----

----

| (Mark      One)                                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------|
| [X]  QUARTERLY REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934                   |
|                                                                                                                               |   |
|                                                                                                                               | For      the quarterly period ended November  30,      2009 |
|                                                                                                                               |   |
| [   ]  TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|                                                                                                                               |   |
|                                                                                                                               | For      the transition period from __________ to ______________ |
|                                                                                                                               |
| 000-51716                                                                                                                          |
| (Commission      File Number)                                                                                                      |
|                                                                                                                               |
| CLEAN POWER TECHNOLOGIES    INC.                                                                                                   |
| (Exact      name of registrant as specified in itscharter)                                                                         |

| Nevada                                                                                       | 98-0413062                                |
|----------------------------------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization)                          | (I.R.S.      Employer Identification No.) |
|                                                                                         |                                      |
| Unit 7(W) E-Plan Industrial Estate New Road, New      Haven, East Sussex, UK                 | BN90EX                                    |
| (Address      of principal executive offices)                                                | (Zip      Code)                           |
|                                                                                         |                                      |
| + 44 1273-516013                                                                             |
| (Registrant’s      telephone number, including area code)                              |
|                                                                                         |
| (Former      name, former address and former fiscal year, if changed since last      report) |

|   | Yes      [X]  No [  ] |
|--------|-------------------------------------------|
|   | Yes      [X]  No [  ] |

|   | Yes      [  ]  No[  ] |
|--------|-----------------------------------------------------|

|    Large      accelerated filer | [  ] | Accelerated      filer         | [  ] |
|------------------------------------------------|----------------|--------------------------------|----------------|
|    Non-accelerated      filer   | [  ] | Smaller      reporting company | [X]            |

|   | Yes      [  ]  No [X] |
|--------|-------------------------------------------|

|   | Yes      [  ]  No[  ] |
|--------|-----------------------------------------------------|

| 79,440,942 common shares outstanding as of January      8, 2010                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| Indicate      the number of shares outstanding of each of the issuer’s classes of common      stock, as of the latest practicabledate. |

----

|          | PART      I – Financial Information                                                             |        Page |
|---------------|-------------------------------------------------------------------------------------------------------|------------------|
|          |                                                                                                  |             |
| Item      1.  | Financial      Statements                                                                             |        2    |
|          |                                                                                                  |             |
| Item      2.  | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations |        3    |
|          |                                                                                                  |             |
| Item      3.  | Quantitative      and Qualitative Disclosures About Market Risk                                       |        5    |
|          |                                                                                                  |             |
| Item      4T. | Controls      and Procedures                                                                          |        5    |
|          |                                                                                                  |             |
|          | PART      II – Other Information                                                                |             |
|          |                                                                                                  |             |
| Item      1.  | Legal      Proceedings                                                                                |        6    |
|          |                                                                                                  |             |
| Item      1A. | Risk      Factors                                                                                     |        6    |
|          |                                                                                                  |             |
| Item      2.  | Unregistered      Sales of Equity Securities and Use of Proceeds                                      |        6    |
|          |                                                                                                  |             |
| Item      3.  | Defaults      Upon Senior Securities                                                                  |        7    |
|          |                                                                                                  |             |
| Item      4.  | Submission      of Matters to a Vote of Security Holders                                              |        7    |
|          |                                                                                                  |             |
| Item      5.  | Other      Information                                                                                |        7    |
|          |                                                                                                  |             |
| Item      6.  | Exhibits                                                                                              |        7    |
|          |                                                                                                  |             |
|          | Signatures                                                                                            |        11   |

----

|                                                              | Page                    |
|-------------------------------------------------------------------|-------------------------|
| Unaudited      Consolidated Financial Statements                  |                    |
|                                                              |                    |
| Consolidated      Balance Sheets                                  |        F-2         |
|                                                              |                    |
| Consolidated      Statements of Operations and Comprehensive Loss |        F-3         |
|                                                              |                    |
| Consolidated      Statements of Cash Flows                        |        F-4 and F-5 |
|                                                              |                    |
| Notes      to Unaudited Consolidated Financial Statements         |        F-6 to F-29 |

----

----

| ASSETS                                                                                                                                                                                                                                                                             |   | November      30,2009 |        |   | August      31,2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|-------------|--------|---------------------|--------|
| Current                                                                                                                                                                                                                                                                            |   |                  |        |   |                |   |
| Cash                                                                                                                                                                                                                                                                               |   | $                     | 607,875     |   |                | $      | 29,346 |   |
| Amounts      Receivable - Note 4                                                                                                                                                                                                                                                   |   |                  | 23,503      |   |                |   | 38,637 |   |
| Prepaid      expense                                                                                                                                                                                                                                                               |   |                  | 75,580      |   |                |   | 95,100 |   |
|                                                                                                                                                                                                                                                                               |   |                  | 706,958     |   |                |   | 163,083 |   |
|                                                                                                                                                                                                                                                                               |   |                  |        |   |                |   |   |   |
|      Plant      and equipment - Note 5                                                                                                                                                                                                                    |   |                  | 886,729     |   |                |   | 831,168 |   |
| Deferred      financing costs, net of accumulated amortization of      $130,767 and $107,705 as of  November 30, 2009 and August 31,      2009, respectively                                                                                                        |   |                  | 54,233      |   |                |   | 77,295 |   |
| Total      Assets                                                                                                                                                                                                                                                                  |   | $                     | 1,647,920   |   |                | $      | 1,071,546 |   |
|                                                                                                                                                                                                                                                                               |   |                  |        |   |                |   |   |   |
| Liabilities      and Stockholders' Deficiency                                                                                                                                                                                                                                      |   |                  |        |   |                |   |   |   |
| Current                                                                                                                                                                                                                                                                            |   |                  |        |   |                |   |   |   |
| Accounts      payable and accrued liabilities                                                                                                                                                                                                                                      |   | $                     | 166,472     |   |                | $      | 561,492 |   |
| Accounts      payable – related party                                                                                                                                                                                                                                        |   |                  | 186,065     |   |                |   | 159,427 |   |
| Prepaid      deposit                                                                                                                                                                                                                                                               |   |                  | 84,000      |   |                |   | 84,000 |   |
| Wages      payable                                                                                                                                                                                                                                                                 |   |                  | -           |   |                |   | 56,098 |   |
| Wages      payable - related party - Note 6                                                                                                                                                                                                                                        |   |                  | 649,582     |   |                |   | 499,582 |   |
| Loan      payable                                                                                                                                                                                                                                                                  |   |                  | -           |   |                |   | 84,000 |   |
| Stock      option liability - Note 10(ii)                                                                                                                                                                                                                                          |   |                  | 519,820     |   |                |   | 718,836 |   |
| Total      current liabilities                                                                                                                                                                                                                                                     |   |                  | 1,605,939   |   |                |   | 2,163,435 |   |
|                                                                                                                                                                                                                                                                               |   |                  |        |   |                |   |   |   |
| Due      to related party - Note 6                                                                                                                                                                                                                                                 |   |                  | 439,885     |   |                |   | 445,690 |   |
| Secured      convertible notes payable - including $62,594 accrued interest - Note      8                                                                                                                                                                                          |   |                  | 493,479     |   |                |   | 264,898 |   |
| Embedded      derivative liability - Note 8 and Note 9                                                                                                                                                                                                                             |   |                  | 1,072,449   |   |                |   | 779,193 |   |
| Warrant      liability - Note 8 and Note 9                                                                                                                                                                                                                                         |   |                  | 874,015     |   |                |   | 1,667,173 |   |
| Total      Liabilities                                                                                                                                                                                                                                                             |   |                  | 4,485,767   |   |                |   | 5,320,389 |   |
|                                                                                                                                                                                                                                                                               |   |                  |        |   |                |   |   |   |
| Stockholders'      Deficiency                                                                                                                                                                                                                                                      |   |                  |        |   |                |   |   |   |
| Preferred      stock:  100,000,000 Class "A"   preferred shares      authorized with zero  shares      outstanding;   100,000,000 Class      "B"   preferred shares authorized with zero shares      outstanding; |   |                  | -           |   |                |   | - |   |
| Common      Stock, $0.001 par value: 350,000,000 shares authorized;   79,440,942      and 72,220,695 shares issued and outstanding   at      November 30, 2009 and August 31, 2009, respectively.                                                    |   |                  | 79,441      |   |                |   | 72,221 |   |
| Additional      paid in capital                                                                                                                                                                                                                                                    |   |                  | 13,900,543  |   |                |   | 12,255,573 |   |
| Accumulated      other comprehensive loss                                                                                                                                                                                                                                          |   |                  | (69,464     | )      |                |   | (58,221 | ) |
| Accumulated      deficit during the development stage                                                                                                                                                                                                                              |   |                  | (16,748,367 | )      |                |   | (16,518,416 | ) |
| Total      Stockholders' Deficiency                                                                                                                                                                                                                                                |   |                  | (2,837,847  | )      |                |   | (4,248,843 | ) |
| Total      Liabilities and Stockholders' Deficiency                                                                                                                                                                                                                                |   | $                     | 1,647,920   |   |                | $      | 1,071,546 |   |

----

|                                             |   | Three      months endedNovember      30, |       |   |   |   |
|--------------------------------------------------|--------|------------------------------------------|------------|--------|--------|--------|
|                                             |   | 2009                                     |       |   | 2008   |   |   | May      12, 2006 (Date      of Inception) to November 30, 2009 |   |
|  Expense                                    |   |                                     |       |   |   |   |   |   |   |
| Depreciation                                     |   | $                                        | 77,329     |   |   | $      | 53,673 |   |   | $ | 592,055 |   |
| Office      and administration                   |   |                                     | 273,238    |   |   |   | 287,589 |   |   |   | 2,359,207 |   |
| Organization      costs                          |   |                                     | -          |   |   |   | - |   |   |   | 2,500 |   |
| Research      and development                    |   |                                     | 83,324     |   |   |   | 61,123 |   |   |   | 1,379,064 |   |
| Foreign      exchange loss (gain)                |   |                                     | 13,018     |   |   |   | (738 | ) |   |   | 25,261 |   |
| Amortization      of stock option benefits       |   |                                     | (199,014   | )      |   |   | 20,988 |   |   |   | 519,822 |   |
| Professional      fees                           |   |                                     | 212,536    |   |   |   | 64,934 |   |   |   | 3,045,668 |   |
| Salaries      and consulting fees - Note 6       |   |                                     | 421,660    |   |   |   | 352,893 |   |   |   | 7,924,646 |   |
| Directors'      fees                             |   |                                     | -          |   |   |   | - |   |   |   | 430,000 |   |
| Administrator      fees                          |   |                                     | -          |   |   |   | - |   |   |   | 258,000 |   |
| (Loss)      from operations                      |   |                                     | (882,091   | )      |   |   | (840,462 | ) |   |   | (16,536,223 | ) |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Other      income and expense:                   |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Interest      expense                            |   |                                     | (257,486   | )      |   |   | (110,303 | ) |   |   | (1,070,952 | ) |
| Derivative      income (expense) – Note 8  |   |                                     | 932,688    |   |   |   | 1,976,287 |   |   |   | 987,870 |   |
| Deferred      financing amortization costs       |   |                                     | (23,062    | )      |   |   | (23,062 | ) |   |   | (129,062 | ) |
| Total      other income (expense)                |   |                                     | 652,140    |   |   |   | 1,842,922 |   |   |   | (212,144 | ) |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Net      income (loss) for the period            |   |                                     | (229,951   | )      |   |   | 1,002,460 |   |   |   | (      16,748,367 | ) |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Other      comprehensive loss:                   |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Unrealized      foreign exchange on transactions |   |                                     | (11,243    | )      |   |   | (9,680 | ) |   |   | (69,464 | ) |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Comprehensive      gain (loss) for the period    |   | $                                        | (241,194   | )      |   | $      | 992,780 |   |   | $ | (16,817,831 | ) |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Basic      net (loss) per share                  |   | $                                        | (0.00      | )      |   | $      | 0.02 |   |   |   |   |   |
| Diluted      net (loss) per share                |   | $                                        | (0.00      | )      |   | $      | 0.01 |   |   |   |   |   |
|                                             |   |                                     |       |   |   |   |   |   |   |   |   |   |
| Weighted      average number of shares - Basic   |   |                                     | 76,815,954 |   |   |   | 66,019,904 |   |   |   |   |   |
| Weighted      average number of shares - Diluted |   |                                     | 76,815,954 |   |   |   | 71,734,189 |   |   |   |   |   |

----

|                                                                                            |   | Three      months ended November 30, |       |   |   |   |
|-------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|--------|--------|--------|
|                                                                                            |   | 2009                                 |       |   | 2008   |   |   | May      12, 2006 (Date      of Inception) to November      30, 2009 |   |
| Cash      flows from operating activities:                                                      |   |                                 |       |   |   |   |   |   |   |
| Net      income (loss)                                                                          |   | $                                    | (229,951   | )      |   | $      | 1,002,460 |   |   | $ | (16,748,367 | ) |
| Adjustments      to reconcile net income (loss) to cash used      in operating activities: |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                    |   |                                 | 77,329     |   |   |   | 53,673 |   |   |   | 592,055 |   |
| Change      in valuation of stock option liability                                              |   |                                 | (199,014   | )      |   |   | 20,988 |   |   |   | 519,822 |   |
| Amortization      of debt discount                                                              |   |                                 | 204,840    |   |   |   | 64,625 |   |   |   | 679,680 |   |
| Amortization      of deferred financing costs                                                   |   |                                 | 23,062     |   |   |   | 23,062 |   |   |   | 130,767 |   |
| Interest      accrued on debt                                                                   |   |                                 | 10,056     |   |   |   | 8,697 |   |   |   | 148,228 |   |
| Interest      accrued on senior convertible notes                                               |   |                                 | 40,000     |   |   |   | 40,000 |   |   |   | 223,111 |   |
| Derivative      (income) expense                                                                |   |                                 | (932,688   | )      |   |   | (1,976,287 | ) |   |   | (987,870 | ) |
| Issuance      of common stock for professional services                                         |   |                                 | -          |   |   |   | - |   |   |   | 1,809,609 |   |
| Issuance      of common stock for director services                                             |   |                                 | -          |   |   |   | 33,630 |   |   |   | 430,000 |   |
| Issuance      of common stock for consulting services                                           |   |                                 | -          |   |   |   | - |   |   |   | 1,171,880 |   |
| Issuance      of common stock for prior period salary                                           |   |                                 | -          |   |   |   | - |   |   |   | 2,600,000 |   |
| Issuance      of common stock for administrative services                                       |   |                                 | -          |   |   |   | - |   |   |   | 258,000 |   |
| Issuance      of common stock for R&D                                                       |   |                                 | -          |   |   |   | - |   |   |   | 402,000 |   |
| Issuance      of stock award for consulting services                                            |   |                                 | -          |   |   |   | - |   |   |   | 13,750 |   |
| Stock-based      compensation                                                                   |   |                                 | 105,429    |   |   |   | 118,000 |   |   |   | 975,814 |   |
| Changes      in assets and liabilities:                                                         |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Amounts      Receivable                                                                         |   |                                 | 15,556     |   |   |   | (41,685 | ) |   |   | (18,679 | ) |
| Prepaid      expenses and other current assets                                                  |   |                                 | 20,709     |   |   |   | (112,126 | ) |   |   | (66,359 | ) |
| Prepaid      deposit                                                                            |   |                                 | -          |   |   |   | 83,990 |   |   |   | 84,000 |   |
| Accounts      payable and accrued expense                                                       |   |                                 | (275,385   | )      |   |   | 94,284 |   |   |   | 998,599 |   |
| Net      cash used in operating activities:                                                     |   |                                 | (1,140,057 | )      |   |   | (586,689 | ) |   |   | (6,783,960 | ) |
|                                                                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                      |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Acquisition      of plant and equipment                                                         |   |                                 | (132,890   | )      |   |   | (155,010 | ) |   |   | (1,455,354 | ) |
| Cash      acquired from business combination                                                    |   |                                 | -          |   |   |   | - |   |   |   | 62,070 |   |
| Net      cash used in investing activities:                                                     |   |                                 | (132,890   | )      |   |   | (155,010 | ) |   |   | (1,393,284 | ) |
|                                                                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                      |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Proceeds      from issuance of senior convertible notes                                         |   |                                 | -          |   |   |   | - |   |   |   | 1,815,000 |   |
| Proceeds      from issuance of common stock                                                     |   |                                 | 2,000,000  |   |   |   | - |   |   |   | 4,743,766 |   |
| Proceeds      from loan                                                                         |   |                                 | -          |   |   |   | - |   |   |   | 84,000 |   |
| Repayment      of loan                                                                          |   |                                 | (84,000    | )      |   |   | - |   |   |   | (84,000 | ) |
| Due      to related party                                                                       |   |                                 | (52,573    | )      |   |   | 68,289 |   |   |   | 2,285,504 |   |
| Net      cash provided by financing activities:                                                 |   |                                 | 1,863,427  |   |   |   | 68,289 |   |   |   | 8,844,270 |   |
|                                                                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Effect      of foreign exchange on transactions                                                 |   |                                 | (11,951    | )      |   |   | (14,657 | ) |   |   | (59,151 | ) |
|                                                                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash                                                            |   |                                 | 578,529    |   |   |   | (688,067 | ) |   |   | 607,875 |   |
| Cash      at beginning of period                                                                |   |                                 | 29,346     |   |   |   | 1,203,030 |   |   |   | - |   |
| Cash      and cash equivalents at end of period                                                 |   | $                                    | 607,875    |   |   | $      | 514,963 |   |   | $ | 607,875 |   |
|                                                                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |

----

|                                                                                 |   | Three      months ended November 30, |   |   |   |   |
|--------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|--------|--------|
|                                                                                 |   | 2009                                 |   |   | 2008   |   |   | May      12, 2006 (Date      of Inception) to November      30, 2009 |   |
| Supplemental      schedule of cash flows:                                            |   |                                 |   |   |   |   |   |   |   |
| Cash      paid during the period for interest                                        |   | $                                    | -      |   |   | $      | - |   |   | $ | - |   |
|                                                                                 |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Supplemental      schedule of non-cash financing and      investing activities: |   |                                 |   |   |   |   |   |   |   |
| Conversion      of note payable to common stock                                      |   | $                                    | -      |   |   | $      | - |   |   | $ | 1,530,756 |   |
| Total:                                                                               |   | $                                    | -      |   |   | $      | - |   |   | $ | 1,530,756 |   |
|                                                                                 |   |                                 |   |   |   |   |   |   |   |   |   |   |

----

| (a)   | Organization |
|-----------------|--------------|

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

|   | By      agreement dated May 22, 2006, the Company agreed to issue 30,765,377      common shares for all the issued and outstanding common shares of Clean      Power Technologies Inc. (“CPTI private”), a privately held company,      incorporated on March 14, 2006 in the State of Nevada.  CPTI      private is developing a project for a gas/steam or diesel/steam hybrid      technology. CPTI private has incorporated a wholly-owned subsidiary, Clean      Power Technologies Limited, (“CPTL-UK”) a company based in, and      incorporated under the laws of the United Kingdom on May 10, 2006, to      carry on all its research and development.  On April 24, 2006,      CPTI private entered a research and development agreement to fund all      future costs for research, development, patenting, licensing and marketing      for an alternative hybrid fuel technology that combines diesel and steam      and gas (petrol) and steam technologies for a 100% ownership of the      technology and any associated intellectual rights (see Note      6).  CPTI private and CEPS merged on June 20, 2006 with CEPS      being the surviving entity. On July 10, 2006 CEPS became a wholly-owned      subsidiary of the Company when the stockholders of CPTI private tendered      their remaining shares. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      Company’s fiscal year-end is August31. |
|--------|-------------------------------------------------------|

----

|   | (a) | Principles      of Consolidation |
|--------|-----|----------------------------------|

----

| Senior      Secured Convertible Note Payable:                                         |   | Carrying      Value |     |   | Fair      Value |   |
|---------------------------------------------------------------------------------------|--------|---------------------|----------|--------|-----------------|--------|
|  $2,000,000      face value senior secured convertible note due July 10,    2010 |   | $                   | (430,885 | )      |            | $      | (2,065,551 | ) |

| Our      financing arrangements giving rise toderivative      financial instruments:         |   | Compound      EmbeddedDerivative |       |   | WarrantDerivatives |   |     | TotalDerivatives |   |
|----------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------|--------------------|--------|----------|------------------|--------|
| $2,000,000      face value senior  secured convertible note due July 10,      2010 |   | $                                | (1,072,449 | )      |               | $      | (605,000 | )                |   | $ | (1,677,449 | ) |
| $1,000,000      common stock purchase agreement dated February 10, 2009                      |   |                             | -          |   |               |   | (19,770  | )                |   |   | (19,770 | ) |
| $500,000      common stock purchase agreement dated October 2, 2009                          |   |                             | -          |   |               |   | (128,250 | )                |   |   | (128,250 | ) |
| $1,000,000      common stock purchase agreement dated October 16, 2009                       |   |                             | -          |   |               |   | (120,995 | )                |   |   | (120,995 | ) |
|                                                                                         |   | $                                | (1,072,449 | )      |               | $      | (874,015 | )                |   | $ | (1,946,464 | ) |

----

| (d)   | Financial      Instruments (Cont’d) |
|-----------------|-------------------------------------------|

| Our      financing arrangement giving rise toderivative      financial instruments and the income effects: |   | Compound      EmbeddedDerivative |     |   | WarrantDerivatives |   |      | TotalDerivatives |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|--------|--------------------|--------|-----------|------------------|--------|
| $2,000,000      face value senior secured convertible note due July 10,    2010                            |   | $                                | (293,256 | )      |               | $      | 1,061,429 |             |   | $ | 768,173 |   |
| $1,000,000      common stock purchase agreement dated February 10, 2009                                    |   |                             | -        |   |               |   | (19,026   | )                |   |   | (19,026 | ) |
| $500,000      common stock purchase agreement dated October 2, 2009                                        |   |                             | -        |   |               |   | 142,313   |             |   |   | 142,313 |   |
| $1,000,000      common stock purchase agreement dated October 16, 2009                                     |   |                             | -        |   |               |   | 41,228    |             |   |   | 41,228 |   |
|                                                                                                       |   | $                                | (293,256 | )      |               | $      | 1,225,944 |             |   | $ | 932,688 |   |

----

| (d)   | Financial      Instruments (Cont’d) |
|-----------------|-------------------------------------------|

| Our      financing arrangement giving rise toderivative      financial instruments and the income effects: |   | Compound      EmbeddedDerivative |    |   | WarrantDerivatives |   |      | TotalDerivatives |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|--------------------|--------|-----------|------------------|--------|
| $2,000,000      face value senior secured convertible note due July 10,    2010                            |   | $                                | 940,100 |   |               | $      | 1,036,187 |             |   | $ | 1,976,287 |   |

| Our      financing arrangement giving rise to derivative financial instruments and      the income effects: |   | Compound      EmbeddedDerivative |    |   | WarrantDerivatives |   |      | TotalDerivatives |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|--------------------|--------|-----------|------------------|--------|
| $2,000,000      face value seniorsecured convertible note due July 10,2010                                  |   | $                                | 477,296 |   |               | $      | 2,164,857 |             |   | $ | 2,642,153 |   |
| $1,000,000      common stock purchase agreement dated February 10, 2009                                     |   |                             | -       |   |               |   | 724,470   |             |   |   | 724,470 |   |
| $500,000      common stock purchase agreement datedOctober      2, 2009                                     |   |                             | -       |   |               |   | 142,313   |             |   |   | 142,313 |   |
| $1,000,000      common stock purchase agreement dated October 16, 2009                                      |   |                             | -       |   |               |   | 41,228    |             |   |   | 41,228 |   |
|                                                                                                        |   | $                                | 477,296 |   |               | $      | 3,072,868 |             |   | $ | 3,550,164 |   |
|                                                                                                        |   |                             |    |   |               |   |      |             |   |   |   |   |
| Day-one      derivative losses:                                                                             |   |                             |    |   |               |   |      |             |   |   |   |   |
| $2,000,000      face value senior secured convertible note due July10,2010                                  |   |                             |    |   |               |   |      |             |   |   | (2,541,192 | ) |
| $1,000,000      common stock purchase agreement dated February 10, 2009                                     |   |                             |    |   |               |   |      |             |   |   | (21,102 | ) |
| Total      derivative income (expense):                                                                     |   |                             |    |   |               |   |      |             |   | $ | 987,870 |   |

| · | The      market price of our common stock, which significantly affects the fair      value of our derivative financial instruments, experienced material price      fluctuations. To illustrate, the closing price of our common stock      decreased from $0.55 on July 10, 2008 to $0.20 on November 30, 2009. The      lower stock price on November 30, 2009 had the effect of significantly      decreasing the fair value of our derivative liabilities and, accordingly,      we were required to adjust the derivatives to these lower values with      charges to derivative income. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (d)   | Financial      Instruments (Cont’d) |
|-----------------|-------------------------------------------|

| ·   | In      connection with our accounting for the secured convertible note financing      we encountered the unusual circumstance of a day-one derivative loss      related to the recognition of derivative instruments arising from the      arrangement. That means that the fair value of the bifurcated compound      derivative and warrants exceeded the proceeds that we received from the      arrangement and we were required to record a loss to record the derivative      financial instruments at fair value. The loss that we recorded amounted to      $2,541,192. We did not enter into any other financing arrangements during      the periods reported that reflected day-one  loss. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our      financing arrangement giving rise to derivative financial instruments and      indexed shares: |   | Compound      EmbeddedDerivatives |       |   | WarrantDerivatives |   |       | TotalDerivatives |   |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|--------|--------------------|--------|------------|------------------|--------|
| $2,000,000      face value senior secured convertible note due July 10,    2010                         |   |                              | 10,000,000 |   |               |   | 7,142,858  |             |   |   | 17,142,858 |   |
| $1,000,000      common stock purchase agreement dated February 10, 2009                                 |   |                              | -          |   |               |   | 2,777,778  |             |   |   | 2,777,778 |   |
| $500,000      common stock purchase agreement dated October 2, 2009                                     |   |                              |       |   |               |   | 3,125,000  |             |   |   | 3,125,000 |   |
| $1,000,000      common stock purchase agreement dated October 16, 2009                                  |   |                              |       |   |               |   | 4,481,308  |             |   |   | 4,481,308 |   |
|                                                                                                    |   |                              | 10,000,000 |   |               |   | 17,526,944 |             |   |   | 27,526,944 |   |

| (e)   | Use      of Estimates in the preparation of the financial  statements |
|-----------------|-----------------------------------------------------------------------|

----

|                               |   | November      30, 2009 |      |
|------------------------------------|--------|------------------------|-----------|
|                               |   | Cost                   |      |   | AccumulatedAmortization |   |   | Net Book |   |
| Vehicles                           |   | $                      | 105,719   |   |   | $ | (58,846 | ) |   | $ | 46,873 |   |
| Machinery                          |   |                   | 765,025   |   |   |   | (330,518 | ) |   |   | 434,507 |   |
| Computer      and office equipment |   |                   | 291,926   |   |   |   | (121,741 | ) |   |   | 170,185 |   |
| Leasehold      improvements        |   |                   | 312,256   |   |   |   | (77,092 | ) |   |   | 235,164 |   |
|                               |   | $                      | 1,474,926 |   |   | $ | (588,197 | ) |   | $ | 886,729 |   |

| (a)   | On      April 24, 2006 CPTI entered a research and development agreement (the      “Agreement”) to fund all future costs for research, development,      patenting, licensing and marketing for an alternative hybrid fuel      technology that combines diesel and steam and gas (petrol) and steam      technologies for a 100% ownership of the technology and any associated      intellectual rights with two directors and officers of      CPTL-UK.  Under the terms of the Agreement, the Company agreed      to retain one director as the Company’s project director at a fee of      £3,000 (US$5,972) per month for a period of 36 months commencing May 2006      and the second director as the Company’s project manager at a fee of      £6,000 (US$11,945) per month for a period of 36 months commencing May      2006.  During March 2008 the monthly fee for the project manager      was increased to £10,000 (US$19,908).   On August 8, 2008      the project director and the project manager resigned as directors of      CPTL-UK. Concurrently, the project manager entered into a new employment      agreement (the “Employment Agreement”) with the Company for a term of four      (4) years.  Under the terms of the Employment Agreement, from      March 1, 2009 and on each subsequent anniversary during the term of the      Employment Agreement, the project manager is entitled to an annual salary      increase of 10%, as well as the following performance based      compensation: |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 500,000      shares of common stock when the Refrigeration Compact Heat Exchanger (the      “Refrigeration Unit”) for the grocery truck/trailer is successfully      tested; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 1,000,000      shares of common stock when the first Refrigeration Unit is commercially      sold; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·        ·  | 1,000,000      shares each time when the heat recovery system for the Marine application      or An Auxiliary Steam Engine for Trucks or similar engines based on the      Heat recovery and/or Steam technology is developed and commercially sold      to the first customer; 1,000,000      shares of common stock when the first automobile which is developed on the      heat recovery system is successfully tested and verified by the E.P.A;      and |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 1,000,000      shares of common stock when the first automobile heat recovery system is      commercially sold. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

----

| (b)   | On      July 26, 2006, CPTL-UK entered into a three-year lease agreement with an      officer of CPTL-UK to lease the office and laboratory premises. Upon      expiration of the lease the officer agreed to continue to provide month to      month use of the premises at a rate of £1,647.44 per month, plus certain      taxes, until such time as a long-term lease can be negotiated. During the      three months ended November 30, 2009, an expense of $10,341 (£6,321) was      charged as rent. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Pursuant      to an employment agreement dated May 22, 2008, between the Company and its      CEO, Mr. Abdul Mitha, Mr. Mitha invoiced the Company $150,000 with respect      to his monthly salary obligation for the three month period ended November      30, 2009. During the three month period Mr. Mitha didn’t receive any cash      payments from the Company, leaving $649,582 due and payable to Mr. Mitha      in salary obligations as at November 30,2009. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      July 23, 2009, the Company determined it had successfully achieved the      first benchmark in its development program whereby the Refrigeration      Compact Heat Exchanger (the “Refrigeration Unit”) for the grocery      truck/trailer was successfully tested.  Under the terms of Mr.      Mitha’s employment contract, he is entitled to be issued 200,000 shares to      be issued each time a formal test for an industry application is      successful.  As a result, an expense totalling $110,000 to stock      based compensation was recorded in the prior fiscal year, and the Company      issued a total of 200,000 shares of the Company’s common stock on      September 24, 2009. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (d)   | Commencing      July 2008, the Company has entered into various stock purchase and secured      financing agreements with the Quercus Trust, which entity became a related      party to the Company effective February 2009, upon completion of a further      stock purchase agreement. Mr. David Gelbaum, the trustee of the Quercus      Trust, was appointed to the Board of Directors of the Company effective      October 19, 2009. The Company's Board currently consists of four members,      two of which are currently affiliates of the Quercus      Trust.  Presently the Quercus trust owns a total of 8,302,469      shares of the Company’s common stock and has an option to acquire a      further 27,926,944 shares of the Company’s common stock at various prices,      under the terms of various stock purchase and secured financing      agreements. Refer to Notes 8 and 9 for additional details of all stock      purchase and financing agreements. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | The      Company entered into a collaboration agreement 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 the partner.  As consideration,      the Company was required to issue 4,000,000 common shares of the      Company. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 stock of the      Company.  Should the partner seek cash reimbursement then      the partner shall return a total of 3,000,000 shares of common stock to      the Company.  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 Stock to Doosan Babcock Energy Ltd. (“Doosan”) pursuant to the      terms and conditions of a subscription agreement, received 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. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (b)   | 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. $80,000), of which, the Company has      remitted a total of £35,000 (approximately U.S. $70,000).  The      agreement also provided for quarterly consulting fees of £12,000      (approximately U.S. $24,400). The Company renegotiated the quarterly      payments required under the contract effective April 1, 2008 whereby      quarterly fees were reduced to £3,000 per month for the period January to      March 2008, and thereafter to £2,000 per month for the remaining term of      the contract.  The Company terminated the contract on July 1,      2009.  During the three months ended November 30, 2009 the      Company has remitted a total of $3,895 in respect of the balance of fees      outstanding up to the date oftermination. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | On      July 28, 2008, the Company entered into an agreement with Mr. George      McLaine whereby Mr. McLaine agreed to serve as a consultant to assist the      Company with introductions to transportation companies in the Province of      Alberta, Canada, and abroad with a purpose of locating collaborative      partners to test the Company’s heat recovery systems in trucks and      trailers.  In consideration for this service, Mr. McLaine shall      receive 32,000 shares of the Company’s common stock for each introduction      that results in a collaboration agreement.  Further, Mr. McLaine      shall receive 25,000 shares of the Company’s common stock per annum for      serving as a consultant to the Company.  The contract is for a      period of two (2) years and may be renewed by mutual      consent.  Mr. McLaine is to also receive a 30% commission for      any advance purchase orders received on the advance deposit required of 1%      of the total purchase or $100 per unit ordered. 32,000 shares were issued      under the Company’s 2007 Stock Option and Stock Award Plan as of September      8, 2008.  On July 28, 2009 under the terms of the agreement, Mr.      McLaine reached his first service related benchmark and the Company      expensed a total of $13,750 to stock based compensation in respect of an      annual award of 25,000 shares of common stock.  The shares were      issued on September 24, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | On      June 1, 2008, the Company’s subsidiary CPTL-UK entered into an employment      contract with an IT specialist whereunder the employee will receive 25,000      shares of the Company’s common stock after the initial three (3) months,      and 25,000 shares of the Company’s common stock each year on the      anniversary of the completion of certain work projects up to a maximum of      100,000 shares.  25,000 shares were issued under the Company’s      2007 Stock Option and Award Plan as of September 8, 2008. As to the      remaining 75,000 shares of common stock available for issue under the      above-noted contract, due to the fact that they are service based awards,      the Company has recognized a stock-based compensation expense which is      being amortized over the period of service.  On June 30, 2009      the Company issued the second service related award of 25,000 common      shares and expensed an additional amount of $1,750 as stock based      compensation to record the discrepancy between the market value of the      common shares on the date of the original expense, and the market value of      the shares on the issuance date.  Refer to Note 9(ii) –      Restricted Stock Awards for additionaldetails. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | On      October 27, 2008 the Company’s subsidiary CPTL-UK entered into an      employment agreement with Marco Cucinotta whereby Mr. Cucinotta will      receive an annual salary of $146,475 (£90,000) as well as the following      performance based compensation: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 200,000      shares of the Company’s common stock on commencement of      employment; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | 100,000      shares of the Company’s common stock on completion of the first complete      system in test cell; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | 100,000      shares of the Company’s common stock on completion of the first truck      based system; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | 100,000      shares of the Company’s common stock on sale of the first system;      and |
|--------------------|-----------------------------------------------------------------------------------------------|

----

| ·   | 100,000      shares of the Company’s common stock upon establishing a UK consultancy      firm and generating £100,000 in grossrevenue. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      Company issued a total of 200,000 shares in respect of the above agreement      under its 2007 Stock Option and Award Plan as to 100,000 shares on January      9, 2009 and 100,000 shares on March 3, 2009, respectively.  On      July 23, 2009 the Company determined it had successfully achieved the      first benchmark in its development program whereby the Refrigeration      Compact Heat Exchanger (the “Refrigeration Unit”) for the grocery      truck/trailer was successfully tested.  As a result, under the      terms of Mr. Cucinotta’s employment agreement, whereby he is entitled to      receive 100,000 shares of the Company’s common stock on completion of the      first complete system in test cell, the Company reserved 100,000 shares of      the Company’s common stock and recorded an expense totalling $55,000 to      stock based compensation during the fourth quarter of the current fiscal      year.  The shares were issued on September 24,    2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Using      the guidance provided in ASC 718 the Company has not recorded compensation      cost in respect of the unearned performance-based awards as at November      30, 2009 due to the uncertainty surrounding realization of the benefit of      the awards. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   |  In      August 2008, the Company entered into a collaboration agreement with Voith      Turbo Gmbh& Co. KG (the “VTG”) to develop steam and heat energy      recovery engines for Clean Power's proprietary heat recovery technology      for refrigeration trailers for the grocery market. Under the terms of the      collaboration agreement, Clean Power and Voith Turbo GmbH & Co. KG      will analyse data from the testing of an existing refrigeration engine,      results from which will be used to build and test a new engine that      incorporates Clean Power's proprietary heat recovery technology. Voith is      a multi-national company with significant interest in the development of      expanders in engine and braking systems. As part of its own drive systems      and components development programme Voith Turbo GmbH & Co. KG has      already developed hybrid systems, waste recovery systems and expansion      engines based on the internal combustion engine which is used on the road,      on rail, on water and in other industries. Under the collaboration      agreement, the VTG invoiced the Company USD $255,398 (EUR 178,500). On      October 27, 2009, the Company paid off the invoiced  amount. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | During      the three month ended November 30, 2009 and prior, the Company’s      wholly-owned subsidiary CPTL-UK entered into various employment contracts      which call for a total of 5,150,000 shares of the Company’s common stock      to be issued as stock awards upon completion of certain technology      development benchmarks.  On July 23, 2009, the first of these      benchmarks was reached and the Company has recorded a stock based      compensation expense totalling $330,000 as it relates to the issuance of      600,000 common shares. Using the guidance provided in ASC 718 the Company      has not recorded compensation cost in respect of the remaining unearned      performance-based awards as at November 30, 2009.  The Company      has determined it is currently doubtful that employees will earn the right      to benefit from the remaining awards. Additionally, under the above noted      contracts the Company agreed to certain service based awards which shall      be earned annually.  In total the Company granted 500,000      service-based awards, in respect of which the Company has recognized a      stock-based compensation expense.  Refer to Note 9 (ii) –      Restricted Stock Awards for additionaldetails. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| (h)   | Effective      November 13, 2008 the Company entered into a five (5) year lease for      office and warehouse space in a property located in New Haven, East      Sussex, U.K., adjacent to its current leased facilities at an annual rate      of $24,771 (£15,000) payable quarterly commencing March      2009.  Concurrently the Company entered into an option to      purchase the aforementioned property, exercisable March through August      2010, for a purchase price the greater of (i) the price stated in an      Independent Valuation or (ii) £425,000 less any reductions previously      specified      and agreed in a former option agreement.  During the three      months ended November 30 2009, the Company paid total $6,135 (£3,750) plus      applicable taxes. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      lease payments for each of the five succeeding fiscal years are as      follows: |
|--------|-------------------------------------------------------------------------------------------|

| 2010                                             |   | $  18,578 |
|--------------------------------------------------|--------|---------------------|
| 2011                                             | 24,771 |
| 2012                                             | 24,771 |
| 2013                                             | 24,771 |
| 2014                                             | 4,129  |
|        Total: |   | $  97,020 |

| (i)   | On      November 18, 2008 CPTL–UK entered into a six month renewable lease      agreement for a corporate housing facility located in Surrey, United      Kingdom for use by the Company’s CEO, Abdul Mitha.  The lease      called for monthly rent in the amount of $2,034 (£1,250) plus applicable      taxes and expired May 17, 2009.  The lease was renewed      subsequent to the quarter for a term of 12 months, expiring in May,      2010.   During the three months ended November 30, 2009,      the Company paid total $6,135 (£3,750) plus applicable taxes and      utilities. The lease payments for each of the two succeeding fiscal years      are as follows: |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010   | $   12,386 |
|--------|---------------------------|
| Total: | $   12,386 |

| (j)   | Effective      February 1, 2009 the Company entered into a six (6) year lease for office      and warehouse space in a property located in New Haven, East Sussex, U.K.,      adjacent to its current leased facilities at an annual rate of $26,416      (£16,000) plus taxes and expenses, payable monthly in advance, commencing      January 30, 2009.  Concurrently the Company entered into an      option to purchase the aforementioned property during the period April 30,      2014 through January 29, 2015, for a purchase price of £230,000. During      the three months ended November 30, 2009, the Company paid total $6,544      (£3999.99) plus applicable taxes. The lease payments for each of the five      succeeding fiscal years are asfollows: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010                                             |             $        19,817 |
|--------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
| 2011                                             | 26,422                                                                                                                          |
| 2012                                             | 26,422                                                                                                                          |
| 2013                                             | 26,422                                                                                                                          |
| After      2013                                  | 37,432                                                                                                                          |
|        Total: | $       136,515                                                                              |

----

| (k)   | On      March 12, 2009 and May 5, 2009 the Company entered into two agreements      with Gersten Savage LLP, the Company’s attorneys, in connection with the      filing and prosecution of certain foreign patent applications with respect      to the Unitary Engine and Reservoir Engine Inventions as well as      additional refrigeration types; and, prosecution and filing of additional      United States applications for the Reefer Control System, In-line      Automotive Auxiliary Power System and Land-fill/Waste Heat Auxiliary Power      Generation System.  Under the terms of the retainer agreements,      the Company agreed to pay fixed fees asfollows: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $810,000      worth of the Company’s restricted common shares with a deemed value of      $0.375 per share. The Company issued a total of 2,160,000 shares in full      and final settlement of this provision and a total      of  $1,176,000, [$600,000 as to 1,200,000 common shares with a      market value of $0.50 on the date of the agreement, and $576,000 as to      960,000 common shares with a market value of $0.60 on the date of the      agreement], has been expensed in respect of the issuance of these shares      on the Company’s income statement during the fiscal year    2009; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $450,000      in cash payments due under the March 12, 2009 agreement and $240,000 in      cash payments due under the May 5, 2009 retainer agreement for a total of      $690,000 in cash payments, which amount is payable as follows: $35,000 and      $10,000, respectively, due  upon signing of the individual      retainer agreements; $15,000 per month commencing 120 days from March 12,      2009 and $7,500 per month commencing 120 days from May 5, 2009 until such      time as the balance of the required cash amounts are settled in      full.  During the three months ended November 30, 2009 the      Company paid $45,000 in full in respect of the two retainer      agreements; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | During      the three months ended November 30, 2009, the Company accrued totaling      $110,000 expense under the March 12, 2009 agreement and under the May 5,      2009 agreement. During the quarter, the Company didn’t make any cash      payments. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | During      the three months ended November 30, 2009, Gersten Savage LLP invoiced the      Company legal services fee related to general corporate matters for a      total of $65,444. Gersten Savage LLP received payments against its      outstanding fees totaling $85,000, leaving $94,871 due and payable to      Gersten Savage LLP as at November 30,2009. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Under      the terms of the retainer agreements the Company further agrees to grant      piggyback registration  and/or S-8 rights and shall include the      Designees’ shares of restricted common stock in its next registration      statement. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | On      June 29, 2009 the Company entered into a five (5) year lease for      additional office and warehouse space in a property located in New Haven,      East Sussex, U.K., adjacent to its current leased facilities at an annual      rate of $24,771 (£15,000) payable quarterly commencing June      2009.   Concurrently the Company entered into an option to      purchase the aforementioned property, exercisable June 2009 through      December 2010, for a purchase price the greater of (i) the price stated in      an Independent Valuation or (ii) £425,000 less any reductions previously      specified and agreed in a former option agreement.  During the      three months ended November 30 2009, the Company paid total $6,135      (£3,750) plus applicable taxes. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      lease payments for each of the five succeeding fiscal years are as      follows: |
|--------|-------------------------------------------------------------------------------------------|

| 2010                                             | $      | 18,578  |
|--------------------------------------------------|--------|---------|
| 2011                                             | 24,771 |
| 2012                                             | 24,771 |
| 2013                                             | 24,771 |
| 2014                                             | 20,643 |
|        Total: | $      | 113,534 |

| (m)   | On      July 17, 2009, the Company entered into a four months loan agreement (the      “Note”) with an unrelated third party for the amount $84,000. The loan had      an interest rate of 1% per month, payable in advance for the duration of      the Note and deducted from the proceeds of the Note on funding. The Note      was paid in full on November 10,2009. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                             |   | Carrying      Value |     |
|------------------------------------------------------------------------------------------------------------------|--------|---------------------|----------|
| 8%      face value $2,000,000 senior secured convertible note issued July 10, 2008      and due on July 10, 2010 |   | $                   | (430,885 | ) |

----

|                                |   | Compound      EmbeddedDerivatives |       |    | WarrantDerivative |   |       | TotalDerivatives |   |
|-------------------------------------|--------|-----------------------------------|------------|---------|-------------------|--------|------------|------------------|--------|
| Inception      date (July 10, 2008) |   | $                                 | (1,549,746 | )       |              | $      | (2,769,857 | )                |   | $ | (4,319,603 | ) |
| November      30, 2008              |   | $                                 | (992,902   | )       |              | $      | (2,335,813 | )                |   | $ | (3,328,715 | ) |
| November      30, 2009              |   | $                                 | (1,072,449 | )  |              | $      | (605,000   | )           |   | $ | (1,667,449 | )  |

|                                                                            |   | Compound      Embedded Derivative |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------|--------|
| $2,000,000      face value senior secured convertible note due July 10,    2010 |   |                              |   |
|   Conversion      price                                               |   | $                                 | 0.35   |   |
|   Volatility                                                          |   |                              | 78.96  | % |
|   Equivalent      term (years)                                        |   |                              | 1.82   |   |
|   Credit-risk      adjusted yield                                     |   |                              | 8.50   | % |
|   Interest-risk      adjusted rate                                    |   |                              | 9.48   | % |
|   Dividends                                                           |   |                              | -      |   |

----

|                                    |   | Class      A Warrant Derivative |   |   | Class      B Warrant Derivative |   |
|-----------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
| Warrants      to purchase common stock: |   |                            |   |   |                            |   |
|   Strike      price           |   | $                               | 0.60   |   |                            | $      | 0.80 |   |
|   Volatility                  |   |                            | 98.83  | %      |                            |   | 98.83 | % |
|   Term      (years)           |   |                            | 5.00   |   |                            |   | 5.00 |   |
|   Risk-free      rate         |   |                            | 3.10   | %      |                            |   | 3.10 | % |
|   Dividends                   |   |                            | -      |   |                            |   | - |   |

| Compound      Embedded Derivative                                                |   | November      30, 2009 |   |   | August      31, 2009 |   |
|----------------------------------------------------------------------------------|--------|------------------------|--------|--------|----------------------|--------|
| $2,000,000      face value senior secured convertible note due July 10,    2010: |   |                   |   |   |                 |   |
|   Conversion      price (1)                                            |   | $                      | 0.20   |   |                 | $      | 0.35 |   |
|   Volatility                                                           |   |                   | 200.13 | %      |                 |   | 63.88 | % |
|   Equivalent      term (years)                                         |   |                   | 0.60   |   |                 |   | 0.855 |   |
|   Credit-risk      adjusted yield                                      |   |                   | 7.95   | %      |                 |   | 9.28 | % |
|   Interest-risk      adjusted rate                                     |   |                   | 8.00   | %      |                 |   | 7.14 | % |
|   Dividends                                                            |   |                   | -      |   |                 |   | - |   |

|                                    |   | November      30, 2009        |   |   | August      31, 2009           |   |
|-----------------------------------------|--------|-------------------------------|--------|--------|--------------------------------|--------|
|                                    |   | Class      AWarrantDerivative |   |   | Class      B WarrantDerivative |   |   | Class      AWarrantDerivative |   |   | Class      B WarrantDerivative |   |
| Warrants      to purchase common stock: |   |                          |   |   |                           |   |   |   |   |   |   |   |
|   Strike      price      (1)  |   | $                             | 0.35   |   |                           | $      | 0.35 |   |   | $ | 0.45 |   |   | $ | 0.45 |   |
|   Volatility                  |   |                          | 98.45  | %      |                           |   | 98.45 | % |   |   | 88.39 | % |   |   | 88.39 | % |
|   Term      (years)           |   |                          | 3.61   |   |                           |   | 3.61 |   |   |   | 3.86 |   |   |   | 3.86 |   |
|   Risk-free      rate         |   |                          | 2.01   | %      |                           |   | 2.01 | % |   |   | 2.39 | % |   |   | 2.39 | % |
|   Dividends                   |   |                          | --     |   |                           |   | -- |   |   |   | -- |   |   |   | -- |   |

----

| Classification                         |   | Allocation |      |
|----------------------------------------|--------|------------|-----------|
| Day-one      derivative loss           |   | $          | (21,103   | ) |
| Common      Stock (par value)          |   |       | 2,222     |   |
| Paid-in      Capital (Common Stock)    |   |       | 274,641   |   |
| Derivative      Liabilities (Warrants) |   |       | 744,240   |   |
| Proceeds                               |   | $          | 1,000,000 |   |

|                                    |   | November      30, 2009         |   |   | August      31, 2009           |   |
|-----------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                    |   | Series      AWarrantDerivative |   |   | Series      BWarrantDerivative |   |   | Series      AWarrantDerivative |   |   | Series      BWarrantDerivative |   |
| Warrants      to purchase common stock: |   |                           |   |   |                           |   |   |   |   |   |   |   |
|   Strike      price           |   | $                              | 0.45   |   |                           | $      | 0.45 |   |   | $ | 0.60 |   |   | $ | 0.85 |   |
|   Volatility                  |   |                           | 185.73 | %      |                           |   | 185.73 | % |   |   | 38.45 | % |   |   | 38.45 | % |
|   Term      (years)           |   |                           | 0.20   |   |                           |   | 0.20 |   |   |   | 0.45 |   |   |   | 0.45 |   |
|   Risk-free      rate         |   |                           | 0.06   | %      |                           |   | 0.06 | % |   |   | 0.24 | % |   |   | 0.24 | % |
|   Dividends                   |   |                           | --     |   |                           |   | -- |   |   |   | -- |   |   |   | -- |   |

----

| Classification                         |   | October      2, 2009 Allocation |    |   | October      16, 2009 Allocation |   |
|----------------------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|
| Common      Stock (par value)          |   | $                               | 229     |   |                             | $      | 1,338 |   |
| Paid-in      Capital (Common Stock)    |   |                            | 229,208 |   |                             |   | 1,336,439 |   |
| Derivative      Liabilities (Warrants) |   |                            | 270,563 |   |                             |   | 162,223 |   |
| Proceeds                               |   | $                               | 500,000 |   |                             | $      | 1,500,000 |   |

|                                    |   | October      2 ,2009 |      |   | November      30, 2009 |   |
|-----------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
| Warrants      to purchase common stock: |   |                 |      |   |                   |   |   |   |   |   |   |   |
|   Common      shares indexed  |   |                 | 1,875,000 |   |                   |   | 1,250,000 |   |   |   | 1,875,000 |   |   |   | 1,250,000 |   |
|   Strike      price           |   | $                    | 0.27      |   |                   | $      | 0.38 |   |   | $ | 0.27 |   |   | $ | 0.38 |   |
|   Volatility                  |   |                 | 108.06    | %      |                   |   | 108.06 | % |   |   | 135.11 | % |   |   | 135.11 | % |
|   Term      (years)           |   |                 | 1.00      |   |                   |   | 0.84 |   |   |   | 1.00 |   |   |   | 0.84 |   |
|   Risk-free      rate         |   |                 | 0.37      | %      |                   |   | 0.37 | % |   |   | 0.27 | % |   |   | 0.27 | % |
|   Dividends                   |   |                 | --        |   |                   |   | -- |   |   |   | -- |   |   |   | -- |   |

----

|                                       |   | October      16 ,2009 |      |
|--------------------------------------------|--------|-----------------------|-----------|
| Warrants      to purchase common stock:    |   |                  |      |   |   |   |   |   |   |   |   |   |
|   Common      shares indexed     |   |                  | 1,857,852 |   |   |   | 833,333 |   |   |   | 1,234,568 |   |   |   | 555,555 |   |
|   Adjusted      strike price (a) |   | $                     | 0.45      |   |   | $ | 0.45 |   |   | $ | 0.45 |   |   | $ | 0.45 |   |
|   Volatility                     |   |                  | 123.54    | % |   |   | 123.54 | % |   |   | 123.54 | % |   |   | 123.54 | % |
|   Term      (years)              |   |                  | 1.00      |   |   |   | 1.00 |   |   |   | 1.00 |   |   |   | 1.00 |   |
|   Risk-free      rate            |   |                  | 0.36      | % |   |   | 0.36 | % |   |   | 0.36 | % |   |   | 0.36 | % |
|   Dividends                      |   |                  | --        |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |

|                                       |   | November      30 ,2009 |      |
|--------------------------------------------|--------|------------------------|-----------|
| Warrants      to purchase common stock:    |   |                   |      |   |   |   |   |   |   |   |   |   |
|   Common      shares indexed     |   |                   | 1,857,852 |   |   |   | 833,333 |   |   |   | 1,234,568 |   |   |   | 555,555 |   |
|   Adjusted      strike price (a) |   | $                      | 0.45      |   |   | $ | 0.45 |   |   | $ | 0.45 |   |   | $ | 0.45 |   |
|   Volatility                     |   |                   | 132.04    | % |   |   | 132.04 | % |   |   | 132.04 | % |   |   | 132.04 | % |
|   Term      (years)              |   |                   | .88       |   |   |   | .88 |   |   |   | .88 |   |   |   | .88 |   |
|   Risk-free      rate            |   |                   | 0.27      | % |   |   | 0.27 | % |   |   | 0.27 | % |   |   | 0.27 | % |
|   Dividends                      |   |                   | --        |   |   |   | -- |   |   |   |   |   |   |   |   |   |

|                                                                                                                  |   | Fair      Value Measurements Using             |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|
|                                                                                                                  |   | Significant      Unobservable Inputs (Level 3) |       |
|                                                                                                                  |   | CompoundEmbeddedDerivative                     |       |   | Warrant      Derivative |   |   | Total |   |
| Beginning      balance, August 31, 2009                                                                               |   | $                                              | (779,193   | ) |   | $ | (1,667,173 | ) |   | $ | (2,446,366 | ) |
|   Total      (gains) or losses included in earnings                                                         |   |                                           | (293,256   | ) |   |   | 1,225,944 |   |   |   | 932,688 |   |
|  Issuances:                                                                                                      |   |                                           |       |   |   |   |   |   |   |   |   |   |
|   Warrants      issued in  conjunction with October 2, 2009 common stock      purchase agreement  |   |                                           |       |   |   |   | (270,563 | ) |   |   | (270,563 | ) |
|   Warrants      issued in conjunction with  October 16, 2009 common stock      purchase agreement |   |                                           |       |   |   |   | (162,223 | ) |   |   | (162,223 | ) |
| Ending      balance, November 30, 2009                                                                                |   | $                                              | (1,072,449 | ) |   | $ | ( 874,015 | ) |   | $ | (1,946,464 | ) |

----

| (a)   | During      the three months ended November 30, 2009, the Company issued shares of      common stock as follows: |
|-----------------|------------------------------------------------------------------------------------------------------------------|

| (i)   | 300,000      shares to employees and consultant as compensation for services      rendered. |
|-----------------|---------------------------------------------------------------------------------------------|

| (ii)   | 15,000      shares to employees under a Stock Option and Award Plan as compensation      for services rendered. |
|------------------|-----------------------------------------------------------------------------------------------------------------|

| (iii)   | 825,000      shares, which had been previously reserved for issuance, as described      above in Note 6 (a) & (c) and Note 7 (c) & (e) to the consolidated      notes to the financial statements, |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | 6,080,247      shares in respect of a common stock purchase agreement. Refer to Note 9 –      Stock Purchase Agreement, above. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Stock-based      compensation: |
|-----------------|--------------------------------|

| (i)   | Executive stock      options |
|-----------------|------------------------------|

|   |   |
|--------|--------|

| Date             |   | Number      of options |      | Expiry      date |
|------------------|--------|------------------------|-----------|------------------|
| May      1, 2009 |   |                   | 1,000,000 |             | April      30, 2014 |
| May      1, 2010 |   |                   | 1,000,000 |             | April      30, 2015 |
| May      1, 2011 |   |                   | 1,000,000 |             | April      30, 2016 |
| May      1, 2012 |   |                   | 1,000,000 |             | April      30, 2017 |
| May      1, 2013 |   |                   | 1,000,000 |             | April      30, 2018 |
| May      1, 2014 |   |                   | 1,000,000 |             | April      30, 2019 |
|             |   |                   | 6,000,000 |             |   |

----

| (b)   | Stock-based      compensation (continued): |
|-----------------|--------------------------------------------|

| Stock      Price (Issue      date) |   |   | Exercise      price |   |   | Risk      Free interest rate |   | Date      of issue | Expiration      date |   | Term      (years) |     |   | Volatility |   |   | Value  |   |
|------------------------------------|--------|--------|---------------------|--------|--------|------------------------------|--------|--------------------|----------------------|--------|-------------------|----------|--------|------------|--------|--------|--------|--------|
| $                                  | 0.55   |   |                | $      | 0.548  |                         |   |               | 2.34                 | %      | 5/1/2008          | 5/1/2014 |   |       | 2.4260 |   |   |   | 82.83 | % |   | $ | 0.27 |   |
| $                                  | 0.20   |   |                | $      | 0.365  |                         |   |               | 2.01                 | %      | 5/1/2008          | 5/1/2015 |   |       | 2.6726 |   |   |   | 100.10 | % |   | $ | 0.09 |   |
| $                                  | 0.20   |   |                | $      | 0.365  |                         |   |               | 2.01                 | %      | 5/1/2008          | 5/1/2016 |   |       | 3.1571 |   |   |   | 100.10 | % |   | $ | 0.10 |   |
| $                                  | 0.20   |   |                | $      | 0.365  |                         |   |               | 2.01                 | %      | 5/1/2008          | 5/1/2017 |   |       | 3.6589 |   |   |   | 100.10 | % |   | $ | 0.11 |   |
| $                                  | 0.20   |   |                | $      | 0.365  |                         |   |               | 2.01                 | %      | 5/1/2008          | 5/1/2018 |   |       | 4.1521 |   |   |   | 100.10 | % |   | $ | 0.12 |   |
| $                                  | 0.20   |   |                | $      | 0.365  |                         |   |               | 2.01                 | %      | 5/1/2008          | 5/1/2019 |   |       | 4.6452 |   |   |   | 100.10 | % |   | $ | 0.13 |   |

| OptionGrant      date |   | Option      Qty |      |   | Fair      Market Value as at November 30, 2009 ($) |   |    | Amortization      Term (months) |   |   | Amortized      value as at November 30, 2009 ($) |   |
|-----------------------|--------|-----------------|-----------|--------|----------------------------------------------------|--------|---------|---------------------------------|--------|--------|--------------------------------------------------|--------|
| May      1, 2009      |   |            | 1,000,000 |   |                                               |   | 273,038 |                            |   |   | 12                                               |   |   |   | 273,038 |   |
| May      1, 2010      |   |            | 1,000,000 |   |                                               |   | 94,027  |                            |   |   | 24                                               |   |   |   | 74,438 |   |
| May      1, 2011      |   |            | 1,000,000 |   |                                               |   | 104,237 |                            |   |   | 36                                               |   |   |   | 55,014 |   |
| May      1, 2012      |   |            | 1,000,000 |   |                                               |   | 113,487 |                            |   |   | 48                                               |   |   |   | 44,922 |   |
| May      1, 2013      |   |            | 1,000,000 |   |                                               |   | 121,493 |                            |   |   | 60                                               |   |   |   | 38,473 |   |
| May      1, 2104      |   |            | 1,000,000 |   |                                               |   | 128,599 |                            |   |   | 72                                               |   |   |   | 33,935 |   |
|                  |   |            | 6,000,000 |   |                                               |   | 834,881 |                            |   |   |                                             |   |   |   | 519,820 |   |

| (ii)   | Restricted stock      awards |
|------------------|------------------------------|

----

| (b)   | Stock-based      compensation (continued): |
|-----------------|--------------------------------------------|

|                                    |   | Number |    |   | Weighted      AverageGrant      Date Fair Value |   |
|-----------------------------------------|--------|--------|---------|--------|-------------------------------------------------|--------|
|                                    |   |   |    |   |                                            |   |
| Unvested,      at August 31, 2009       |   |   | 200,000 |   |                                            | $      | 0.53 |   |
| Granted                                 |   |   | 50,000  |   |                                            | $      | 0.45 |   |
| Vested                                  |   |   | 15,000  |   |                                            |   |   |   |
| Forfeited                               |   |   | -       |   |                                            |   |   |   |
| Unvested,      end of November 30, 2009 |   |   | 235,000 |   |                                            | $      | 0.51 |   |

----

|                                                                  |   | Number |       |   | Weighted      AverageExercise      Price |   |
|-----------------------------------------------------------------------|--------|--------|------------|--------|------------------------------------------|--------|
| Warrants      outstanding, August 31, 2009                            |   |   | 10,714,286 |   |                                     | $      | 0.70 |   |
| Changes      during the three month period ended November 30, 2009    |   |   |       |   |                                     |   |   |   |
|           Granted   |   |   | 7,606,308  |   |                                     | $      | 0.51 |   |
|           Exercised |   |   | -          |   |                                     |   | - |   |
|           Expired   |   |   | -          |   |                                     |   | - |   |
| Warrants      outstanding, November 30, 2009                          |   |   | 18,320,594 |   |                                     | $      | 0.62 |   |

| Year |   | Number      of Shares |       |
|------|--------|-----------------------|------------|
| 2010 |   |                  | 10,606,308 |   |
| 2013 |   |                  | 7,714,286  |   |

----

----

----

----

----

| Name      & Address                                                                                                  | Number      of Shares Issued        | Reason      for Issuance                              |
|--------------------------------------------------------------------------------------------------------------------------|-------------------------------------|-------------------------------------------------------|
| Marco      Cucinotta127      Broomfield AvenueWorthingSussex,      EnglandBN14      7SF                             | 200,000      shares of common stock | Stock      Award pursuant to a consulting agreement.  |
| Abdul      Mitha32      Hawkwood Place NWCalgary,      Alberta T3G 1X6Canada                                        | 200,000      shares of common stock | Stock      Award pursuant to an employment agreement. |
| Michael      Roberts2      Almond CloseGuilford,      Surrey GUI 1NN                                                | 100,000      shares of common stock | Stock      Award pursuant to a consulting agreement.  |
| Michael      BurnsDunedin,      16, Corsica Road,Seaford,      East Sussex, BN25 1BD,      UK.                 | 500,000      shares of common stock | Stock      award pursuant to an employment agreement  |
| James      MasonUnit      7W E-Plan      Industrial EstateNew      Road, NewhavenEast      Sussex, UK BN9 0EX  | 100,000      shares of common stock | Stock      award pursuant to a consultingagreement    |

----

| Gareth      StoroszkoUnit      7W E-Plan      Industrial EstateNew      Road, NewhavenEast      Sussex, UK  BN9 0EX  | 15,000      shares of common stock | Stock      award pursuant to a consulting agreement |
|------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|-----------------------------------------------------|
| George      McLaine10723      Maplebend Dr SECalgary,      AB T2J 1X3                                                                    | 25,000      shares of common stock | Stock      award pursuant to a consultingagreement  |

| EXHIBIT      NO. | IDENTIFICATION      OF EXHIBIT                                  |                                                                                                                                                  |
|------------------|-----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1              | Articles      of Incorporation                                  | Incorporated      by reference to our SB-2 registration statement filed  with the      Securities and Exchange Commission on March 15, 2004 |
| 3.1      (i)     | Amendment      to Articles of Incorporation dated June 12, 2006 | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 21, 2006                                |
| 3.1(ii)          | Amendment      to Articles of Incorporation dated June 13, 2006 | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 21, 2006                                |

----

| 3.2              | Bylaws                                                                                                                                                                                            | Incorporated      by reference to our SB-2 registration statement filed with the Securities      and Exchange Commission on March 15, 2004      |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2(i)           | Amended      and Restated Bylaws                                                                                                                                                             | Incorporated      by reference to our Form 10-QSB filed with the Securities and Exchange      Commission on January 22, 2007                    |
| 10.1             | Agreement      and Plan of Merger between the Company, Clean Energy and Power Solutions      Inc. and the shareholders of Clean Power Technologies Inc.      executedon      May 22, 2006.        | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 21, 2006                     |
| 10.2             | Memorandum      of Understanding between the Company and Mitsui Babcock Energy Limited      dated September 11, 2006                                                                              | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on September 12, 2006                     |
| 10.3             | Collaboration      Agreement between the Company and Mitsui Babcock Limited dated October 11,      2006                                                                                           | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 19, 2006                       |
| 10.4             |  2007      Stock Option and Stock Award Plan approved by the Board of Directors and      the Shareholders                                                                                    | Incorporated      by reference to our Form SB-2 registration statement filed with the      Securities and Exchange Commission on March 23, 2007 |
| 10.5   | 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 with the Securities and Exchange      Commission on June 20, 2007                          |
| 10.6             | 2008  Stock      Option and Stock Award Plan approved by the Board of Directors and the      Shareholders                                                                               | Incorporated      by reference to our Definitive 14-C filed with the Securities and Exchange      Commission on April 17, 2008                  |
| 10.7             | Employment      Agreement between Abdul Mitha and the Company effective May 1, 2008,      approved by the Board of Directors on May 22, 2008.                                                     | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on May 28, 2008                           |
| 10.8             | Stock      Purchase Agreement dated July 10, 2008, by and between the Company and The      Quercus Trust                                                                                          | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 16, 2008                          |
| 10.9             | Promissory      Note issued by  the Company to The Quercus Trust                                                                                                                   | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 16, 2008                          |
| 10.10            | Registration      Rights Agreement by and between the Company and The Quercus      Trust                                                                                                     | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 16, 2008                          |
| 10.11            | Pledge      Agreement by and between the Company and The Quercus Trust                                                                                                                       | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 16, 2008                          |
| 10.12            | Class      A Warrant issued by the Company to the Quercus Trust pursuant to the Stock      Purchase Agreement dated July 10, 2008                                                            | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on July 16, 2008                          |
| 10.13            | Class      B Warrant issued by the Company to the Quercus Trust pursuant to the Stock      Purchase Agreement dated July 10, 2008                                                                 | Incorporated      by reference to our Form 8-K filed  with the Securities and      Exchange Commission on July 16,2008                |

----

| 10.14       | Cooperation      Agreement between the Company and Voith Turbo GmbH & Co., KG dated      August 5, 2008                                                    | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on August 8, 2008               |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| 10.15       | Memorandum      of Understanding between the Company and Farm Fresh Marketing Inc. dated      December 12, 2008                                                | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on December 16, 2008            |
| 10.16       | Lease      Agreement between Quentin King and Clean Power Technologies Limited      effective November 13, 2008                                                | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on April 10, 2009.             |
| 10.17       | Option      Agreement between Quentin King  and Clean Power Technologies      Limited effective November 13, 2008                                    | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on April 10, 2009.             |
| 10.18       | Lease      Agreement between Mr. Andrew Leaver and Mrs. Hilary Leaver  and      Clean Power Technologies Limited effective November 18,    2008      | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on April 10, 2009.        |
| 10.19       | Stock      Purchase Agreement dated February 10, 2009, by and between the Company and      The Quercus Trust                                                   | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on February 13, 2009            |
| 10.20       | Form      of Registration Rights Agreement dated February 10, 2009, by and between      the Company and The Quercus Trust                                      | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on February 13, 2009            |
| 10.21       | Form      of Warrant issued by the Company to the Quercus Trust pursuant to the      Stock Purchase Agreement dated February 10, 2009                          | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on February 13, 2009            |
| 10.22       | Form      of Warrant issued by the Company to the Quecus Trust pursuant to the Stock      Purchase Agreement dated February 10, 2009                           | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on February 13, 2009            |
| 10.23       | Binding      Letter of Intent between the Company and  the University of      Sussex dated March 13, 2009                                            | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on April 10, 2009.             |
| 10.24       | Assignment      of Patent between the Company and the University of Sussex, Richard      Stobart and Mudalige Weerasinghe dated  March 13,      2009 | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on April 10, 2009.        |
| 10.25       | 2009      Stock Option and Stock Award Plan approved by the Board of Directors and      the Shareholders                                                       | Incorporated      by reference to our Definitive 14-C filed with the Securities and Exchange      Commission on May 19, 2008          |
| 10.26       | Amendment      to the Articles of Incorporation and Bylaws of theCompany.                                                                                      | Incorporated      by reference to our Definitive Schedule 14C filed with the Securities and      Exchange Commission on June 8, 2009. |
| 10.27       | Option      Agreement between Quentin King and Clean Power Technologies Limited      effective June 29, 2009                                                   | Incorporated      by reference to our Form 10-Q filed with the Securities and Exchange      Commission on July 13, 2009.              |
|  10.28 |  Lease      Agreement between Quentin King and Clean Power Technologies Limited      effective June 29, 2009                                              |         Incorporated by reference to our Form 10-Q filed with the Securities and      Exchange Commission on July 13, 2009. |
|  10.29 |  Memorandum      of Understanding between NewEnco, Renewable Power Systems and the Company      dated September 3, 2009.                                  |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on September 9,2009.      |

----

|  10.30 |  Form      of Amended and Restated Stock Purchase Agreement dated October 2, 2009      between the Company and The Quercus Trust.                                              |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 7, 2009.  |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|
|  10.31 |  Form      of Registration Rights Agreement between the Company and The Quercus Trust      dated October 2, 2009.                                                              |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 7, 2009.  |
|  10.32 |  Form      of $0.27 Warrant issued by the Company to the Quecus Trust pursuant to the      Amended and Restated Stock Purchase Agreement dated October 2,      2009.           |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 7, 2009.  |
|  10.33 |  Form      of $0.38 Warrant issued by the Company to the Quecus Trust pursuant to the      Amended and Restated Stock Purchase Agreement dated October 2,      2009.           |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 7, 2009.  |
|  10.34 |  Amendment      No.1 to  Amended and Restated Stock Purchase Agreement dated      October 16, 2009 between the Company and The QuercusTrust.                         |  Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009. |
| 10.35       | Form      of Registration Rights Agreement dated October 16, 2009 between the      Company and The Quercus Trust.                                                              | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009        |
| 10.36       | Form      of $0.54 Warrant issued by the Company to the Quecus Trust pursuant to      Amendment No. 1 to Amended and Restated Stock Purchase Agreement dated      October 16, 2009. | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009        |
| 10.37       | Form      of $0.60 Warrant issued by the Company to the Quecus Trust pursuant to      Amendment No. 1 to Amended and Restated Stock Purchase Agreement dated      October 16, 2009. | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009        |
| 10.38       | Form      of $0.77 Warrant issued by the Company to the Quecus Trust pursuant to      Amendment No. 1 to Amended and Restated Stock Purchase Agreement dated      October 16, 2009. | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009        |
| 10.39       | Form      of $0.85 Warrant issued by the Company to the Quecus Trust pursuant to      Amendment No. 1 to Amended and Restated Stock Purchase Agreement dated      October 16, 2009. | Incorporated      by reference to our Form 8-K filed with the Securities and Exchange      Commission on October 20, 2009        |
| 22.1        | Notice      of majority shareholder approval to increase authorized capital and      establish two series of preferred shares.                                                      | Incorporated      by reference to our Definitive Schedule 14C filed on July 2,      2008.                                        |
| 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                                                                                                              |

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|   |                  |                               |
|--------|-----------------------|------------------------------------|
|   |                  | CLEAN      POWER TECHNOLOGIES INC. |
|   |                  |                               |   |
| Date:  | January      13, 2010 | By:                                | /s/      Abdul Mitha |
|   |                  | Name:                              | Abdul      Mitha |
|   |                  | Title:                             | President,      Principal Executive Officer |

| Date:  | January      13, 2010 | By:    | /s/      Diane Glatfelter                             |
|--------|-----------------------|--------|-------------------------------------------------------|
|   |                  | Name:  | Diane      Glatfelter                                 |
|   |                  | Title: | Secretary,      Treasurer, Principal FinancialOfficer |

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