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Tom Kjos and The Spyders of Al

We at SCP don’t often run stories that are featured on other sites. However, in this case we feel that it necessary due to the increased  attention given to the ALMS, particularly since Porsche has been involved in the prototype LMP2 class. The RS Spyder has established itself as a fan favorite, and for months now fans have been waiting for a long promised fifth Porsche to take the grid. That may not happen. Tom Kjos has been looking in to the background of the proposed new team that was to campaign two RS Spyders as well as a 997 RSR. If anything, Kjo’s research shows the volatility of what it takes to start up a front line team in motorsports. Tom Kjos original text appears at where he is a contributor. Check the site out.

This is one discrepancy and should be noted. Solaroli has taken delivery and paid for one RS Spyder and one 997 RSR. The second RS Spyder ( chassis 9R6 707 ) is not in his possession at present and remains at Porsche in Weissach Flacht.

                                                                                    Kerry Morse

Smoke, Smokey, and Infinite Networks - Part 1

After Sebring, Al Solaroli, President of CET Technologies, gave an interview to Kye Wankum, or Provinz, newsletter of Porsche Club of America, Upper Canada Region. Some of Mr. Solaroli’s comments caused us to raise our eyebrows – just a bit.

Mr. Solaroli told Wankum that he left Canada because “fierce resistance from the so-called 'good ole boys' society we have in Canada” made him unable to successfully promote his adiabatic engine technology. We know he closed his Porsche tuning shop some time in 2005 and landed in Jacksonville, Florida.

He gave us the timeline. Contact with Porsche in July 2006, Petit Le Mans meeting with Porsche executives. Okay to purchase the Spyders, October in Monterey. Then, mid-April 2007, about the time of this interview, two Spyders arrived at the Atlanta airport.

Al is confident, if nothing else. He’s “moving straight to the top level.” No worry about Roger Penske here. He’s sure he “has things that will benefit Porsche substantially.” Perhaps it’s an adiabatic engine?

CET Racing is grandiose, to say the least – twenty full time staff to start, huge facility, plans to hire 550 people. He assured us that he’d announce his drivers, “Formula One a press conference in Weissach mid-April.”
Solaroli ended that interview with, “Money? I am not looking for any sponsors. I have 50 million budgeted for this endeavor and more if required! Keep an eye on us!”

We have. At one time, Solaroli had said that a Utah launch was possible. In Houston, a team source said about the launch, “it was always Lime Rock.”

Now we’re hearing perhaps not until Mid-Ohio, three months since the Spyders reached Atlanta. We had not heard a word about any testing until today, June 21. One of the Spyders is reported to be at Road Atlanta. (edit: We're told the team on track at Road Atlanta is Autocon, not CET Racing. That's after sources in Braselton said they expected CET Racing to be at the track this date. Another "miss?")

At Houston, that same team source told us, “the driver announcement will be in two days.”
“Monday, then?” we asked.
“Yes,” he replied.
“Or Tuesday?” we inquired.
“Yes,” he replied.

“Mid-April,” Al said. Again, two and a half months have passed.

It all had started to seem a bit odd to us, so we dug a little deeper and found some dates – and events – of our own.

February 1, 2006. Infinite Networks Corporation (Pink Sheets: INNX) announced that Infinite Networks Corporation has signed agreements to acquire CET LLC, a Florida Limited Liability Company that holds the worldwide license rights to the patented technology developed by Mr. Alberto Solaroli of CET LLC.

Mr. Solaroli was named the President of CET Technologies, a wholly-owned subsidiary of Infinite Networks Corporation.

Infinite Networks was incorporated in Nevada, March 15, 2000, ostensibly to exploit emerging communications technology. It was a successor to Corporations of other names, shells acquired, created, abandoned – RITE, Inc., Global Petroleum Investment, Infinite Coffee, Inc. Principals of Infinite Networks were – and are – Donald Miller, John W. Bush, and Denton Guthrie among others. Infinite Networks Corporation is traded under SEC Rule 15c2-11, which was designed to allow a non-reporting public company's securities to be quoted on the National Association of Securities Dealers' ("NASD") Over-the-Counter Bulletin Board ("OTCBB") by filing some simple disclosures. The company appends the so- called “safe harbor” statement to its website under the U.S. Private Securities Litigation Reform Act of 1995. Infinite Networks’ web site is here.

Later, in April: Infinite Networks Corporation (Pink Sheets: INNX) announced today that the Board of Directors approved the activation of their previously negotiated Patent Option with CET International. Infinite Networks Corporation exercised its Patent Option to own 40% of CET International, Inc., which includes all patents, rights and title to CET's Combustible Engine Technology. This is part of the exclusive worldwide license agreement Infinite acquired with the acquisition of CET, LLC in January 2006. INNX activated the option for the initial consideration payment of $450,000.00.

So, let’s see. In addition to CET Technologies, there’s CET International, Inc. Does $450,000 sound like enough for rights about which Mr. Solaroli said in April 2004, "If I don't generate $300 million within the first 18 months, I'll quit.”? It was, however, probably about the amount required for a down-payment on three Porsches.

Whatever the value, it was Smokey Yunick, not Al Solaroli, who built the first adiabatic gasoline engine, and there’s doubt whether that adventure delivered any improvement on the technology of 1984. Smokey, whose idea was heating the charge - Al wants to cool it -  in the end quietly buried the whole idea. Different strokes, as they say. Anyway, back to our story.

Infinite Networks trades OTC as INNX. It closed at fourteen cents yesterday, June 20, 2007. That’s $13,350,000 for the whole shebang, based on reported outstanding shares, we figure. Actually it was worth more, when it acquired CET, about a buck-fifty, but it was fourteen cents in December, 2005, and it’s fourteen cents now. The whole company is worth less than its $50 million racing budget. The stock's recent price chart is here.

In July of last year, Infinite acquired Eller Industries, “a public vehicle to divest itself in the communications industry and focus primarily on the engine technology acquired from CET.” In other words, a corporate “shell.” Eller Industries was spun off, and a cash dividend paid to shareholders of record earlier this year. In the fall, focus on the engine technology apparently meant the installation of one of CET’s engines in a boat from Fountain Powerboats and participation in a race that both “proved the technology,” and repealed the laws of thermodynamics in one fell swoop, according to an Infinite press release. With that triumph in hand, Infinite announced, then quickly cancelled, a world power boat speed record attempt in February of this year. The torque of the engine was too great for the gears, Solaroli said. Fountain’s web site makes no mention of any of that.

A reported link between officers of Infinite Networks and the United Kingdom of Atlantis could not be verified by Last Turn Clubhouse.

We’ve tried to find any indication that CET, its parent corporation Infinite Networks, or any other Infinite Networks subsidiary has sold anything, or in fact has anything to sell. Putting aside adiabatic engines, the definition of which is a perpetual- motion-like “thermodynamic process that happens without loss or gain of heat,” and reminds us of the announcement of new chassis technology at Petit Le Mans in 2004, it’s not clear where that fifty million dollar budget is going to come from. Although communications from any of these companies have been few and far between, they’ve been out there announcing power boat races.

If there had been any contract or agreement in regard to CET’s engine “technology,” we’d have heard about it, wouldn’t we? Perhaps that $300 million of which Mr. Solaroli was so certain in 2004 has materialized. From where, we can’t determine. We’ll be pleasantly surprised to see CET Racing on a grid anywhere, anytime.

Smoke and (Infinite) Mirrors - Part 2

We published Part I of our investigation into the financial underpinnings of CET LLC, CET International, and CET Technologies last week. In that research we found reams of data on Infinite Networks Corporation, which became the parent company of the CET companies in 2006. Though Infinite’s history is quite interesting, rather than pursue that further, here in Part 2 we focus specifically on the 2006 and 2007 transactions involving CET and Alberto Solaroli, who has been reported to be close to fielding a two car Porsche prototype (RS Spyders) team in the American Le Mans Series. This report does not make reference directly to the financial structure of CET Racing/Solaroli Motorsports, and though some will perhaps wonder at that, to us it is just the point. Other than that which could be provided by Solaroli’s businesses, we have been unable to turn up any race team financial data at all, particularly interesting in the light of Mr. Solaroli’s public statement that he has not sought any outside sponsorship. We cannot say for sure whether this racing venture will prove successful or not. We can only present what we have discovered.-Editor-

Communications to Coffee

Having gone from communications to coffee, then back to communications, Infinite Networks Corporation decided to make another of its frequent and radical strategic moves in 2006 by dumping its communication-focused holdings. Eller Industries was acquired, then its shares distributed to Infinite’s own registered shareholders to accomplish the divestiture. The new strategy (or, as the company termed it, focus) was in energy. There, it created a new subsidiary, Cosmic Energy Corporation with Donald Miller (former Infinite CEO) at the helm. Its big move, however, was to be the acquisition of CET, LLC, a Florida corporation that (in the words of a recent Infinite document)(1) “represented it had a worldwide license for the Solaroli patented technology," (U.S. Patent 6,282,898). Infinite and Alberto Solaroli signed the agreement on January 25, 2006. The acquisition was completed in October 2006.

ffffA little cash, a bit of stock and a big note
Infinite acquired from CET International and CET, LLC an exclusive worldwide license for the Solaroli technology, excluding the racing industry, for royalty payments of 5% of gross annual sales and 10,000,000 restricted (2) shares of Infinite Networks common stock. The acquisition was a triangle merger in which Infinite Networks Corporation acquired 100% ownership of CET, LLC, in turn the holder of an irrevocable license agreement with CET International, the owner of the patents. In March 2006, Infinite further activated an option agreement to purchase up to 40% of CET International with a down payment of $450,000 and an unsecured promissory note for $71,217,000 payable in 59 equal installments to begin in April 2007.

Following the merger/acquisition agreement in January, Mr. Solaroli became a member of the Infinite board of directors, but resigned in May, 2006 while remaining CEO and President of CET Technologies, the newly-created Infinite Networks Corporation subsidiary that held the assets of the former Solaroli companies.

Boat Deal

After the agreement, Infinite raised a bit more than $3 million by selling nearly seven million shares of its common stock in a private placement to accredited investors at an average price of about $.50 per share. The company said that $2.6 million was working capital to support the development of the new engine technology. That development included performance on a 2005 agreement with Fountain Boats, an opportunity it was believed would provide worldwide recognition and a platform for testing and proving this new technology in a racing environment. CET Technologies built six marine engines for Fountain. According to Infinite documents and a contemporary press release, dynamometer tests in June 2006 further proved the torque and horsepower potential of the engines. The CET engines raced in August and September but fell prey to mechanical failures. According to Mr. Solaroli, the August failure was caused by a loose oil canister, and in the September incident, the wrong pistons had been supplied by the manufacturer.

A Porsche was showcased by Mr. Solaroli to show that the technology was viable. Infinite’s goal was to develop the retrofit market as soon as possible. Mr. Solaroli wanted to focus on the racing industry and build new engines using this technology that would further provide technical data for commercialization and gain worldwide recognition. There was nothing remarkable in the progress made other than its slow pace relative to Mr. Solaroli’s statements elsewhere, and perhaps also relative to the expectations of Infinite. In any case, trouble between the parties was brewing. In its March filing, Infinite said,

“Subsequent to the signing of the original acquisition agreement, Infinite discovered, among other matters, that no patent assignment to CET International had been recorded at the U.S. Patent Office. As part of the completion of the acquisition, a closing agreement was entered into with the reorganization parties and Al Solaroli individually in which Mr. Solaroli again represented that he had assigned the patent rights to CET International and that he would cause the assignment to be recorded in the U.S. Patent Office. Mr. Solaroli has been repeatedly asked to record the patent assignment, but has (according to a March, 2007 company document) failed to do so.

As a result of the failure of Al Solaroli to record the patent assignment, and the resultant inability of Infinite to show that it has a license agreement backed by the recorded ownership of the patent in CET International, Infinite has not been able to move forward with the exploitation of its license rights or to seek additional capital based on having the license rights.”(

For whatever reasons, it seems that by the end of 2006, Infinite had enough of Mr. Solaroli, and Mr. Solaroli had enough of Infinite. They agreed he could buy back CET, LLC. In November they signed a letter of understanding that Solaroli would re-acquire CET LLC plus 28,000,000 shares of Infinite stock for a total purchase price of $105,461,000.(4)

Banking on Cameroon

The source of those 28 million shares was Karamouzi Bank & Trust Ltd., Republic of Cameroon, which had acquired shares in 2004 in exchange for a little cash and a $25 million letter of credit, after some glitches in that agreement, those shares reverting to Infinite in a 2006 settlement. In May 2006 the 28,000,000 shares were conveyed to Mr. Solaroli in trust, then transferred by him to a series of foreign entities as part of a capital formation program. In this new agreement Solaroli would take back CET and retain the Infinite shares. The re-purchase transaction was to be paid in 12 equal installments beginning at the end of 2006. Mr. Solaroli, however, did not ratify this agreement, but rather proposed a new one (which terms we do not know) in 2007 that was not acceptable to Infinite.

Mr. Solaroli may have hoped to use the Cameroon bank’s shares to raise capital to complete his repurchase, but there have been no transactions that we know of involving those equities. Infinite believes they are still held by Solaroli’s foreign entities, has demanded their return, and placed an administrative hold on them.


Absent a satisfactory agreement and without the effective control of the Solaroli patent that it thought it had acquired, in February of this year Infinite rescinded the option agreement of March 2006, voiding its promissory note and asking for the repayment of its $450,000 down payment. This unilateral rescission of the option exercise has been questioned by Mr. Solaroli, and the funds have not been repaid.

Stocks, No Cash

It seems neither Infinite’s original purchase of CET, nor Mr. Solaroli’s repurchase has been executed. Solaroli is reported to have received $450,000 cash in the original agreements, plus 10,000,000 shares of stock that he could not sell under even the most liberal definition of SEC Rule 144 until February of this year. In the 100 or so trading days since then, Infinite trading volumes do not seem to have been adequate to have accommodated such a block, and even if they were sold over time, there has been but one intra-day spike to $1 a share and no daily volumes greater than 225,000 shares; most trade share prices have fallen below twenty-five cents in the period. The stock actually closed on 21 May at 1 cent per share. Thus it’s our conclusion that the 10,000,000 shares reported to be involved in the original transaction have not likely yielded more than $3 million, if anything at all. The profile of this transaction is similar to that used by Infinite and related companies through the years - lots of shares, little cash.

The other elements of the sale that might yield revenue are first, the 5% royalty to be paid on sales, and second, any revenues that Mr. Solaroli might have made in the excluded “racing industry.”

In regard to the first of these, there is no indication that Infinite has any sales, or any revenue from any sales – of any kind. The company’s Disclosure Statement, which includes results from inception (March 27, 1996) through 2005, documents cumulative net losses from operations is over $14 million and no year in which Infinity in any of its forms or any of its subsidiaries has recorded net positive income. Nor is there anything in the description of 2006 operations that would cause one to conclude that there is any production, services, sales, or revenue in prospect. In fact, Infinite has its own reservations about its prospects as a “going concern.”(6)

Since there is no record of sales of any kind from any of these companies, we have to conclude that the funding of this team comes from investor’s money – something the principals may find the Securities Exchange Commission frowns on.

Alberto’s Been Racing?

As to the second potential for income, we found this statement in Infinite’s director’s biography for Mr. Solaroli: “…he holds an FIA professional automobile racing license and competes on various circuits throughout North America and Europe. He has implemented the CET technology in various cars used in these events and the positive results can be described to potential investors should they be interested in meeting Mr. Solaroli.”(5)

Though we think that various sanctioning bodies might wonder when an adiabatic engine might have graced their grids, we have no problem concluding from our own observations that Mr. Solaroli has not derived any significant revenues from racing applications of his patented technology.

CET Racing/Solaroli Secret Funding?

In our view, there is simply nothing on the record to indicate that CET Racing/Solaroli Motorsports has or can obtain the funding required for its American Le Mans Series racing program, and a great deal that indicates that is has not and will not. We know that the Spyders were delivered, but contrary to assertions we have seen, it’s not likely that Porsche invoices were paid in full at the time of delivery. Payments to Porsche may actually be substantially in arrears. If that is the case, we don’t expect the long-awaited driver announcements (driver’s due diligence being among the best in our business), and we don’t expect to see Spyders 706 and 707 at Lime Rock Park or at Mid-Ohio Sports Car Course. The wheels are about to come off these Spyders.

We’ll hope for the best, of course. We certainly want to see more cars, particularly of the quality of the Porsches, on the series’ grids, and trust we will – sometime in the future, and in other hands.

(1) Disclosure Statement Pursuant to Rule 15C2-11 Securities Exchange Act of 1934, dated March 19, 2007, page 3.
(2) Restricted stockowners need permission of the SEC to sell, and there is a statutory waiting period of one or two years, the latter applying to individuals in high management positions. (Which would include Mr. Solaroli, according to the opinion of security industry experts.) See SEC Rule 144.
(3) op. cit., Disclosure Statement, March 19, 2007, page 5.
(4) This price was based on an independent appraised value of $73,130,000 for the license, plus an additional purchase of 28,000,000 Infinite shares currently held in the name of foreign entities by Mr. Solaroli for $32,331,000.
(5) op. cit., Disclosure Statement, March 19, 2007, page 9.
(6) ibid., page 29, Note 9. “As shown in the accompanying consolidated financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit of $11,918,655 as of December 31, 2005 and $10,455,631 as of December 31, 2004. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.”

Copyright Tom Kjos and Last Turn Clubhouse

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