UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2007

OR

[  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to ______________

Commission File Number 000-51716

CLEAN POWER TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

|Nevada                                                       |  | 98-0413062                          
|------------------------------------------------------------ |  | ------------------------------------
|State or other jurisdiction of incorporation or organization |  | (I.R.S. Employer Identification No.)

436-35th Avenue N.W., Calgary, Alberta Canada T2K 0C1

(Address of principal executive offices)

(403) 277-2944

(Issuers telephone number)





(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and 2) has been subject to such filing requirements for the past 90 days.

Yes R         No £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes R         No £

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.



Yes £       No £



APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers classes of commong equity, as of the latest practicable date:

59,845,748 common shares outstanding as of January 9, 2008



Transitional Small Business Disclosure Format:

Yes £          No R









TABLE OF CONTENTS





|                                                                                                                                                                                     | Page       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------
|PART I  FINANCIAL INFORMATION                                                                                                                                                       |            
|                                                                                                                                                                                     |            
|Item 1.  Financial Statements:                                                                                                                                                       |            
|                                                                                                                                                                                     |            
|Interim Consolidated Balance Sheets as of November 30, 2007 (unaudited)                                                                                                              | F-2        
|                                                                                                                                                                                     |            
|Interim Consolidated Statements of Operations for the months ended November 30, 2007, and 2006 and for the period May 12, 2006, (Date of Inception) to November 30, 2007 (unaudited) | F-3        
|                                                                                                                                                                                     |            
|Consolidated Statements of Cash Flows for the months ended November 30, 2007, and 2006 and for the period May 12, 2006, (Date of Inception) to November 30, 2007 (unaudited)         | F-4        
|                                                                                                                                                                                     |            
|Notes to the Interim Consolidated Financial Statements for the months ended November 30, 2007                                                                                        | F-5 to F-10
|                                                                                                                                                                                     |            
|Item 2.  Managements Discussion and Analysis or Plan of Operation                                                                                                                   | 1          
|                                                                                                                                                                                     |            
|Item 3.  Controls and Procedures                                                                                                                                                     | 4          
|                                                                                                                                                                                     |            
|PART II  OTHER INFORMATION                                                                                                                                                          |            
|                                                                                                                                                                                     |            
|Item 1.  Legal Proceedings                                                                                                                                                           | 4          
|                                                                                                                                                                                     |            
|Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds                                                                                                                  | 4          
|                                                                                                                                                                                     |            
|Item 3.  Defaults Upon Senior Securities                                                                                                                                             | 6          
|                                                                                                                                                                                     |            
|Item 4.  Submission of Matters to a Vote of Security Holders                                                                                                                         | 6          
|                                                                                                                                                                                     |            
|Item 5.  Other Information                                                                                                                                                           | 6          
|                                                                                                                                                                                     |            
|Item 6.  Exhibits                                                                                                                                                                    | 6          
|                                                                                                                                                                                     |            
|Signatures                                                                                                                                                                           | 7          























i











PART I - FINANCIAL INFORMATION



ITEM 1.

FINANCIAL STATEMENTS



F-1







CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



|ASSETS                                               | (unaudited)
November 30, | (audited)
August 31,
|---------------------------------------------------- | ------------------------ | --------------------
|                                                     | 2007                     | 2007                
|Current                                              |                          |                     
|Cash                                                 | $
100,306                | $
331,279           
|Accounts receivable                                  | 30,786                   | 32,360              
|Prepaid expenses  Note 3                            | 61,328                   | 111,800             
|                                                     |                          |                     
|                                                     | 192,420                  | 475,439             
|                                                     |                          |                     
|Plant and equipment                                  | 444,021                  | 382,928             
|                                                     |                          |                     
|TOTAL ASSETS                                         | $
636,441                | $
858,367           
|                                                     |                          |                     
|LIABILITIES                                         
|                                                     |                          |                     
|Current                                              |                          |                     
|Accounts payable and accrued liabilities             | $
102,330                | $
54,809            
|                                                     |                          |                     
|Long Term Debt - Note 3                              | 65,971                   | 1,269,723           
|                                                     |                          |                     
|Total Liabilities                                    | 168,301                  | 1,324,532           
|                                                     |                          |                     
|STOCKHOLDERS EQUITY (DEFICIENCY)                   
|                                                     |                          |                     
|Capital Stock                                        |                          |                     
|Authorized:                                          |                          |                     
|75,000,000 common shares, par value $0.001 per share
|Issued and outstanding:                              |                          |                     
|57,675,748 common shares as at Nov. 30, 2007        
|and 53,954,162 as at Aug. 31, 2007                   | 57,676                   | 53,954              
|Additional paid-in capital                           | 5,076,230                | 3,088,081           
|Accumulated other comprehensive loss                 | (32,840)                 | (45,198)            
|Deficit accumulated during the development stage     | (4,632,926)              | (3,563,002)         
|                                                     |                          |                     
|Total Stockholders Equity (Deficiency)              | 468,140                  | (466,165)           
|                                                     |                          |                     
|Total Liabilities and Stockholders Equity           | $
636,441                | $
858,367           



SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS



F-2







CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended November 30, 2007 and 2006 and

for the period May 12, 2006 (Date of Inception) to November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)





|                                              |                   |                  | May 12, 2006 
|--------------------------------------------- | ----------------- | ---------------- | -------------
|                                              | Three months      | Three months     | (Date of     
|                                              | ended             | Ended            | Inception) to
|                                              | November 30,      | November 30,     | November 30, 
|                                              | 2007              | 2006             | 2007         
|                                              |                   |                  |              
|Expenses                                      |                   |                  |              
|Depreciation                                  | $          36,095 | $         16,589 | $
140,053    
|Interest  Note 3                             | 22,236            | 13,455           | 146,213      
|Office and administration                     | 319,159           | 73,206           | 795,286      
|Organizational costs                          | -                 | -                | 2,500        
|Professional fees                             | 59,758            | 25,097           | 311,423      
|Professional fees settled with shares         | -                 | -                | 633,609      
|Research and development                      | 36,310            | 50,305           | 660,056      
|Directors fees settled with shares            | 250,000           | -                | 430,000      
|Salaries and consulting fees                  | 146,366           | 84,454           | 669,953      
|Consulting fees settled with shares           | 200,000           | -                | 811,500      
|Compensation by stock                         | -                 | -                | 32,333       
|                                              |                   |                  |              
|                                              |                   |                  |              
|Net loss for the period                       | (1,069,924)       | (263,106)        | (4,632,926)  
|                                              |                   |                  |              
|Other comprehensive loss:                     |                   |                  |              
|Foreign currency translation adjustment       | 12,358            | (9,647)          | (32,840)     
|                                              |                   |                  |              
|Comprehensive loss for the period             | $
(1,057,566)     | $
(272,753)      | $
(4,665,766)
|                                              |                   |                  |              
|Basic and diluted loss per share              | $
(0.02)          | $
(0.01)         |              
|                                              |                   |                  |              
|Weighted average number of shares outstanding | 56,585,219        | 45,445,377       |              
|                                              |                   |                  |              







SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS



F-3







CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended November 30, 2007 and 2006 and

for the period May 12, 2006 (Date of Inception) to November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



|                                                                   | November 30, 2007 | November 30, 2006 | May 12, 2006 (Date of Inception) to November 30, 2007
|------------------------------------------------------------------ | ----------------- | ----------------- | -----------------------------------------------------
|Cash Flows From Operating Activities                               |                   |                   |                                                      
|Net loss for the period                                            | $    (1,069,924)  | $
(263,106)       | $    (4,632,926)                                     
|Items not affecting cash:                                          |                   |                   |                                                      
|Depreciation                                                       | 36,095            | 16,589            | 140,053                                              
|Amortization of debt discount                                      | 22,147            | -                 | 46,841                                               
|Imputed  interest                                                  | -                 | 13,455            | 99,408                                               
|Professional fees paid by the issuance of shares                   | -                 | -                 | 633,610                                              
|Director fees paid by the issuance of shares                       | 250,000           | -                 | 430,000                                              
|Consulting fees paid by the issuance of shares                     | 200,000           | -                 | 811,500                                              
|Research and development                                           | -                 | -                 | 402,000                                              
|Stock-based compensation                                           | -                 | -                 | 32,333                                               
|Changes in non-cash working capital balance
related to operations: |                   |                   |                                                      
|Accounts receivable                                                | 2,484             | (31,586)          | (23,057)                                             
|Prepaid expenses                                                   | 45,817            | 10,142            | (57,141)                                             
|Accounts payable and accrued liabilities                           | 46,695            | (15,797)          | 87,723                                               
|                                                                   |                   |                   |                                                      
|Cash flows used in operating activities                            | (466,686)         | (270,303)         | (2,029,656)                                          
|                                                                   |                   |                   |                                                      
|Cash Flows from Investing Activities                               |                   |                   |                                                      
|Acquisition of plant and equipment                                 | (87,009)          | (115,753)         | (558,137)                                            
|Cash acquired from business acquisition                            | -                 | -                 | 62,070                                               
|                                                                   |                   |                   |                                                      
|Cash flows used in investing activities                            | (87,009)          | (115,753)         | (496,067)                                            
|                                                                   |                   |                   |                                                      
|Cash Flows from Financing Activities                               |                   |                   |                                                      
|Issuance of common shares for cash                                 | 250,000           | -                 | 1,178,766                                            
|Due to related party                                               | 65,971            | 353,607           | 1,459,081                                            
|                                                                   |                   |                   |                                                      
|Cash flows provided by financing activities                        | 315,971           | 353,607           | 2,637,847                                            
|                                                                   |                   |                   |                                                      
|Foreign currency translation adjustment                            | 6,751             | 1,119             | (11,818)                                             
|                                                                   |                   |                   |                                                      
|Increase (decrease) in cash during the period                      | (230,973)         | (31,330)          | $       100,306                                      
|                                                                   |                   |                   |                                                      
|Cash at beginning of period                                        | 331,279           | 99,234            |                                                      
|                                                                   |                   |                   |                                                      
|Cash at end of period                                              | $       100,306   | $
67,904          |                                                      

Non-cash Transaction  Note



SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

F-4



CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 1

Nature and Continuance of Operations



(a)

Organization



The Company was incorporated in the State of Nevada, United States of America on October 30, 2003 as Sphere of Language.  On June 13, 2006, the Company changed its name to Clean Power Technologies Inc.



The Company incorporated Clean Energy and Power Solutions Inc. (CEPS) on May 12, 2006 in the State of Nevada as a wholly owned subsidiary.



The Company is developing a project for a gas/steam or diesel/steam hybrid technology, and has incorporated a wholly-owned subsidiary, Clean Power Technologies Limited, (CPTL-UK) a company based in Great Britain and incorporated on May 10, 2006, to carry on all its research and development.



The Companys year-end is August 31.



(b)

Principles of Consolidation



The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries CEPS and CPTL-UK.  All inter-company transactions have been eliminated.



(c)

Development Stage Company



The Company is a development stage company as defined in Statement of Financial Accounting Standards No. 7.  The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced.  All losses accumulated since inception has been considered as part of the Companys development stage activities.



(d)

Continuance of Operations



These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for the next twelve months.  Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At November 30, 2007, the Company had not yet achieved profitable operations, has accumulated losses of $4,632,926 since its inception, has working capital of $90,090 and expects to incur further losses in the

F-5



CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 1

Nature and Continuance of Operations  Contd



(a)

Continuance of Operations  Contd



development of its business, all of which casts substantial doubt about the Companys ability to continue as a going concern.  The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.



Note 2

Interim Financial Statements



While the information presented in the accompanying three months to November 30, 2007 interim consolidated financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with accounting principles generally accepted in the United States of America. It is suggested that these financial statements be read in conjunction with Clean Power Technologies Inc.s (the Company) audited consolidated financial statements for the fiscal year ended August 31, 2007.



Operating results for the three months ended November 30, 2007 are not necessarily indicative of the results that can be expected for the fiscal year ending August 31, 2008.



Note 3

Related Party Transactions



Included in prepaid expenses is $25,228 of prepaid rent paid to a director of Clean Power Technologies Ltd. (CPTL).  Rent expense of $9,167 was charged by the director for the period ended November 30, 2007.



During the quarter ended November 30, 2007, the Company issued 3,021,586 shares of common stock to retire debt, including all accrued interest as at the date of settlement, at $0.50 per share.  The debt was due to Abdul Mitha, the Companys President.  During the quarter ended November 30, 2007, the Company received additional cash proceeds totalling $65,971 which amount has been recorded as long-term debt on the Companys balance sheet.



During the quarter ended November 30, 2007, a company with a director in common advanced $250,000 for operations and this amount was converted to common shares under the terms of a pre-existing agreement at $0.25 per share for a total of 1,000,000 shares.

F-6





CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 3

Related Party Transactions  Contd



During the quarter the Company issued a total of 250,000 common shares to David William Thursfield, a director of the Company, as directors fees.



Note 4

Commitments



i)

On July 26, 2006, CPTL entered into a three year lease agreement for an office and research facility located in Newhaven, United Kingdom.  The lease expires on July 25, 2009.  The CPTL lease calls for annual rent in the amount of $36,666 (£18,000) plus applicable taxes, and is payable quarterly.



CPTL is required to make minimum lease payments over the remaining term of the lease as follows:



|Lease Period                | Payment 
|--------------------------- | --------
|                            |         
|Year ending August 31, 2008 | $
27,500
|Year ending August 31, 2009 | $
33,611
|                            |         
|Total                       | $
61,111



ii)

On June 21, 2006, the Company entered into an investor relations agreement for a period of one year for consideration of $2,500 per month and granted 200,000 share purchase options exercisable at $1.30 per share until July 1, 2008.  The options vested over the fiscal year ended August 31, 2007.



iii)

The Company entered into a collaboration agreement with Doosan Babcock Energy Ltd. (Doosan or the Partner) dated October 11, 2006 for the development of a steam accumulator and other related technologies in partnership for use with the Companys petrol (gas)/steam and diesel/steam hybrid technologies project.  The agreement called for funding of approximately US$400,000 by Doosan.  As consideration, the Company was required to issue 4,000,000 common shares of the Company.  The term of the agreement is three years.



The agreement further provides that within 18 months from the first vehicle being publicly unveiled, the partner will have the option of either seeking cash reimbursement of its development costs from the Company or retaining the previously issued shares of common shares of the Company.  Should the Partner seek cash reimbursement then the partner shall return a total of 3,000,000 shares of common shares to

the Company.





F-7





CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 4

Commitments  Contd



Should development costs exceed US$400,000, then the Partner has the option to either receive cash reimbursement of the amount in excess of US$400,000 or to receive additional shares of the Company at a price to be negotiated.  Should the Company be unable to reimburse the partner on any call for reimbursement as allowed under the collaboration agreement, the Company will transfer an equal share of the intellectual property to the Partner so that the Partner and the Company will own the intellectual property equally.





On June 13, 2007, the Company issued a total of 4,000,000 shares of restricted common shares to Doosan pursuant to the terms and conditions of a subscription agreement, dated May 21, 2007 (the Subscription Agreement). The Subscription Agreement was executed pursuant to the terms and conditions of that Collaboration Agreement entered into between the parties on October 11, 2006.



The Company will provide an additional 100,000 common shares to Doosan, which shall be used at their discretion to reward any of their employees who have helped in the development of the technologies project.



iv)

On January 4, 2007, the Company executed an Investment Agreement and a Registration Rights Agreement with the Dutchess Private Equities Fund Ltd. (Dutchess).  Under the terms of these agreements, Dutchess has extended an equity line of credit of up to $10,000,000 to be taken down at the Companys election, either a) 200% of the average US daily volume of the common shares for the 10 trading days prior to the put notice date multiplied by the average of the three daily closing bid prices immediately preceding the put date or b) $250,000 upon the registration of the initial amount of 10,000,000 common shares by the Company which will be used for the draw down of funds.  The registration statement, which was declared effective by the U.S. Securities and Exchange Commission (SEC), provides for the offering of securities on a continuing basis.  The agreement further calls for the Company to pay a 1% fee to a registered broker dealer to a maximum of $10,000 on each draw down of funds under the Investment Agreement.  The Company retained legal counsel to prepare the registration statement on Form SB-2 which was filed during the quarter ending May 31, 2007.  The registration statement was declared effective by the U.S. Securities and Exchange Commission on April 11, 2007.  As at the date of this quarterly report, the Company has not drawn down any funds under the equity line.



v)

During the year ended August 31, 2007, the Company entered into an agreement with Gersten Savage LLP in connection with the filing and prosecution of certain patent applications with respect to the Unitary Engine and Reservoir Engine Inventions.  Under the terms of the agreement, the Company has agreed to pay fixed fees as follows:

F-8







CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 4

Commitments  Contd



1.

$333,333 worth of the Companys restricted common shares with a deemed value of $1.16 per share.  The Company issued a total of 287,357 common shares in respect to this provision during the fiscal year ended August 31, 2007, and;



2.

$166,666 in cash upon the effectiveness of the Registration Statement to be paid as follows:  $15,000 upon signing of the agreement and $10,000 per month commencing 120 days from the date of effectiveness until such time as the cash amounts are settled in full.  Gersten Savage will invoice the Company monthly for the cash portion of the agreement.



vi)

During the year ended August 31, 2007, the Company entered into an agreement with Abchurch Communications Limited to provide certain integrated financial and corporate communications services.  Under the terms of the agreement, Abchurch will provide four (4) phases of services to assist the Company in securing a listing on the AIM Exchange in London.  Fees payable under the agreement include a project fee of £40,000 (approximately U.S. $81,000), with £15,000 (U.S. $30,550) due upon signing the agreement.  A further £25,000 (U.S. $50,925) was paid in two payments, July, 2007 and September 2007, respectively.  The agreement also calls for ongoing quarterly payments of £12,000 (U.S. $24,400) for the term of the agreement.  The agreement may be terminated by either party with three (3) months written notice.



Note 5

Non-cash Transactions



Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statement of cash flows.



During the quarter ended November 30, 2007, the Company issued a total of 450,000 shares to a director and consultants for services rendered.



Note 6

Subsequent Events



Subsequent to November 30, 2007, a company with a director in common advanced $355,000 for operations and these shares were converted to common shares under the terms of a pre-existing agreement at $0.25 per share for a total of 1,420,000 shares.



F-9





CLEAN POWER TECHNOLOGIES INC.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months ended November 30, 2007

(Unaudited)

(Stated in U.S. Dollars)



Note 7

Recently Issued Accounting Pronouncements



In September, 2006, the FASB issued SFAS No. 157, FAIR VALUE EASUREMENTS. The statement defines fair value, determines appropriate measurement methods, and expands disclosure requirements about those measurements. SFAS No. 157 is effective for our fiscal year beginning September 1, 2008.



In February 2007, the FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES, including an amendment of FASB Statement No. 115. This pronouncement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 is effective as of the beginning of our fiscal year which begins September 1, 2008.



None of the above new pronouncements has current application to the Company, but may be applicable to the Company's future financial reporting.

F-10



Item 2.   Managements Discussion and Analysis or Plan of Operation



This current quarterly report contains forward-looking statements as that term is defined in section 27A of the United States Securities Act of 1933 and section 21E of the United States Securities Exchange Act of 1934.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.  The following discussion and analysis of our financial conditions and results of operations should be read in conjunction with our interim consolidated financial statements and notes thereto appearing elsewhere herein.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.



(a) Plan of Operation



Unless the context otherwise requires, the terms the Company, we, us, and our as used throughout this report refr to Clean Power Technologies Inc., a Nevada corporation, and its wholly-owned subsidiary Clean Power Technologies Lmites (CPTL), an entity formed under the laws of the United Kingdom.  We have not generated any revenues from products, services or operations since the inception of our Company. We are a development stage company which is presently undertaking research and development on a hybrid steam engine.



Our plan of operation is to complete the research and development on our technology over the next several months and if successful, to license the technology or form partnerships for the use of the technology with any customers we may identify.



At present we do not have sufficient funds available to execute our business plan for the development of the technology.   We have to date been funded by existing working capital and by shareholder loans from one of our directors and officers.  There can be no assurance that we will be able to continue to raise the funding required to continue operations.  During the next twelve (12) months, the Company will require approximately Two Million ($2,000,000) dollars for development and operating costs, of which approximately One Million Five Hundred Thousand ($1,500,000) dollars will be applied to research and development of the project.   As of November 30, 2007, the Company had available cash of approximately One Hundred Thousand ($100,000) dollars and subsequently raised an additional Three Hundred and Fifty-Five Thousand ($355,000) dollars by way of convertible loans from a related party.  The Company will need to raise approximately One Million Five Hundred Thousand ($1,500,000) in additional funds to meet its planned operations for the next twelve months.  There can be no assurance that the Company will be able to raise these required funds.  If the Company cannot raise the required funds then operations may cease.



1



At the end of July, 2006, CPTL took possession of Unit 7(W), E-Plan Industrial Estate, Newhaven, East Sussex, U.K. The remainder of that year was largely spent in renovating the infrastructure of the 2000 square feet building, including the electrical power and lighting provision and the office facilities. An air compressor was installed to provide a fluid flow for engine testing in advance of and, later, in parallel with, a supply of steam from the saturated liquid energy accumulator, as this was developed. A start was also made on the more direct development programme by stripping superfluous fittings from the Wankel engine compartments of the two identical Mazda RX8 vehicles earlier purchased. Using the compressed air supply the engine from one of these vehicles was motored, providing a useful early proof of the convenience with which the unit could produce power from an independent fluid source ( as with steam from the accumulator in the ultimate application). Similarly, its continuous restarting ability, independent of stopping position, because of its double cylinder-volume construction, was encouragingly demonstrated as well.



Early 2007 was committed to the design and building of a test cell within the main hall of the test facility to enclose engines and components on test at full operating conditions of pressure and temperature, with both hydrocarbon combustion and in anti-pollution mode using steam alone from the accumulator. The heavy steel construction of the test cell, which enclosed a substantial bed-plate as a foundation for components, was agreed by the insurance authorities to provide full protection from any conceivable otherwise catastrophic failure.



In May 2007 our partners Doosan - Babcock delivered the prototype energy accumulator, manufactured under contract by Poole Process Equipment Ltd. to full statutory pressure vessel licensing requirements. Since then and continuously, development of the programme has been involved with installation of the facilities for the test cell and the experimental programme. These include the liquid, gas and steam supply and exhaust ducting; the comprehensive instrumentation facilities with the associated electrical and electronic connections for the sophisticated control systems required for the complete CESAR (CleanEnergy Storage And Recovery) project. This comprises a main combustion engine, exhaust heat recovery components, energy accumulator and an auxiliary engine; plus the separate power absorbing dynamometers for the engines.



To augment the limited power output (170 kW) of the Wankel engines from the Mazda vehicles into the range with which the CESAR project will, initially at least, be primarily concerned, diesel engined trucks, delivery was taken in June 2007 of a Caterpillar C-15 diesel engine developing 600 kW which is now fully operational in the test cell. The main experimental programme began in September, 2007, its first phase for detailed determination of the performance of the Caterpillar engine over its full range of speed and load. This provides a data base for control system operation and detailed design of subsequent builds of the accumulator system with measurements of air and fuel rates of flow, fluid pressures, temperatures and power output all electronically logged.



The second phase of the test programme began in October 2007 in which the diesel engine exhaust is ducted through the accumulator vessel and rates of pressure and temperature rise and fall with time in the vessel are observed over a wide range of combustion engine operating conditions, with varying loads and exhaust gas temperatures, the latter tempered with closely controlled rates of atmospheric air ingression to the main engine exhaust stream. This series will yield full data on the fluid flow and heat transfer performance of the installed heat recovery components providing the data base for detailed design of CESAR systems subsequent to the prototype under test. Initial tests have provided confirmation of theoretical predictions of the rate at which pressure develops in the energy accumulator and of the predictions of heat transfer in the economiser and evaporator components which recover heat from the combustion engine exhaust into the energy storage system. Preliminary experiments have also begun on using the stored energy to drive a steam engine of conventional design which again has given encouraging early data upon the system performance.

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The third and overlapping phase of this stage of the tests, extending into mid-2008, is concentrating on the relation between the power output from the auxiliary vapour engine and rate of pressure change in and rate of vapour flow from the energy accumulator. This will be a crucial part of the research programme in indicating the efficacy of the complete CESAR system and in the design of systems successor to the prototype for the several potential applications. The existing steam engine will be replaced with a modern design capable of developing the power outputs and advanced vapour operating conditions for which the CESAR system is suited. Observations of the performance of the prototype equipment supplied through our partners, Doosan-Babcock, with their further collaboration will be used to produce a design improved in material, structural and thermodynamic performance. The test schedule will include joint continuous operation of the combustion and auxiliary engines to maximise thermal efficiency and to demonstrate the ultimate utilisation of the control system and will run continuously into the Spring of 2008.



Up to the present time the total programme of our Company has been almost wholly concerned with research directed to verifying the theoretical predictions that were the foundation of the CESAR system. A substantial development component of the programme will now commence and will require appropriate augmentation of the engineering team. This is essential for design studies of potential applications of the total system and will commence using the empirical data revealed by the research programme. These applications include using the CESAR system to provide refrigeration power for trucks when the main combustion engine is shut down, with a target of road testing an especially directed system in late 2008. Further applications include provision of auxiliary power derived at low recurrent cost from the exhaust heat of combustion engines for other transportation areas, including lighter vehicles than trucks and heavier in the form of railway locomotives. There is also a promising application in marine applications, not excluding commercial vessels but particularly attractive for pleasure craft with their heavy requirement for auxiliary electrical power when not under way.



For the lighter design of the CESAR system, for vans and passenger cars for example, a substantial repetition of all the phases of the test programme will be commenced in Spring 2008 using a smaller multi-cylinder reciprocating engine or a Wankel engine to replace the current Caterpillar C-15 engine. This will require appropriate and novel valve designs which are currently in hand to control the fuel and vapour flows. This second programme would provide design support for all components of the CESAR saturated liquid energy accumulator system with a target of road testing such a vehicle one year later, in late summer 2009.



This extended development testing and design programme will require augmented scientific and engineering manpower, estimated as a further ten professionally or technically qualified staff. To enable this necessary expansion in August 2007 arrangements were put in hand for the purchase of a neighbouring industrial unit to increase to 20,000 square feet the office and workshop space available for the programme. This was to include a large open area suited for the retrofitting of CESAR units to trucks, examples of which have already been offered by potential customers. The transaction for the acquisition of the larger facility did not complete and the Company is looking for further expansion facilities.  To date, a suitable site has not been located.  Our present location is limited in space and it may be required that the Company proceed with its development work in separate locations.  Additional space is required for simultaneous work on

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three (3) separate heat recovery CESAR process systems.  The first being the refrigeration system, the second being the auxiliary truck engines and the third being for auto vehicles and, specifically, for the Mazda RX 8 Project.  A larger space will be required for additional engineers and personnel for each of the aforementioned projects.  We estimate that we will require an additional seven thousand (7,000) square feet to complete our research and development work.  We intend to lease additional space and will evaluate our options when the project is in a more advanced stage.



(b)   Off-balance sheet arrangements



Not Applicable



ITEM 3. CONTROLS AND PROCEDURES



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934, as amended, (the Exchange Act) reports is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.



We carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 as of the end of the period covered by this quarterly report.  Based upon the foregoing, our President and our Chief Financial Officer concluded that our disclosure controls and procedures are effective and adequate for the purposes set forth in the definition in the Exchange Act rules.



There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to in the immediately preceding paragraph that occurred during our last fiscal quarter ended November 30, 2007, that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.



PART II  OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS



None.



ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



During the quarter ended November 30, 2007, we issued the following securities which were sold without registration under the Securities Act of 1933, in reliance on Section 4(2), and the

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provisions of Regulation S.  There were no underwriting discounts or commissions paid in connection with the sale of these securities.



|Date of Issuance   | Issued To:                                                                                                                                                           | Title and Number of Shares Issued | Consideration                                         
|------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------------------
|September 28, 2007 | David William Thursfield
Lion House, 15 Lypiatt Terrace
Cheltenham
Gloucestershire, UK GL50 2SX
Mr. Thursfield is a director of the Company                          | 250,000 Common Shares             | Directors Fees                                        
|September 28, 2007 | Christopher Ian Althorp-Gormlay
Hoefield House, Church Lane
The Leigh
Gloucestershire, UK  GL19 4AD
Mr. Althorp-Gormlay is a member of the Companys advisory board. | 100,000 Common Shares             | Advisory Committee Fees                               
|September 28, 2007 | James Edward Mason
Penbra 38 High Street
Eaton on the hill
Stanford Lincs, UK  PE9 3LN
Mr. Mason is a member of the Companys advisory board.                        | 100,000 Common Shares             | Advisory Committee Fees                               
|October 29, 2007   | Unicus Corporation
436-35th Avenue N.W.,
Calgary, Alberta
T2K 0C1
Unicus Corporation has a director and officer in common with the Company                           | 1,000,000 Common Shares           | Private Placement @ $0.25 per Common Share            
|October 30, 2007   | Abdul Mitha
436  35 Avenue NW
Calgary, Alberta  T2K 0C1
Mr. Mitha is a Director and Officer of the Company                                                          | 3,021,586 Common Shares           | Secured Convertible Debenture @ $0.50 per Common Share



All of the shares noted above were sold under the Regulation S exemption in compliance with the exemption from the registration requirements found in Regulation S promulgated by the Securities and Exchange Commission (the SEC) under the Securities Act of 1933.  The offer and sale to the purchasers was made in an offshore transaction as defined by Rule 902(h).  No directed selling efforts were made in the U.S. as defined in Rule 902(c).  The offer and sale to the purchasers was not made to a U.S. person or for the account or benefit of a U.S. person. The following conditions were present in the offer and sale:  a) The purchaser of the securities certified that it is not a U.S. person and did not acquire the shares for the account or benefit of any U.S. person; b) The purchaser has agreed to resell the securities only in compliance with Regulation S pursuant to a registration under the Securities Act, or pursuant to an applicable exemption from registration; and has agreed not to engage in hedging transactions with regard to the securities unless in compliance with the Securities Act; c) The purchaser has acknowledged and agreed with the Company that the Company shall refuse registration of any transfer of the securities unless made in accordance with Regulation S, pursuant to a registration statement under the Securities Act, or pursuant to an applicable exemption from registration; and d) The purchaser has represented that it is acquiring the shares for its own account, for investment purposes only and not with a view to any resale, distribution or other disposition of the shares in violation of the United States federal securities laws. Neither the Company nor any person acting on its behalf offered or sold these securities by any form of general solicitation or general advertising.  The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption there from.

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ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.

ITEM 5.

OTHER INFORMATION

On January 2, 2008, we issued a total of 1,420,000 shares of restricted Common Shares at $0.25 per share to Unicus Corporation pursuant to the terms and conditions of a financing agreement between the Company and Unicus Corporation.  The Company was provided with financing from Unicus in the amount of $355,000.   Unicus Corporation has a director and officer in common with the Company.

ITEM  6.

EXHIBITS



|EXHIBIT 
NO. | IDENTIFICATION OF EXHIBIT                                                                                                                                              
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1          | Articles of Incorporation                                                                                                                                              
|3.2          | Bylaws                                                                                                                                                                 
|3.3          | Amendment to Articles of Incorporation dated June 12, 2006                                                                                                             
|3.4          | Amendment to Articles of Incorporation dated June 13, 2006                                                                                                             
|10.1         | Agreement and Plan of Merger between the Company, Clean Energy and Power Solutions Inc. and the shareholders of Clean Power Technologies Inc. executed on May 22, 2006.
|10.2         | Memorandum of Understanding between the Company and Mitsui Babcock Energy Limited dated September 11, 2006                                                             
|10.3         | Collaboration Agreement between the Company and Mitsui Babcock Limited dated October 11, 2006                                                                          
|10.4         | Stock Option and Stock Award Plan approved by the Board of Directors                                                                                                   
|10.5         | Investment Agreement, dated as of January 18, 2007 by and between Clean Power Technologies, Inc. and Dutchess Private Equities Fund, L.P.                              

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|10.6 | Registration Rights Agreement, dated as of January 18, 2007, by and between Clean Power Technologies, Inc. and Dutchess Private Equities Fund, L.P.                                | Incorporated by reference to our Form 8-K filed on January 24, 2007 
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------
|10.7 | Subscription Agreement from Doosan Babcock Energy Ltd., executed pursuant to the Collaboration Agreement between the Company and Doosan Babcock Energy Ltd. dated October 11, 2006 | Incorporated by reference to our Form 8-K filed on June 20, 2007    
|16.1 | Letter regarding Change in Certifying Accountant dated June 4, 2007                                                                                                                | Incorporated by reference to our Form 8-K filed on June 4, 2007     
|22.1 | Notice of Proposal for approval of agreement and plan of merger, forward split and name change                                                                                     | Incorporated by reference to our Schedule 14C filed on May 18, 2006 
|22.2 | Notice of Annual Meeting of Shareholders                                                                                                                                           | Incorporated by reference to our Schedule 14C filed on April 5, 2007
|31.1 | Section 302 Certification - Principal Executive Officer                                                                                                                            | Filed herewith                                                      
|31.2 | Section 302 Certification - Principal Financial Officer                                                                                                                            | Filed herewith                                                      
|32.1 | Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                              | Filed herewith                                                      
|32.2 | Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                              | Filed herewith                                                      



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 14th day of January, 2008.



CLEAN POWER TECHNOLOGIES INC.





By:_/s/ Abdul Mitha_______________

Name: Abdul Mitha

Title: President/CEO, principal executive officer



By: /s/ Diane Glatfelter____________

Name: Diane Glatfelter

Title: Chief Financial Officer, principal financial officer



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