The license provides Phoenix Power with exclusive North American and Australian rights to develop and sell power generator systems utilizing Cyclone’s external combustion engines, which will run on waste oil fuels such as used motor oil from cars, trucks and busses. Phoenix Power is an affiliate of Atlantic Systems Group of Harrisonburg, VA, which is in the business of designing and building automotive oil change and service facilities throughout the United States, along with the manufacturing of steel tanks for the lube industry.

Phoenix Power will pay Cyclone $400,000 in license and development fees over the following nine to 12 months—$150,000 of which was paid on license execution—and then pay on-going royalties on each Cyclone Engine produced. Phoenix Power has also agreed to pay minimum royalties over the life of the agreement in an amount exceeding $4 million in order to maintain its exclusive rights, and have received common stock purchase warrants which vest on completion of the initial engine prototypes.

Phoenix Power has also brought to this deal an exclusive license with Mr. Terry Bassett, who holds two US patents, with international patents pending, for the total system package of generating electric power from waste oil using an external combustion engine.