOM.
According to the latest news release, the 12-month Notes bear interest at the rate of 18% per annum, of which 6% is payable in cash at maturity and 12% in shares of Cyclone's common stock, subject to Rule 144 restrictions. The principal of the Notes is not convertible into common stock.
The Note holders, however, have a security interest in certain accounts receivable under the Company's contract with the U.S. Army / TACOM. This originated through Advent Power Systems, but is now assumed by Cyclone in its recent acquisition of that company's assets.
For the record, the U.S. Army contract is currently in the novation process with the Defense contracting management office. A word seldom used in automotive technical circles, novation 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 press release was very clear in that it did not constitute an offer to sell or the solicitation of an offer to buy securities, and would not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction. The offering is being sold to accredited investors under an exemption from registration requirements, and as such, no registration statement is being filed with the Securities Exchange Commission.
This is not the first writ by TN about this company's relation to the military either. Read: Rep. Allen West visits Cyclone Power Technologies as well as, 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]
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