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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2008

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

COMMISSION FILE NUMBER000-50930

CLYVIA INC.(Exact
name of registrant as specified in its charter)

|NEVADA                                                               | 98-0415276                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|1480 Gulf Road, #204                                                 |                                     
|Point Roberts, WA                                                    | 98281                               
|(Address of principal executive offices)                             | (Zip code)                          

(360) 306-1133(Registrant's telephone number,
including area code)

Not Applicable(Former name, former
address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
[X]No [   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated
filer,accelerated filer and smaller reporting company in Rule 12b-2 of
the Exchange Act.

|Large accelerated filer [   ] |                                               | Accelerated
      filer                     
      [   ]
|----------------------------- | --------------------------------------------- | --------------------------------------------------------
|Non-accelerated filer   [   ] | (Do not check if a smaller reporting company) | Smaller reporting company [X]                           

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ 
 ]   No [X]

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As
of September 16, 2008, the Registrant had 102,351,779 shares of common stock
issued and outstanding.

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PART I - FINANCIAL INFORMATION

ITEM
1.              
FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the six months ended July 31, 2008 are
not necessarily indicative of the results that can be expected for the year
ending January 31, 2009.

2

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CLYVIA INC.

(A Development Stage Company)





CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)



July 31, 2008 
  (Unaudited)

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CLYVIA INC.(A Development Stage
  Company)CONSOLIDATED BALANCE SHEETS(Expressed in U.S. Dollars)

|                                                                               |   | July 31,    |   |   | January 31, |  
|------------------------------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                                               |   | 2008        |   |   | 2008        |  
|                                                                               |   | (unaudited) |   |   | (audited)   |  
|                                                                               |   |             |   |   |             |  
|ASSETS                                                                         |   |             |   |   |             |  
|                                                                               |   |             |   |   |             |  
|Current Assets                                                                 |   |             |   |   |             |  
|Other receivables                                                              | $ | 29,991      |   | $ | 50,953      |  
|Other receivables
      related parties (Note 7)                              |   | 7,229       |   |   | 7,738       |  
|Prepaid expenses                                                               |   | 6,580       |   |   | 10,360      |  
|Deferred tax asset, less valuation
      allowance $250,858 (2008 -$1,434,045) |   | -           |   |   | -           |  
|Total Current Assets                                                           |   | 43,800      |   |   | 69,051      |  
|                                                                               |   |             |   |   |             |  
|Property, plant and equipment (Note 4)                                         |   | 3,497,991   |   |   | 3,452,418   |  
|                                                                               |   |             |   |   |             |  
|Total
      Assets                                                             | $ | 3,541,791   |   | $ | 3,521,469   |  
|                                                                               |   |             |   |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                           |   |             |   |   |             |  
|                                                                               |   |             |   |   |             |  
|Current Liabilities                                                            |   |             |   |   |             |  
|Bank indebtedness (Note
      5)                                               | $ | 55,696      |   | $ | 48,077      |  
|Accounts payable and accrued
      liabilities                                 |   | 345,678     |   |   | 534,271     |  
|Accounts payable and
      accrued liabilities related parties (Note 7)       |   | 307,716     |   |   | 230,158     |  
|Deposit unearned income                                                       |   | 23,372      |   |   | 66,519      |  
|Loans payable (Note 6)                                                         |   | 520,041     |   |   | 1,037,122   |  
|Loans payable related parties (Note 7)                                        |   | 1,356,993   |   |   | 41,635      |  
|                                                                               |   |             |   |   |             |  
|Total Current
      Liabilities                                                |   | 2,609,496   |   |   | 1,957,782   |  
|                                                                               |   |             |   |   |             |  
|Commitments (Note 11)                                                          |   |             |   |   |             |  
|                                                                               |   |             |   |   |             |  
|Stockholders Equity                                                           |   |             |   |   |             |  
|Common stock (Note 8)                                                          |   |             |   |   |             |  
|Authorized                                                                     |   |             |   |   |             |  
|525,000,000 common shares, par value $0.001                                    |   |             |   |   |             |  
|Issued and outstanding                                                         |   |             |   |   |             |  
|July 31, 2008 -102,351,779 common shares                                       |   |             |   |   |             |  
|January 31, 2008 -102,351,779 common shares                                    |   | 102,352     |   |   | 102,352     |  
|Additional paid-in
      capital                                               |   | 14,231,239  |   |   | 14,231,239  |  
|Accumulated other comprehensive income:                                        |   |             |   |   |             |  
|Foreign currency translation adjustment                                        |   | 873,941     |   |   | 767,515     |  
|Deficit accumulated during the development stage                               |   | (14,275,237 | ) |   | (13,537,419 | )
|                                                                               |   |             |   |   |             |  
|Total
      Stockholders Equity                                               |   | 932,295     |   |   | 1,563,687   |  
|                                                                               |   |             |   |   |             |  
|Total
      Liabilities and Stockholders Equity                               | $ | 3,541,791   |   | $ | 3,521,469   |  

The accompanying notes are an integral part of these
  consolidated financial statements.

F-2

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CLYVIA INC.(A Development Stage
  Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in U.S. Dollars)
  (Unaudited)

CumulativeAmounts
      
      
      Six
      
      
      Six
      
      
      Three
      
      
      ThreeFrom Inception
      
      
      Months
      
      
      Months
      
      
      Months
      
      
      Months(December 21,
      
      
      Ended
      
      
      Ended
      
      
      Ended
      
      
      Ended2004) to July 31,
      
      
      July 31,
      
      
      July 31,
      
      
      July 31,
      
      
      July 31,2008
      
      
      2008
      
      
      2007
      
      
      2008
      
      
      2007EXPENSESAmortization
      $
      425,895
      
      $
      157,688
      
      $
      81,098
      
      $
      81,678
      
      $
      67,174Management fees
      
      752,398
      
      
      118,033
      
      
      137,121
      
      
      56,109
      
      
      69,646Professional fees
      
      1,231,536
      
      
      181,671
      
      
      232,021
      
      
      126,008
      
      
      165,645Other operating expenses
      
      1,554,477
      
      
      224,967
      
      
      295,839
      
      
      111,506
      
      
      130,437Stock-based compensation
      
      9,963,954
      
      
      -
      
      
      577,156
      
      
      -
      
      
      577,156Foreign currency loss (recovery)
      
      263,661
      
      
      (1,906
      )
      
      950
      
      
      (9,684
      )
      
      56LOSS BEFORE OTHER ITEMSAND INCOME TAXES
      
      (14,191,921
      )
      
      (680,453
      )
      
      (1,324,185
      )
      
      (365,617
      )
      
      (1,010,114
      )OTHER ITEMSInterest expense
      
      (197,764
      )
      
      (106,020
      )
      
      (14,951
      )
      
      (58,779
      )
      
      (11,245
      )Interest
        income
      
      24,245
      
      
      504
      
      
      1,309
      
      
      257
      
      
      380Income from processing
        waste
      
      66,416
      
      
      48,151
      
      
      13,136
      
      
      668
      
      
      2,845Miscellaneous income
      
      23,787
      
      
      -
      
      
      13,267
      
      
      -
      
      
      -LOSS BEFORE INCOME
        TAXES
      
      (14,275,237
      )
      
      (737,818
      )
      
      (1,311,424
      )
      
      (423,471
      )
      
      (1,018,134
      )Provision for income taxes
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -NET LOSS
      
      (14,275,237
      )
      
      (737,818
      )
      
      (1,311,424
      )
      
      (423,471
      )
      
      (1,018,134
      )OTHER COMPREHENSIVE INCOME
        (LOSS)Foreign currency translation adjustment
      
      873,941
      
      
      106,426
      
      
      146,119
      
      
      (20,931
      )
      
      (1,508
      )COMPREHENSIVE LOSS
      $
      (13,401,296
      )
      $
      (631,392
      )
      $
      (1,165,305
      )
      $
      (444,402
      )
      $
      (1,019,642
      )BASIC AND DILUTED NET LOSS PER SHARE
      
      
      
      $
      (0.01
      )
      $
      (0.01
      )
      $
      (0.00
      )
      $
      (0.01
      )WEIGHTED AVERAGE NUMBER OF
        COMMONSHARES OUTSTANDING
      
      
      
      
      102,351,779
      
      
      102,351,799
      
      
      102,351,779
      
      
      102,351,779


The accompanying notes are an integral part of these
  consolidated financial statements.

F-3

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CLYVIA INC.(A Development Stage
  Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in U.S. Dollars) 
  (Unaudited)

|                                                                              |   | Cumulative     |   |   |          |   |   |            |  
|----------------------------------------------------------------------------- | - | -------------- | - | - | -------- | - | - | ---------- | -
|                                                                              |   | Amounts        |   |   | Six      |   |   | Six        |  
|                                                                              |   | From Inception |   |   | Months   |   |   | Months     |  
|                                                                              |   | (December 21,  |   |   | Ended    |   |   | Ended      |  
|                                                                              |   | 2004) to       |   |   | July 31, |   |   | July 31,   |  
|                                                                              |   | July 31, 2008  |   |   | 2008     |   |   | 2007       |  
|                                                                              |   |                |   |   |          |   |   |            |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |   |                |   |   |          |   |   |            |  
|Net loss for the period                                                       | $ | (14,275,237    | ) | $ | (737,818 | ) | $ | (1,311,424 | )
|Adjustments to reconcile net loss to cash
      used in operating activities: |   |                |   |   |          |   |   |            |  
|Stock-based compensation                                                      |   | 9,963,954      |   |   | -        |   |   | 577,156    |  
|Amortization                                                                  |   | 425,895        |   |   | 157,688  |   |   | 80,555     |  
|Change in operating assets and liabilities                                    |   |                |   |   |          |   |   |            |  
|Decrease (increase) in
      other receivables                                |   | (24,384        | ) |   | 23,558   |   |   | (61,225    | )
|Decrease (increase) in other
      receivables related parties               |   | (6,316         | ) |   | 922      |   |   | (4,209     | )
|Decrease in prepaid
      expenses                                            |   | 252            |   |   | 4,310    |   |   | 29,387     |  
|Increase (decrease) in accounts payable
      and accrued liabilities         |   | 513,726        |   |   | (210,994 | ) |   | 225,741    |  
|Increase in accounts
      payable and accrued liabilities related parties   |   | 290,802        |   |   | 71,999   |   |   | 123,289    |  
|Increase (decrease) in deposits
      unearned revenue                       |   | 15,790         |   |   | (46,429  | ) |   | 20,112     |  
|Increase (decrease) in accrued
      interest payable                         |   | 65,198         |   |   | (20,062  | ) |   | 13,970     |  
|                                                                              |   |                |   |   |          |   |   |            |  
|Net cash used in operating activities                                         |   | (3,030,320     | ) |   | (756,826 | ) |   | (306,648   | )
|                                                                              |   |                |   |   |          |   |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                          |   |                |   |   |          |   |   |            |  
|                                                                              |   |                |   |   |          |   |   |            |  
|Recovery (acquisition) of capital
      assets                                |   | (3,466,383     | ) |   | 16,301   |   |   | (229,713   | )
|                                                                              |   |                |   |   |          |   |   |            |  
|Net cash provided by (used in)
      investing activities                     |   | (3,466,383     | ) |   | 16,301   |   |   | (229,713   | )
|                                                                              |   |                |   |   |          |   |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                          |   |                |   |   |          |   |   |            |  
|                                                                              |   |                |   |   |          |   |   |            |  
|Bank indebtedness                                                             |   | 41,297         |   |   | 4,986    |   |   | 9,855      |  
|Cash acquired from Clyvia Inc.                                                |   | 7,654          |   |   | -        |   |   | -          |  
|Issuance of common
      stock for cash                                       |   | 4,383,267      |   |   | -        |   |   | -          |  
|Proceeds from loans payable                                                   |   | 1,418,808      |   |   | 768,866  |   |   | 248,052    |  
|                                                                              |   |                |   |   |          |   |   |            |  
|Net cash provided by financing activities                                     |   | 5,851,026      |   |   | 773,852  |   |   | 257,907    |  
|                                                                              |   |                |   |   |          |   |   |            |  
|EFFECT OF FOREIGN CURRENCY TRANSLATION ON                                     |   |                |   |   |          |   |   |            |  
|CASH DURING THE PERIOD                                                        |   | 645,677        |   |   | (33,327  | ) |   | 6,594      |  
|                                                                              |   |                |   |   |          |   |   |            |  
|NET DECREASE IN CASH                                                          |   | -              |   |   | -        |   |   | (271,860   | )
|                                                                              |   |                |   |   |          |   |   |            |  
|CASH, BEGINNING OF PERIOD                                                     |   | -              |   |   | -        |   |   | 271,860    |  
|                                                                              |   |                |   |   |          |   |   |            |  
|CASH, END OF PERIOD                                                           | $ | -              |   | $ | -        |   | $ | -          |  

Supplemental Disclosure with Respect to Cash Flows (Note
  12)

The accompanying notes are an integral part of these
  consolidated financial statements.

F-4

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|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|1. | HISTORY AND ORGANIZATION OF THE COMPANY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Clyvia Inc. (formerly Rapa Mining Inc.) (the Company)
      was incorporated on December 11, 2003, under the Laws of the State of
      Nevada and was in the business of exploring mineral properties. Effective
      June 16, 2005, the Company acquired 100% of the issued and outstanding
      shares of Clyvia Technology GmbH (Clyvia Technology), a company engaged
      in the development of a process known as catalytic depolymerization to
      produce fuel from various forms of waste materials including plastics. The
      Company has abandoned its mineral property acquisition and exploration
      business in order to focus its resources on the development of Clyvia
      Technologys proprietary technology. The Company is considered to be a
      development stage company, as it has not generated significant revenues
      from operations.                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Effective June 16, 2005, the Company acquired 100% of the
      issued and outstanding shares of Clyvia Technology from Inventa Holding
      GmbH (formerly known as Clyvia Capital Holding GmbH) (Inventa) in
      exchange for an aggregate of 55,000,000 shares of the Companys common
      stock. In addition, Brian Cheston transferred 14,000,000 shares of the
      Companys common stock already issued and outstanding prior to the
      transaction to Inventa in exchange for $10,000. Completion of the
      acquisition resulted in the former sole shareholder of Clyvia Technology
      holding the majority of the Companys issued and outstanding common stock.
      As a result, the transaction was accounted for as a recapitalization of
      Clyvia Technology.                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The consolidated statements of operations and cash flows
      of the Company prior to June 16, 2005, are those of Clyvia Technology. The
      Companys date of incorporation is considered to be December 21, 2004, the
      date of inception of Clyvia Technology. All significant inter-company
      balances have been eliminated on consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Effective September 1, 2005, the Company changed its name
      from Rapa Mining Inc. to Clyvia Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These unaudited consolidated financial statements have
      been prepared in conformity with generally accepted accounting principles
      in the United States of America for interim financial information. The
      accompanying unaudited consolidated financial statements do not include
      all information and footnote disclosures required for an annual set of
      financial statements prepared under United States of America generally
      accepted accounting principles. In the opinion of management, all
      adjustments (consisting solely of normal recurring accruals) considered
      necessary for a fair presentation of financial position, results of
      operations and cash flows as at July 31, 2008 and for all periods
      presented, have been included. Interim results for the period ended July
      31, 2008 are not necessarily indicative of the results that may be
      expected for the fiscal year as a whole.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These unaudited consolidated financial statements have
      been prepared with the on-going assumption that the Company will be able
      to realize its assets and discharge its liabilities in the normal course
      of business. However, certain conditions noted below raise substantial
      doubt about the Companys ability to continue as a going concern. These
      financial statements do not include any adjustments to the amounts and
      classifications of assets and liabilities that might be necessary should
      the Company be unable to continue as a going
      concern.                                                                                                                                                                                                                                                                                                                                                             

F-5

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|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|2. | GOING CONCERN (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The operations of the Company have primarily been funded
      by the sale of common stock and loans received. Continued operations of
      the Company are dependent on the Companys ability to complete equity
      financings or generate profitable operations in the future. Managements
      plan in this regard is to secure additional funds through future equity
      financings. Such financings may not be available or may not be available
      on reasonable terms to the Company.                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The unaudited consolidated financial statements of the
      Company have been prepared in conformity with generally accepted
      accounting principles in the United States of America and are stated in
      U.S. dollars. The significant accounting policies adopted by the Company
      are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles in the United States
      requires management to make estimates and assumptions that affect the
      reported amount of assets and liabilities and the disclosure of contingent
      assets and liabilities at the date of the financial statements and the
      reported amount of revenues and expenses during the reporting period.
      Actual results could differ from these estimates.                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The functional currency of the Company is the U.S.
      dollar. The Companys subsidiary, Clyvia Technology, uses the Euro as its
      functional currency. Accordingly, monetary assets and liabilities
      denominated in a foreign currency are translated at the exchange rate in
      effect at the balance sheet date while non-monetary assets and liabilities
      are translated at historical rates. Revenue and expense items denominated
      in a foreign currency are translated at exchange rates prevailing when
      such items are recognized in the statement of operations. Exchange gains
      and losses arising on translation of foreign currency items are included
      in the statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company follows the current rate method of
      translation with respect to its foreign subsidiary, Clyvia Technology.
      Accordingly, assets and liabilities are translated into U.S. dollars at
      the period-end exchange rates while revenue and expenses are translated at
      the average exchange rates during the period. Related exchange gains and
      losses are included in a separate component of stockholders equity as
      accumulated other comprehensive income.                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company considers cash held at banks and all highly
      liquid investments with original maturities of three months or less to be
      cash and cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-6

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|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                     
|   | (d)                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                     
|   | Prepaid expenses consist primarily of various prepaid
      operating expenses.                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                     
|   | (e)                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                     
|   | Other receivables consist primarily of Value Added Tax in
      Germany.                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                     
|   | (f)                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                     
|   | Property, plant and equipment are recorded at cost.
      Depreciation is calculated using the straight-line method over the useful
      lives of the assets. Maintenance and repairs are expensed as incurred
      while betterments or renewals are capitalized.
|   |                                                                                                                                                                                                                                                                     
|   | The Company provides for depreciation over the estimated
      life of each asset on a straight-line basis over the following
      periods:                                                                                                                        

Office equipment
      3-13 yearsPlant equipment
      10-13 yearsLaboratory equipment
      3-14 yearsBuilding
      33.33 years


(g)        Accounting for
  the impairment of long-lived assets and long-lived assets to be disposed of

The Company reviews all long-lived
  assets for impairment whenever events or changes in circumstances indicate that
  the carrying amount of an asset may not be recoverable. Recoverability of assets
  to be held and used is measured by a comparison of the carrying amount of an
  asset to future net cash flows expected to be generated by the asset. If such
  assets are considered to be impaired, the impairment recognized is measured by
  the amount by which the carrying amount of the assets exceeds the fair value of
  the assets. Assets to be disposed of are reported at the lower of the carrying
  amount or fair value less costs to sell.

(h)        Income taxes

A deferred tax asset or liability is
  recorded for all temporary differences between financial and tax reporting and
  net operating loss carryforwards. Deferred tax expenses (benefit) result from
  the net change during the period of deferred tax assets and liabilities.

Deferred tax assets are reduced by a
  valuation allowance when, in the opinion of management, it is more likely than
  not that some portion or all of the deferred tax assets will not be realized.
  Deferred tax assets and liabilities are adjusted for the effects of changes in
  tax laws and rates on the date of enactment.

F-7

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company's financial instruments consist of bank
      indebtedness, other receivables, other receivables  related parties,
      accounts payable and accrued liabilities, accounts payable and accrued
      liabilities related parties, loans payable and loans payable related
      parties. Unless otherwise noted, it is management's opinion that the
      Company is not exposed to significant interest, currency or credit risks
      arising from these financial instruments. The fair value of these
      financial instruments approximates their carrying values, unless otherwise
      noted.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company recognizes revenue when persuasive evidence
      of an arrangement exists, delivery has occurred, the sales price is fixed
      or determinable and collectibility is reasonably assured. Revenue from
      processing waste is recognized when title passes to the customer and all
      revenue recognition criteria specified above is met.                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Effective January 1, 2006, the Company accounts for
      stock-based compensation issued to employees in accordance with the
      provisions of Statement of Financial Accounting Standards (SFAS) 123R, Share- Based Payment.which superseded Accounting Principles
      Board (APB) Opinion 25, Accounting for Stock Issued to
        Employees.                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company accounts for stock-based compensation issued
      to non-employees in accordance with the provisions of SFAS 123, Accounting for Stock-Based Compensation,and the consensus in
      Emerging Issues Task Force (EITF) No. 96-18, Accounting for Equity
      Instruments that are Issued to Other Than Employees for Acquiring or in
      Conjunction with Selling, Goods or Services.                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Basic net loss per share is computed by dividing the net
      loss for the period by the weighted average number of shares of common
      stock outstanding during the period. Diluted earnings per share takes into
      consideration shares of common stock outstanding (computed under basic
      earnings per share) and potentially dilutive shares of common stock. As of
      July 31, 2008 and 2007, the 9,870,000 and 9,870,000 options outstanding
      respectively, have been excluded from diluted loss per share as they were
      anti-dilutive.                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company has adopted SFAS 130, Reporting of
      Comprehensive Income,which establishes guidelines for the reporting
      and display of comprehensive income (loss) and its components in financial
      statements. Comprehensive income (loss) includes foreign currency
      translation adjustments.                                                                                                                                                                                                                                                                                                       

F-8

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (n)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is a development stage company as defined in
      SFAS 7, Accounting and Reporting by Development Stage Enterprises,as it is devoting substantially all of its efforts to establish a new
      business and planned principal operations have not yet
      commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (o)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Cash is the only financial instrument that potentially
      subjects the Company to concentration of credit risk. The Company
      maintains cash in bank accounts that, at times, may exceed federally
      insured limits. The Company has not experienced any losses in such
      accounts and believes it is not exposed to any significant risks on its
      cash in bank accounts.                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (p)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements. SFAS No. 157 establishes a framework for
      measuring the fair value of assets and liabilities. This framework is
      intended to provide increased consistency in how fair value determinations
      are made under various existing accounting standards which permit, or in
      some cases require, estimates of fair market value. SFAS No. 157 is
      effective for fiscal years beginning after November 15, 2007, and interim
      periods within those fiscal years. Earlier application is encouraged,
      provided that the reporting entity has not yet issued financial statements
      for that fiscal year, including any financial statements for an interim
      period within that fiscal year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | FASB Staff Position 157-2 (FSP SFAS 157-2) delayed the
      effective date of SFAS 157 until fiscal years beginning after November 15,
      2008, and interim periods within those fiscal years, for all nonfinancial
      assets and nonfinancial liabilities, except for items that are recognized
      or disclosed at fair value in the financial statements on a recurring
      basis (at least annually). The Company adopted SFAS 157 on January 1,
      2008, and utilized the one year deferral for nonfinancial assets and
      nonfinancial liabilities that was granted by FSP FAS 157-2. The adoption
      of SFAS 157 did not have a material impact on the Companys consolidated
      financial statements.                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In February, 2007, the FASB issued SFAS No. 159, The
      Fair Value Option for Financial Assets and Financial Liabilities.
      SFAS No. 159 permits entities to choose to measure many financial assets
      and financial liabilities at fair value. Unrealized gains and losses on
      items for which the fair value option has been elected are reported in
      earnings. SFAS No. 159 is effective for fiscal years beginning after
      November 15, 2007. The adoption of FAS 159 did not have a material impact
      on the Companys consolidated financial
      statements.                                                                                                                                                                                                              

F-9

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (p)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In March 2008, the FASB issued SFAS No. 161,
      Disclosures about Derivative Instruments and Hedging Activities.
      SFAS 161 changes the disclosure requirements for derivative instruments
      and hedging activities by requiring enhanced disclosures about how and why
      an entity uses derivative instruments, how derivative instruments and
      related hedged items are accounted for under SFAS 133, and how derivative
      instruments and related hedged items affect an entitys operating results,
      financial position, and cash flows. SFAS 161 is effective for fiscal years
      beginning after November 15, 2008. Earlier adoption is permitted. The
      Company is currently reviewing the provisions of FAS 161 and has not yet
      adopted the statement. However, as the provisions of SFAS 161 are only
      related to disclosure of derivative and hedging activities, the Company
      does not believe the adoption of SFAS 161 will have a material impact on
      its consolidated operating results, financial position, or cash
    flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (q)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Certain amounts reported in the prior periods have been
    reclassified to conform to the current periods presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4. | PROPERTY, PLANT AND
      EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                          |   | July
      31, |   |   | January 31, |  
| | ------------------------ | - | -------------- | - | - | ----------- | -
| |                          |   | 2008           |   |   | 2008        |  
| |                          |   |                |   |   |             |  
| | Office equipment         | $ | 105,992        |   | $ | 100,349     |  
| | Plant equipment          |   | 2,457,443      |   |   | 2,357,118   |  
| | Laboratory equipment     |   | 30,774         |   |   | 29,316      |  
| | Building                 |   | 1,100,794      |   |   | 1,048,638   |  
| | Land                     |   | 194,416        |   |   | 185,204     |  
| |                          |   | 3,889,419      |   |   | 3,720,625   |  
| | Accumulated depreciation |   | (391,428       | ) |   | (268,207    | )
| |                          |   |                |   |   |             |  
| | Net book value           | $ | 3,497,991      |   | $ | 3,452,418   |  

In the event that facts and
  circumstances indicate that the carrying amount of an asset may not be
  recoverable and an estimate of future undiscounted cash flows is less than the
  carrying amount of the asset, an impairment loss will be recognized.
  Management's estimates of revenues, operating expenses, and operating capital
  are subject to certain risks and uncertainties which may affect the
  recoverability of the Company's investments in its assets. Although management
  has made its best estimate of these factors based on current conditions, it is
  possible that changes could occur which could adversely affect management's
  estimate of the net cash flow expected to be generated from its operations.

F-10

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|5. | BANK INDEBTEDNESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | At July 31, 2008 and January 31, 2008, the Company had a
      consolidated bank indebtedness of $55,696 and $48,077, respectively.
      Clyvia Technology has an account overdraft limit of Euro 50,000 (US
      $77,906) which bears interest at 11.5% per annum, is secured by a company
      related to a managing director of Clyvia Technology and is due September
      30, 2008. The overdraft bears interest at 16.5% per annum on any amounts
      exceeding the overdraft limit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the year ended January 31, 2008, several loans
      were granted from a third party company totaling Euro 90,000 (US
      $140,231). The loans bear interest at 8% per annum and are due December
      31, 2008. Interest expense included in the statement of operations for the
      six and three months ended July 31, 2008 totaled Euro 3,722 (US $5,760)
      and Euro 1,899 (US $2,969), respectively. Interest expense included in the
      statement of operations for the six and three months ended July 31, 2007
      totaled Euro $0 (US $0) and Euro $0 (US $0), respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the six months ended July 31, 2008, two loans were
      granted from a third party individual for Euro 12,000 (US $18,697) and
      Euro 12,895 (US $20,092), respectively. The loans bears interest at 8.5%
      per annum and were due by either party providing one months notice at the
      end of a given month beginning June 30, 2008. On May 14, 2008, the loans
      were extended to July 31, 2008. On July 29, 2008, the loans were extended
      to December 31, 2008. Interest expense included in the statement of
      operations for the six and three months ended July 31, 2008 totaled Euro
      882 (US $1,368) and Euro 541 (US $845), respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the year ended January 31, 2008, a loan was
      granted from a third party individual for Euro 35,000 (US $54,534). The
      loan bears interest at 8.5% per annum and was due September 30, 2007. On
      September 26, 2007, the loan was extended until December 31, 2007. On May
      14, 2008, the loan was extended to July 31, 2008. On July 29, 2008, the
      loan was extended to December 31, 2008. Interest expense included in the
      statement of operations for the six and three months ended July 31, 2008
      totaled Euro 1,564 (US $2,422) and Euro 799 (US $1,249), respectively.
      Interest expense included in the statement of operations for the six and
      three months ended July 31, 2007 totaled Euro 0 (US $0) and Euro 0 (US
      $0), respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the year ended January 31, 2008, a loan was
      granted from a third party company for Euro 150,000 (US $233,718). In
      addition, the same third party company agreed to reclassify Euro 210,000
      (US $327,205) of accounts payable to loans payable. The loans bore
      interest at 8.5% per annum and were due August 31, 2007. Subsequent to
      August 31, 2007, the loans were extended to December 31, 2007. Subsequent
      to December 31, 2007, Clyvia Technology and the lender entered into
      negotiations to extend the terms of the loans. Effective September 1,
      2007, the loans bore interest at 10% per annum and effective January 1,
      2008, the loans bore at 17.75% per annum. On June 6 and June 20, 2008, the
      loans and interest totaling Euro 438,600 (US $683,391) were repaid by a
      third party company. The third party company also repaid accounts payable
      of Euro 11,400 (US $17,763) to the same lender. The third party company
      then granted several new loans totaling Euro 450,000 (US $701,154).
      Interest expense included in the statement of operations for the six and
      three months ended April 30, 2008 totaled Euro 38,879 (US $60,110) and
      Euro 17,571 (US $27,474), respectively. Interest expense included in the
      statement of operations for the six and three months ended April 30, 2007
      totaled Euro 4,765 (US $6,455) and Euro 4,765 (US $6,455),
      respectively.

F-11

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|6. | LOANS PAYABLE (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the six months ended July 31, 2008, two loans were
      granted from a third party company for $2,500 and $2,000. The loans bear
      interest at 10% per annum, compounded annually, and are due on demand.
      Interest expense included in the statement of operations for the six and
      three months ended July 31, 2008 totaled $201 and $113,
      respectively.                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended January 31, 2008, several loans
      were granted from a third party company totaling $41,000. The loans are
      unsecured and are due on demand. On December 31, 2007, the Company agreed
      to begin paying interest on the first loan of $10,000 at 10% per annum,
      compounded annually. The additional loans also bear interest at 10% per
      annum, compounded annually. Interest expense included in the statement of
      operations for the six and three months ended July 31, 2008 totaled $2,039
      and $1,031, respectively. Interest expense included in the statement of
      operations for the six and three months ended July 31, 2007 totaled Euro 0
      (US $0) and Euro 0 (US $0), respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended January 31, 2007, a loan was
      granted from a third party company for $190,000. The loan bears interest
      at 8% per annum, compounded annually, and was due July 18, 2008. On July
      18, 2008, the loan was verbally extended and now bears interest at 10% per
      annum and is due on demand. Interest expense included in the statement of
      operations for the six and three months ended April 30, 2008 totaled
      $8,345 and $4,342, respectively. Interest expense included in the
      statement of operations for the six and three months ended April 30, 2007
      totaled $7,581 and $3,874, respectively.                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|7. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Other receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At July 31, 2008 and January 31, 2008, included in other
      receivables related parties is Euro 3,597 (US $5,605) and 3,597 (US
      $5,318), respectively, owed from a company with a common director and
      officer of Clyvia Technology for vehicle maintenance. At January 31, 2008,
      included in accounts payable and accrued liabilities related parties is
      Euro 2,885 (US $3,740) owed to the same company for the use of a vehicle.
      Net vehicle costs paid for the six and three months ended July 31, 2008
      totaled Euro 0 (US $0) and Euro 0 (US $0). Net vehicle costs paid for the
      six and three months ended July 31, 2007 totaled Euro 5,610 (US $7,528)
      and Euro 3,033 (US $4,109), respectively.    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At July 31, 2008 and January 31, 2008, included in other
      receivables related parties is Euro 1,042 (US $1,624) and Euro 1,042 (US
      $1,541), respectively, owed from a company with a common director and
      officer of Clyvia Technology for various operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At January 31, 2008, included in other receivables
      related parties is Euro 595 (US $879),  owed from a managing
      director of Clyvia Technology for the personal portion of travel
    expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-12

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|7. | RELATED PARTY TRANSACTIONS (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Accounts payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At July 31, 2008 and January 31, 2008, included in
      accounts payable and accrued liabilities related parties is Euro 55,285
      (US $86,140) and Euro 69,221 (US $102,323), respectively, owed to a
      company related to a managing director of Clyvia Technology for the
      purchase of plant equipment. At July 31, 2008 and January 31, 2008,
      included in accounts payable and accrued liabilities related parties is
      Euro 1,987 (US $3,096) and Euro 1,123 (US $1,658) owed to the same company
      for rent.                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At July 31, 2008, included in accounts payable and
      accrued liabilities related parties is Euro 7,055 (US $10,992) owed to an
      individual related to a former managing director of Clyvia Technology for
      scientific consulting services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At July 31, 2008 included in accounts payable and accrued
      liabilities related parties is $2,358 owed to an officer and director of
      the Company for consulting fees and reimbursement of expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At July 31, 2008 and January 31, 2008, included in
      accounts payable and accrued liabilities related parties is Euro 131,593
      (US $205,037) and Euro 84,618 (US $125,082), respectively, owed to a
      former director and officer of the Company for management fees and
      reimbursement of expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At July 31, 2008 and January 31, 2008, included in
      accounts payable and accrued liabilities related parties is CAD $95 (US
      $93) and CAD $95 (US $95), respectively, owed to a former officer and
      director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Loans payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the six months ended July 31, 2008, several loans
      were granted from a company that is the majority shareholder of Inventa
      totaling Euro 450,000 (US $701,154). The loans bears interest at 5% per
      annum and are due by either party providing one months notice at the end
      of a given month beginning December 31, 2008. Interest expense included in
      the statement of operations for the six and three months ended July 31,
      2008 totaled Euro 3,333 (US $5,211) and Euro 3,333 (US $5,211),
      respectively.                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the six months ended July 31, 2008, several loans
      were granted from a company that is the majority shareholder of Inventa
      totaling Euro 164,000 (US $255,531). The loans bear interest at 10% per
      annum. One loan of Euro 35,000 (US $54,534) is due by either party
      providing one months notice at the end of a given month beginning
      December 31, 2008. The remaining loans are due by either party providing
      one months notice at the end of a given month beginning three months
      after the date of grant. The loans are secured by a total of 1,196,000
      shares of the Companys common stock which are owned by Inventa. Interest
      expense included in the statement of operations for the six and three
      months ended July 31, 2008 totaled Euro 3,559 (US $5,559) and Euro 3,395
      (US $5,307), respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the six months ended July 31, 2008, two loans were
      granted from Inventa for Euro 200,000 (US $311,624) and Euro 15,000 (US
      $23,372), respectively. The loans bear interest at 8% per annum and are
      due by either party providing one months notice at the end of a given
      month. Interest expense included in the statement of operations for the
      six and three months ended July 31, 2008 totaled Euro 5,726 (US $8,910)
      and Euro 4,363 (US $6,822), respectively.                                                                                                                                                                                                                                                                                                                                                                            

F-13

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|7. | RELATED PARTY TRANSACTIONS (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Loans payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended January 31, 2008, a loan was
      granted from a company related to a managing director of Clyvia Technology
      for Euro 28,000 (US $43,627). The loan bears interest at 8% per annum and
      is due by providing one month written notice at any quarter-end. Interest
      expense included in the statement of operations for the six and three
      months ended July 31, 2008 totaled Euro 1,300 (US $1,757) and Euro 579 (US
      $906), respectively. Interest expense included in the statement of
      operations for the six and three months ended July 31, 2007 totaled Euro 0
      (US $0) and Euro 0 (US $0), respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Management fees paid to a former officer and director of
      the Company for the six and three months ended July 31, 2008 totaled Euro
      45,000 (US $69,553) and Euro 22,500 (US $35,172), respectively. Management
      fees paid to a former officer and director of the Company for the six and
      three months ended July 31, 2007 totaled Euro 45,000 (US $60,732) and Euro
      22,500 (US $31,084), respectively. Consulting fees paid to an officer and
      director of the Company for the six and three months ended July 31, 2008
      totaled $6,000 and $3,000, respectively. Consulting fees paid to an
      officer and director of the Company for the six and three months ended
      July 31, 2007 totaled $6,000 and $3,000, respectively. Wages paid to
      officers and directors of Clyvia Technology for the six and three months
      ended July 31, 2008 totaled Euro 27,500 (US $42,480) and 11,250 (US
      $17,936), respectively. Wages paid to officers and directors of Clyvia
      Technology for the six and three months ended July 31, 2007 totaled Euro
      52,500 (US $70,389) and 26,250 (US $35,562), respectively. Amounts due to
      and from officers and directors are unsecured, non-interest bearing and
      due on demand.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Lease fees paid to a company related to a managing
      director of Clyvia Technology for the six and three months ended July 31,
      2008 totaled Euro 3,542 (US $5,482) and Euro 1,771 (US $2,769). Lease fees
      paid to a company related to a managing director of Clyvia Technology for
      the six and three months ended July 31, 2007 totaled Euro 3,702 (US
      $4,966) and Euro 1,931 (US $2,616).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys articles of incorporation allow it to issue
      up to 525,000,000 shares of common stock, par value $0.001. Effective
      February 18, 2005, the Company effected a stock split of its common stock
      by issuing seven new shares for every one old share. Except as otherwise
      stated to the contrary in these financial statements, all references to
      shares and prices per share have been adjusted to give retroactive effect
      to the stock split.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On June 16, 2005, the Company acquired all the issued and
      outstanding stock of Clyvia Technology, which was accounted for as a
      recapitalization of the Clyvia Technology (Note 1) in exchange for
      55,000,000 shares of common stock. The issued number of shares of common
      stock is that of the Company with adjustments made for differences in par
      value between the Company and Clyvia Technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-14

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|8. | COMMON STOCK (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On June 28, 2005, the Company issued 305,555 units at a
      price of $1.08 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $330,000. Each warrant will entitle the
      holder to purchase an additional share of the Companys common stock at a
      price of $1.08 for a period of two years from the date of issuance of the
      units (expired).                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On July 27, 2005, the Company issued 404,762 units at a
      price of $1.05 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $425,000. Each warrant will entitle the
      holder to purchase an additional share of the Companys common stock at a
      price of $1.05 for a period of two years from the date of issuance of the
      units (expired).                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On December 15, 2005, the Company issued 1,801,802 units
      at a price of $1.11 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $2,000,000. Each warrant will entitle the
      holder to purchase an additional share of the Companys common stock at a
      price of $1.35 for a period of two years from the date of issuance of the
      units (expired).                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On May 4, 2006, the Company issued 442,478 units at a
      price of $1.13 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $500,000. Each warrant entitles the holder
      to purchase an additional share of the Companys common stock at a price
      of $1.13 per share for a period of two years from the date of closing
      (expired).                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On May 5, 2006, the Company issued 217,391 units at a
      price of $1.15 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $250,000. Each warrant entitles the holder
      to purchase an additional share of the Companys common stock at a price
      of $1.15 per share for a period of two years from the date of closing
      (expired).                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On June 12, 2006, the Company issued 217,391 units at a
      price of $1.15 per unit in a private placement transaction. Each unit
      consists of one share of the Companys common stock and one share purchase
      warrant for total proceeds of $250,000. Each warrant entitles the holder
      to purchase an additional share of the Companys common stock at a price
      of $1.15 per share for a period of two years from the date of closing
      (expired).                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On December 6, 2006, the Company issued 1,157,400 units
      at a price of Euro 0.432 (US $0.57) per unit in a private placement
      transaction. Each unit consists of one share of the Companys common stock
      and one share purchase warrant for total proceeds of Euro 500,000 (US
      $661,250). Each warrant entitles the holder to purchase an additional
      share of the Companys common stock at a price of Euro 0.44 (US $0.57) per
      share for a period of one year from the date of closing (expired). A
      finders fee of Euro 50,000 (US $66,450) equal to 10% of the proceeds of
      the private placement was paid on December 12, 2006 to a company in
      consideration for its efforts in arranging the private
      placement.

F-15

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|9. | STOCK OPTIONS AND WARRANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On May 17, 2005, the Company adopted a stock incentive
      plan (the 2005 Stock Option Plan) to provide incentives to employees,
      directors, officers and consultants. The 2005 Stock Option Plan provides
      for the issuance of up to 6,420,750 options with a maximum term of five
      years. The maximum aggregate number of shares that may be optioned under
      the 2005 Stock Option Plan will be increased effective the first day of
      each of the Companys fiscal quarters, beginning with the fiscal quarter
      commencing May 1, 2005, up to a maximum of 15% of the outstanding shares
      on the first day of the applicable quarter. The plan administrator has
      sole discretion to establish, waive or modify the vesting terms of the
      options.               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On August 16, 2006, the Company adopted a second stock
      incentive plan (the 2006 Stock Option Plan) to provide incentives to
      employees, directors, officers and consultants. The 2006 Stock Option Plan
      provides for the issuance of up to 6,000,000 options with a maximum term
      of five years. The maximum aggregate number of shares that may be optioned
      under the 2006 Stock Option Plan will be increased effective the first day
      of each of the Companys fiscal quarters, beginning with the fiscal
      quarter commencing November 1, 2006, up to a maximum of 10% of the
      outstanding shares on the first day of the applicable quarter. The plan
      administrator has sole discretion to establish, waive or modify the
      vesting terms of the options.

| |                                       |  |           |  |   | Weighted Average | 
| | ------------------------------------- |  | --------- |  | - | ---------------- | 
| |                                       |  | Number    |  |   | Exercise Price   | 
| |                                       |  |           |  |   |                  | 
| | Options outstanding, January 31, 2008 |  | 9,870,000 |  | $ | 0.98             | 
| | Granted                               |  | -         |  |   | -                | 
| | Exercised                             |  | -         |  |   | -                | 
| | Expired                               |  | -         |  |   | -                | 
| | Options outstanding, July 31, 2008    |  | 9,870,000 |  | $ | 0.98             | 

On July 11, 2005, the Company granted
  stock options to directors, officers and consultants under the 2005 Stock Option
  Plan, to acquire a total of 6,050,000 shares of common stock exercisable at a
  price of $1.09 per share up to July 11, 2010.

On August 16, 2006, the Company granted
  stock options to a consultant under the 2005 Stock Option Plan, to acquire a
  total of 100,000 shares of common stock exercisable at a price of $1.00 per
  share up to August 16, 2011.

On August 16, 2006, the Company granted
  stock options to officers and directors under the 2006 Stock Option Plan, to
  acquire a total of 2,500,000 shares of common stock exercisable at a price of
  $1.00 per share up to August 16, 2011.

On July 12, 2007, the Company granted
  stock options to officers and directors and consultants under the 2006 Stock
  Option Plan, to acquire a total of 1,220,000 shares of common stock exercisable
  at a price of $0.40 per share up to July 12, 2012.

F-16

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|9. | STOCK OPTIONS AND WARRANTS (continued)
      Stock Options
    (continued)  
|-- | ----------------------------------------------------------------------------
|   |                                                                             
|   | A summary of stock options outstanding at July 31, 2008
      is as follows:

Outstanding
        Options
      
      
      Exercisable
        OptionsWeighted
      
      
      
      
      
      
      
      
      WeightedAverage
      
      
      Weighted
      
      
      
      
      
      Average
      
      
      WeightedRemaining
      
      
      Average
      
      
      
      
      
      Remaining
      
      
      AverageExercise
      
      
      
      
      Contractual
      
      
      Exercise
      
      
      
      
      
      Contractual
      
      
      ExercisePrice
      
      Number
      
      
      Life
      
      
      Price
      
      
      Number
      
      
      Life
      
      
      Price2005 Stock Option Plan$      
         1.09
      
      6,050,000
      
      
      1.94
      
      $
      1.09
      
      
      6,050,000
      
      
      1.94
      
      $
      1.09$      
         1.00
      
      100,000
      
      
      3.04
      
      $
      1.00
      
      
      100,000
      
      
      3.04
      
      $
      1.002006 Stock Option Plan$       
        1.00
      
      2,500,000
      
      
      3.04
      
      $
      1.00
      
      
      2,500,000
      
      
      3.04
      
      $
      1.00$      
         0.40
      
      1,220,000
      
      
      3.95
      
      $
      0.40
      
      
      1,220,000
      
      
      3.95
      
      $
      0.40


On July 11, 2005, the Company used the
  Black-Scholes option pricing model to compute estimated fair value, based on the
  following assumptions:

| | Risk-free interest rate                   | 3.91%      | 
| | ----------------------------------------- | ---------- | 
| | Dividend yield rate                       | 0.00%      | 
| | Price volatility                          | 117.00%    | 
| | Weighted average expected life of options | 4.95 years | 

On August 16, 2006, the Company used
  the Black-Scholes option pricing model to compute estimated fair value, based on
  the following assumptions:

| | Risk-free interest rate                   | 4.81%     | 
| | ----------------------------------------- | --------- | 
| | Dividend yield rate                       | 0.00%     | 
| | Price volatility                          | 76.47%    | 
| | Weighted average expected life of options | 5.0 years | 

On July 12, 2007, the Company used the
  Black-Scholes option pricing model to compute estimated fair value, based on the
  following assumptions:

| | Risk-free interest rate                   | 5.03%     | 
| | ----------------------------------------- | --------- | 
| | Dividend yield rate                       | 0.00%     | 
| | Price volatility                          | 101.45%   | 
| | Weighted average expected life of options | 5.0 years | 

The intrinsic value for all options
  outstanding was $Nil as of July 31, 2008 and January 31, 2008.

F-17

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|9. | STOCK OPTIONS AND WARRANTS (continued)
        Warrants
|-- | -------------------------------------------------------

| |                                        |  |          |   |   | Weighted Average | 
| | -------------------------------------- |  | -------- | - | - | ---------------- | 
| |                                        |  | Number   |   |   | Exercise Price   | 
| |                                        |  |          |   |   |                  | 
| | Warrants outstanding, January 31, 2008 |  | 877,620  |   | $ | 1.14             | 
| | Granted                                |  | -        |   |   | -                | 
| | Exercised                              |  | -        |   |   | -                | 
| | Expired                                |  | (877,620 | ) |   | 1.14             | 
| | Warrants outstanding, July 31, 2008    |  | -        |   | $ | -                | 

|10. | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Companys operations following the acquisition of
      Clyvia Technology were conducted in one reportable segment, being the
      development and commercialization of the process known as catalytic
      depolymerization, in Germany. All of the Companys property, plant and
      equipment are located in Germany.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On July 1, 2005, the Company entered into a management
      services contract with a director and officer of the Company effective
      July 1, 2005, to pay monthly management fees of 5,000 Euro (US $7,791).
      The agreement also specified a grant of options to purchase 250,000 shares
      of the Companys common stock pursuant to the Companys 2005 Stock Option
      Plan at an exercise price of $1.09 per share for a period of five years
      from the date of issuance. The stock options were granted July 11, 2005.
      The agreement was for a one-year term and was to automatically extend for
      additional one year terms on the anniversary date unless notice was given
      by the Company at least 90 days prior to renewal. On November 23, 2005,
      Clyvia Technology increased the monthly management fee to 7,500 Euro (US
      $11,686) effective January 1, 2006. On August 7, 2008, the director and
      officer resigned and terminated the management consulting agreement
      effective August 1, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On July 1, 2005, Clyvia Technology entered into an
      employment contract with a director and officer of Clyvia Technology
      effective July 1, 2005, to pay monthly management fees of 2,300 Euro (US
      $3,584) and a management bonus of 1.5% of the selling price for each
      system sold for an indefinite term. The contract may be terminated at the
      end of each calendar year by giving written notice of one year. On
      November 23, 2005, Clyvia Technology increased the monthly management fee
      to 5,000 Euro (US $7,791) effective January 1, 2006. On August 16, 2006,
      the management bonus of 1.5% of the selling price for each system sold was
      cancelled in exchange for 1,000,000 stock options (Note 9). Effective
      February 24, 2008, the director and officer of Clyvia Technology resigned
      and began providing consulting services. The terms of the employment
      contract remain unchanged.                                                                                            

F-18

---

|CLYVIA INC.                                   
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|July 31, 2008                                 
|(Unaudited)                                   
|                                              
|                                              

|11. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On September 1, 2005, Clyvia Technology entered into a
      lease agreement for tenancy of office space with a company related to a
      managing director of Clyvia Technology for a term of five years expiring
      September 1, 2010. The lease may be terminated by either party by
      providing twelve months notice. The lease agreement requires monthly lease
      payments of Euro 590 (US $919) plus taxes.                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On November 24, 2005, Clyvia Technology entered into an
      employment contract with a director and officer of Clyvia Technology
      effective January 1, 2006, to pay monthly management fees of 3,750 Euro
      (US $5,843) and a management bonus of 1.5% of the selling price for each
      system sold for an indefinite term. The contract period is indefinite, may
      be terminated with one year notice and terminates at the age of 65. On
      August 16, 2006, the management bonus of 1.5% of the selling price for
      each system sold was cancelled in exchange for 1,000,000 stock options
      (Note 9).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|12. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH
      FLOWS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                |   | Cumulative    |  |   |          |  |   |          | 
| | -------------- | - | ------------- |  | - | -------- |  | - | -------- | 
| |                |   | Amounts from  |  |   |          |  |   |          | 
| |                |   | Inception     |  |   | Six      |  |   | Six      | 
| |                |   | (December 21, |  |   | Months   |  |   | Months   | 
| |                |   | 2004) to      |  |   | Ended    |  |   | Ended    | 
| |                |   | July 31,      |  |   | July 31, |  |   | July 31, | 
| |                |   | 2008          |  |   | 2008     |  |   | 2007     | 
| |                |   |               |  |   |          |  |   |          | 
| | Cash paid for: |   |               |  |   |          |  |   |          | 
| | Interest       | $ | 8,174         |  | $ | 4,090    |  | $ | 916      | 
| | Income taxes   | $ | -             |  | $ | -        |  | $ | -        | 
| |                |   |               |  |   |          |  |   |          | 

|    | Non-cash Transaction                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                               
|    | Investing and financing activities that do not have an
      impact on current cash flows are excluded from the statement of cash
      flows.                                
|    |                                                                                                                                                                               
|13. | SUBSEQUENT EVENTS                                                                                                                                                             
|    |                                                                                                                                                                               
|    | Subsequent to July 31, 2008, several loans totaling
      $5,450 were granted from a third party company The loans bear interest at
      10% per annum and are due on demand.
|    |                                                                                                                                                                               
|    | On September 6, 2008, 1,500,000 options granted to a
      former officer and director of the Company expired as per the terms of his
      option grant.                     

F-19

---

ITEM
2.              
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESUTLS OF
OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report
constitute "forward-looking statements. These statements, identified by words
such as plan, "anticipate," "believe," "estimate," "should," "expect" and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Part II  Item 1A. Risk
Factors" and elsewhere in this Quarterly Report. We do not intend to update the
forward-looking information to reflect actual results or changes in the factors
affecting such forward-looking information. We advise you to carefully review
the reports and documents, particularly our Annual Reports, Quarterly Reports
and Current Reports, that we file from time to time with the United States
Securities and Exchange Commission (the SEC).

As used in this Quarterly Report, the terms "we, "us,
  "our, and Clyvia mean Clyvia Inc. and its subsidiaries unless
  otherwise indicated. The term Clyvia GmbH means our wholly owned
  subsidiary, Clyvia Technology GmbH. All dollar amounts in this Quarterly Report
  are in U.S. dollars unless otherwise stated.

INTRODUCTION

The following discussion and analysis summarizes our plan of
operation for the next twelve months, our results of operations for the six
month period ended July 31, 2008 and changes in our financial condition from our
fiscal year ended January 31, 2008. This discussion should be read in
conjunction with the Managements Discussion and Analysis of Financial Condition
and Results of Operation included in our Annual Report on Form 10-K for the year
ended January 31, 2008 filed with the SEC on June 16, 2008.

Through Clyvia GmbH, we are developing and marketing a
proprietary technology that utilizes a process known as fractional
depolymerization to produce diesel fuel and heating oil from various types of
recyclable waste materials (the Fuel Technology). We plan to earn revenues
from the sale and construction of recycling/processing plants and from the sale
of diesel fuel and heating oil produced at Clyvia GmbHs pilot plant located in
Wegberg-Wildenrath, Germany.

RECENT CORPORATE DEVELOPMENTS

|1. | Effective August 7, 2008, Walter P.W. Notter resigned as
      our Chief Executive Officer, Chief Financial Officer, President, Treasurer
      and as a member of the Board of Directors. Mr. Notter resigned to pursue
      other business interests. There was no disagreement between Mr. Notter and
      the Company regarding any matter relating to the Companys operations,
      policies or practices. In accordance with their terms, stock options to
      purchase 1,500,000 shares of our common stock granted to Mr. Notter while
      acting as one of our officers and directors expired on September 6, 2008,
      thirty days after his resignation.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Mr. John Boschert, our Secretary, was appointed in Mr.
      Notters place. Mr. Boschert has acted as our Secretary since June 28,
      2005. We currently pay Mr. Boschert a management fee of $5,000 per month
      in accordance with the terms of a management consulting agreement that we
      entered into with Mr. Boschert on September 3, 2008.                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | In August 2007, Clyvia GmbH had entered into a contract
      with Oeko + Bio Technologies AG (Oeko Bio) for the sale of 5 CL 500
      fractional depolymerization plants. The contract had called for
  Oeko                                                                                                                                                                                                                                                                                                                                                                                                                                                             

3

---

Bio to pay Clyvia GmbH EUR 14,250,000
(approximately $22,203,210) for the ordered plants, and was subject to Oeko
Bios ability to obtain financing for the project. We had previously been
informed by Oeko Bio that it had received approval to begin the financing
process; however, we have now received notice that they did not receive final
regulatory approval. As a result, the contract with Oeko Bio has been
cancelled.

PLAN OF OPERATION

Product Development and Improvement Objectives

We have completed the construction, principal testing and commissioning
  of our fractional depolymerization pilot plant. In addition, we have completed
  large scale test runs of the pilot plant and have made minor technical adjustments
  to optimize the pilot plants fractional depolymerization process. We have
  obtained a report from TÜV Rheinland Group (TÜV), an independent
  testing service, confirming that our pilot plant functions as claimed when waste
  oil is used as the input substance. We are currently working to obtain TÜV
  certification of our pilot plants functionality when using plastics as
  the input product.

During the next twelve months, we also intend to work on modifying
  the system to enable it to capture chlorine gas byproducts given off when input
  materials containing chlorine (such as PVCs) are processed. In order to
  solve the problem of toxic gas outputs, Clyvia GmbH is exploring the use of
  reagent materials to bind the chlorine as a common salt within the reactor system,
  allowing it to be disposed of in an environmentally friendly manner.

In addition, if we are able to obtain sufficient financing, of
which there is no assurance, Clyvia GmbH will work on modifying the system so
that it is able to produce diesel fuel or heating oil from bituminous
substances, rubber and organic materials such as garden cuttings and wood. To
date, no depolymerization process has been able to process these materials into
usable oil. Clyvia GmbH has not yet been able to successfully depolymerize these
materials; however, it believes that it should be chemically possible to process
these materials into diesel fuel or heating oil. In order to do this, Clyvia
GmbH intends to use a pyrolysis process to breakdown the input materials and
then feed the resulting oils through its fractional depolymerization system.

In addition, we expect to work on making minor improvements and
modifications to the Fuel Technology on an ongoing basis in order to increase
its marketability.

Our ability to complete the above product development and
improvement objectives is dependent on our ability to obtain substantial
financing in the near term. In addition, if we obtain firm orders for the
purchase of fractional depolymerization plants, of which there are no
assurances, we may scale back our product development and improvement activities
to focus our resources on constructing any ordered plants.

Marketing and Sales Plans

We have also begun focusing on marketing and selling the Fuel
Technology. Our marketing and sales program involves the following:

|(a) | We will conduct tests/demonstrations for potential
      purchasers of recycling/processing systems based on our Fuel Technology.
      It is expected that potential customers will provide us with samples of
      the input materials that they intend to use in systems purchased from us.
      We will then use these sample materials in our pilot plant to conduct a
      test run to determine the quality and amount of diesel fuel produced. The
      results of these tests will be used to formulate
      modifications/specifications for potential recycling/processing systems to
      be sold to the potential customer. We intend to charge potential customers
      for conducting the test runs.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | When not using the pilot plant to conduct test runs, we
      may use the pilot plant to process used oil, bilge oil and/or other
      materials to produce diesel fuel or heating oil that we will sell directly
      to small                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

4

---

oil companies and other potential buyers. The pilot plant
  contains two bulk storage tanks that can be used to store used oil or other
  input materials that we may use.

In addition, throughout the next twelve months, we will invite
representatives from the waste management and energy production industries to
our facilities in order to conduct demonstrations of the Fuel Technology and our
recycling/processing plants.

Clyvia GmbH has entered into an agreement with Biotherm
Technologie AG (Biotherm) under which Biotherm has agreed to act as Clyvia
GmbHs worldwide sales agent. Biotherm will seek to generate sales for Clyvia
GmbHs products, will assist potential purchasers in arranging financing, and
will provide after sales servicing. In exchange, Clyvia GmbH has agreed to pay
Biotherm a commission of 20% of the base price for any Clyvia GmbH products
sold.

We anticipate spending approximately EUR 2,000,000 (approximately
  $3,116,240) in pursuing the above plan of operation over the next twelve months.
  We currently do not have sufficient working capital to meet our anticipated
  needs for the next twelve months. We have not earned any significant revenues
  to date and there are no assurances that we will be able to do so in the future.
  In addition, we can not provide any assurances that our actual working capital
  needs for the next twelve months will not exceed the amounts that we have estimated.
  If we require additional financing, it is anticipated that such additional financing
  will likely be in the form of equity financing, as we do not expect there to
  be substantial debt financing available to us at this stage of our business.

Currently, we do not have any additional financing arrangements
in place and there are no assurances that we will be able to obtain sufficient
additional financing if needed. If we are not able to obtain sufficient
financing, we may scale down our proposed plan of operation as necessary.

RESULTS OF OPERATIONS

Three Months and Six Months Summary

Three
        Months
      
      
      Percentage
      
      
      Six Months
      
      
      PercentageEnded July
      
      
      Ended July
      
      
      Increase /
      
      
      Ended July
      
      
      Ended July
      
      
      Increase /31,
        2008
      
      
      31,
        2007
      
      
      (Decrease)
      
      
      31,
        2008
      
      
      31,
        2007
      
      
      (Decrease)Revenue
      $
      Nil
      
      $
      Nil
      
      
      n/a
      
      $
      Nil
      
      $
      Nil
      
      
      n/aExpenses
      
      (365,617
      )
      
      (1,010,114
      )
      
      (63.8%)
      
      
      (680,453
      )
      
      (1,324,185
      )
      
      (48.6%)Other Items
      
      (57,854
      )
      
      (8,020
      )
      
      621.4%
      
      
      (57,365
      )
      
      12,761
      
      
      (549.5%)Net Loss
      $
      (423,471
      )
      $
      (1,018,134
      )
      
      (58.4%)
      
      $
      (737,818
      )
      $
      (1,311,424
      )
      
      (43.7%)


Revenue and Other Income

During the six months ended July 31, 2008, we earned income from
  processing waste of $48,151.

We are presently still in the development stage of our
business. To date, we have failed to earn significant income from our
operations. Classified under Other Items are nominal amounts that we have earned
from the processing of waste materials at our pilot plant located in
Wegberg-Wildenwrath, Germany. Also classified under Other Items as miscellaneous
income are nominal amounts earned by us for test runs conducted through our
pilot plant and for preparing quotes for potential purchasers. Although we have
entered into a number of distribution and sales agreements for
recycling/processing plants based on our Fuel Technology, we have not yet
completed the sale of any such plants, and there are no assurances that we will
be able to complete the sale of any of our products or earn significant revenues
in the future.

5

---

Operating Expenses

Our operating expenses for the three and six month periods
ended July 31, 2008 and 2007 consisted of the following:

Three
        Months
      
      
      Percentage
      
      
      Six Months
      
      
      PercentageEnded July
      
      
      Ended July
      
      
      Increase /
      
      
      Ended July
      
      
      Ended July
      
      
      Increase /31,
        2008
      
      
      31,
        2007
      
      
      (Decrease)
      
      
      31,
        2008
      
      
      31,
        2007
      
      
      (Decrease)Amortization
      $
      81,678
      
      $
      67,174
      
      
      21.6%
      
      $
      157,688
      
      $
      81,098
      
      
      94.4%Management Fees
      
      56,109
      
      
      69,646
      
      
      (19.4%)
      
      
      118,033
      
      
      137,121
      
      
      (13.9%)Professional Fees
      
      126,008
      
      
      165,645
      
      
      (23.9%)
      
      
      181,671
      
      
      232,021
      
      
      (21.7)%Other Operating Expenses
      
      111,506
      
      
      130,437
      
      
      (14.5%)
      
      
      224,967
      
      
      295,839
      
      
      (24.0%)Stock Based Compensation
      
      -
      
      
      577,156
      
      
      (100.0%)
      
      
      -
      
      
      577,156
      
      
      (100.0%)Foreign Exchange Loss (Recovery)
      
      (9,684
      )
      
      56
      
      
      (17,392.9%)
      
      
      (1,906
      )
      
      950
      
      
      (300.6%)Total Operating Expenses
      $
      365,617
      
      $
      1,010,114
      
      
      (63.8%)
      
      $
      680,453
      
      $
      1,324,185
      
      
      (48.6%)


Amortization expenses increased during the six months ended
July 31, 2008 due to the depreciation and amortization of our pilot plant.

Management fees represent amounts paid as compensation to our
executive officers and the executive officers of Clyvia GmbH during the
respective year-end periods. The decrease in management fees for the three and
six months ended July 31, 2008 is a result of the reclassification of amounts
paid to Dr. Manfred Sappok, a former managing director of Clyvia GmbH, to
professional fees. Dr. Sappok resigned as a managing director of Clyvia GmbH in
February 2008, but continues to act as a consultant to Clyvia GmbH. Clyvia GmbH
has agreed to pay Dr. Sappok a consulting fee equal to the management fees
previously paid to him.

Professional fees consist primarily of amounts incurred in
respect of consulting services related to the operation and development of our
business, investor relations services and legal and accounting services.

Other operating expenses consist primarily of amounts spent on
salaries and wages, advertising, and travel, as well as other miscellaneous
office expenses. During the six months ended July 31, 2008, other operating
expenses decreased due to reduced operating activities during the period.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital                      |   |               |   |   |                  |   |  |                       | 
|------------------------------------ | - | ------------- | - | - | ---------------- | - |  | --------------------- | 
|                                     |   | At            |   |   | At               |   |  | Percentage            | 
|                                     |   | July 31, 2008 |   |   | January 31, 2008 |   |  | Increase / (Decrease) | 
|Current Assets                       | $ | 43,800        |   | $ | 69,051           |   |  | (36.6%)               | 
|Current Liabilities                  |   | (2,609,496    | ) |   | (1,957,782       | ) |  | 33.3%                 | 
|Working Capital Surplus (Deficiency) | $ | (2,565,696    | ) | $ | (1,888,731       | ) |  | 35.8%                 | 

6

---

|Cash Flows                              |   |                                |   |   |          |  
|--------------------------------------- | - | ------------------------------ | - | - | -------- | -
|                                        |   | Six
      Months Ended July 31 |  
|                                        |   | 2008                           |   |   | 2007     |  
|Cash Flows used in Operating Activities | $ | (756,826                       | ) | $ | (306,648 | )
|Cash Flows used in Investing Activities |   | 16,301                         |   |   | (229,713 | )
|Cash Flows from Financing Activities    |   | 773,852                        |   |   | 257,907  |  
|Effect of Foreign Currency Translation  |   | (33,327                        | ) |   | 6,594    |  
|Net Decrease in Cash During Period      | $ | -                              |   | $ | (271,860 | )

As at July 31, 2008, we had bank indebtedness in the amount of
$55,696. Included in current liabilities are approximately $307,716 due to
related parties primarily on account of amounts owed for the purchase of plant
and equipment and unpaid management fees and reimbursable expenses. The increase
in our working capital deficit from our year ended January 31, 2008 is largely
attributable to the fact that our only significant sources of financing during
the period were short-term loans obtained from third parties and related
parties.

Financing Requirements

We anticipate that we will continue to incur losses for the
foreseeable future, as we expect to incur substantial product development,
marketing and/or operating expenses in implementing our plan of operation. Our
future financial results are uncertain due to a number of factors, many of which
are outside of our control. These factors include, but are not limited to:

|(a) | our ability to develop commercially marketable products
      based on the Fuel Technology;                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                              
|(b) | our ability to raise additional capital necessary to
      implement our business strategy and plan of operation;            
|    |                                                                                                                              
|(c) | our ability to compete with other existing technologies;
      and                                                           
|    |                                                                                                                              
|(d) | the success of any marketing and promotional campaign
      which we conduct for our products once development is
  complete.

The financial statements accompanying this Quarterly Report
contemplate our continuation as a going concern. However, we have sustained
substantial losses, have a limited operating history and are still in the
development stage of our business.

During the three months ended July 31, 2008, we received an
aggregate of EUR 64,000 ($99,729) in loans from BTec Holding AG (BTec) as
follows:

|(a) | EUR 35,000 ($54,539) with interest payable at a rate of
      10% per annum, payable after December 31, 2008 upon one months advance
      written notice;     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                 
|(b) | EUR 16,000 ($24,932) with interest payable at a rate of
      10% per annum, payable after September 14, 2008 upon one months advance
      written notice; and
|    |                                                                                                                                                                 
|(c) | EUR 13,000 ($20,258) with interest payable at a rate of
      10% per annum, payable after September 29, 2008 upon one months advance
      written notice.    

As collateral for these loans, our majority stockholder,
Inventa Holding GmbH (Inventa) has agreed to assign to BTec an aggregate of
446,000 shares of our common stock owned by Inventa.

In addition to these loans, BTec also paid to TriCon Immobilien
GmbH (TriCon) an aggregate of EUR 450,000 ($701,154) on our behalf. The
amounts paid by BTec included EUR 438,600 ($683,391) in loans and interest owed
by us to TriCon, plus an additional EUR 11,400 ($17,763) owed by us to TriCon
for

7

---

unpaid consulting fees. In consideration for the amounts paid
by BTec to TriCon, we agreed to repay the EUR 450,000 ($701,154) to BTec, with
interest at a rate of 5% per annum, after December 31, 2008 upon one months
advance written notice.

BTec currently owns a 40% interest in our majority stockholder,
Inventa. BTec currently has an agreement with TriCon to acquire an additional
12% interest in Inventa owned by TriCon. Under the terms of its agreement with
TriCon, BTec may direct the voting of the Inventa shares owned by TriCon until
such time as it has completed the purchase of those shares from TriCon or the
agreement is cancelled.

In addition to its agreement with TriCon, BTec has entered into
agreements with Dr. Sappok and Dieter Wagels, the managing director of Clyvia
GmbH, to acquire an additional 5.5% interest in Inventa from each of them.

Despite these financings, we currently do not have sufficient
working capital to meet our anticipated needs for the next twelve months. We
have not earned any significant revenues to date and there are no assurances
that we will be able to do so in the future. In addition, we can not provide any
assurances that our actual working capital needs for the next twelve months will
not exceed the amounts that we have estimated.

During the next twelve months, we anticipate that we will
continue to seek financing through private placement sales of our equity
securities as we do not expect to be able to meet all of our financial needs
through other methods of financing. Additional sales of our equity securities,
if needed, will dilute the interests of existing shareholders.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
generally accepted accounting principles in the United States of America
requires our management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. Our management routinely makes judgments and
estimates about the effects of matters that are inherently uncertain.

Our significant accounting policies are disclosed in Note 3 to
the financial statements included in this Quarterly Report.

ITEM
3.              
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM
4T.             CONTROLS
AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of July 31, 2008 (the Evaluation Date). This evaluation

8

---

was carried out under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer. Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were not effective as of
the Evaluation Date as a result of the material weaknesses in internal control
over financial reporting discussed below.

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in this report, we believe that our financial statements contained in
our Quarterly Report on Form 10-Q for the quarter ended July 31, 2008 fairly
present our financial condition, results of operations and cash flows in all
material respects.

Material Weaknesses

Management assessed the effectiveness of the Companys internal
control over financial reporting as of Evaluation Date and identified the
following material weaknesses:

Insufficient Resources:We have an inadequate number of
personnel with requisite expertise in the key functional areas of finance and
accounting.

Inadequate Segregation of Duties: We have an inadequate
number of personnel to properly implement control procedures.

Insufficient Written Policies & Procedures:We have
insufficient written policies and procedures for accounting and financial
reporting.

Inadequate Financial Statement Closing Process:We have
an inadequate financial statement closing process.

Lack of Audit Committee & Outside Directors on the
Companys Board of Directors:We do not have a functioning audit committee
and outside directors on the Companys Board of Directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures.

Changes in Internal Control over Financial Reporting

As of the Evaluation Date, there were no changes in our
internal control over financial reporting that occurred during the fiscal
quarter ended July 31, 2008 that have materially affected, or that are
reasonably likely to materially affect, our internal control over financial
reporting.

9

---

PART II - OTHER INFORMATION

ITEM
1.              
LEGAL PROCEEDINGS.

None.

ITEM
1A.             RISK
FACTORS.

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

Need For Financing

We currently do not have sufficient working capital to meet our
anticipated needs during the next twelve months. We have not earned any
significant revenues to date and there are no assurances that we will be able to
do so in the future. In addition, there are no assurances that our actual
working capital needs for the next twelve months will not exceed our estimates
of those needs. If our actual working capital requirements are substantially
greater than we have anticipated and/or we are not able to earn significant
revenues, then we may be required to seek additional financing. We currently do
not have any financing arrangements in place and there is no assurance that we
will be able to acquire sufficient financing on terms acceptable to us or at
all. If sufficient financing is not available when and if required, we may not
be able to meet our financial obligations as they become due, and our business
could fail.

We Are Still Testing And Refining The Fuel Technology And
The Pilot Plant

Although we have completed the construction of our pilot plant
and we have entered into agreements granting certain distribution rights and
sales licenses for recycling/processing systems based on our Fuel Technology, we
are still in the process of refining of the pilot plant and the Fuel Technology.
We have obtained independent certification that our Fuel Technology can produce
heating oil and diesel fuel that meets the requirements of European norms when
waste oils are used as the input material. We are currently working to obtain
certification with respect to the output fuel produced when plastics such as
polyethylene and polypropylene are used as the input material. There are no
assurances that our efforts in this regard will be successful. If we are unable
to obtain independent confirmation of our claims with respect to the pilot plant
and the Fuel Technology when using polyethylene and polypropylene as input
materials, this may adversely affect our ability to sell recycling/processing
plants based on that technology.

Although We Have Entered Into Sales And Distribution
Contracts For Fractional Depolymerization Plants Based On Our Fuel
Technology, We Have Not Yet Completed Any Sales Of Such Plants And There Are
No Assurances That We Will Be Able To Do So In The Future

Although we have entered into a number of sales and
distribution agreements, we have not yet completed the sale of any plants based
on our Fuel Technology. Our distributors do not have a binding obligation to
purchase our fractional depolymerization plants, although their agreements
provide that they will lose their distribution rights if they fail to sell any
such systems. There are no assurances that our distribution agreements will lead
to any future sales of our fractional depolymerization systems. Although we have
contracted with Biotherm to act as our sales agent, there are no assurances that
Biotherm will be able to generate any sales of our products.

Although Clyvia GmbH has reached a tentative agreement with NKW
Niederlausitzer Kompostwerke GmbH (NKW) for the sale of a CL 500 plant, NKW
has not yet placed a formal order for any plants based

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on our Fuel Technology due to financing difficulties. There is
no assurance that NKW will complete the purchase of any fractional
depolymerization plants from Clyvia GmbH.

Limited Operating History, Risks Of A New Business
Venture

Clyvia GmbH was formed on December 21, 2004, and as such, does
not have a lengthy operating history upon which future performance may be
assessed. We are a development stage company and potential investors should be
aware of the difficulties normally encountered by development stage enterprises
and the high rate of failure of such enterprises. The potential for future
success must be considered in light of the problems, expenses, difficulties
complications and delays encountered in connection with the development of a
business in the area in which we intend to operate and in connection with the
formation and commencement of operations of a new business in general. These
include, but are not limited to, unanticipated problems relating to research and
development programs, marketing, approvals by government agencies, competition
and additional costs and expenses that may exceed current estimates. There is no
history upon which to base any assumption as to the likelihood that our business
will prove to be successful, and there can be no assurance that we will generate
any significant operating revenues or ever achieve profitable operations.

Our Operations May Be Subject To Extensive Government
Regulations

Our operations are carried out through our wholly owned
subsidiary, Clyvia GmbH. Clyvia GmbH is based in Germany and its operations may
be subject to extensive government regulations in Europe or any other
jurisdiction in which products based on the Fuel Technology are marketed.
Municipal waste management and the production of diesel fuels and heating oils
are highly regulated industries and we may have to satisfy numerous mandatory
procedures, regulations, and safety standards established by federal and state
regulatory agencies in order to develop and market the Fuel Technology. The
extent to which these regulations may apply to us is not yet fully known and
there can be no assurance that we can successfully comply with all present or
future government regulations.

Rapid Technological Changes In The Alternative Fuels
Industry Could Make Our Products Obsolete

The alternative fuels industry in which we intend to compete is
characterized by rapid technological change and intense competition. New
technologies, products and industry standards will develop at a rapid pace which
could make our planned products obsolete. Our future success will depend upon
our ability to rapidly develop a working prototype of the Fuel Technology and to
commercialize and market products based on the Fuel Technology. In addition, we
will be required to introduce product enhancements to address the needs of our
customers. Delays in our ability to develop the Fuel Technology and products
based on the Fuel Technology may allow competitors to obtain a significant
advantage over us and may make it more difficult for us to develop our business.

Asserting And Defending Intellectual Property Rights May
Impact Results Of Operations

The success of our business may depend on our ability to protect
  our proprietary process and technology from competitors. Our pilot plant and
  the recycling/processing plants that we will attempt to sell are based on our
  own technology, for which we were granted a patent from the GPTO. An objection
  has been filed with the GPTO against our patent. Although we have filed an appeal
  against this objection, there is no assurance that our appeal will be granted.
  If we are unsuccessful in our appeal, we may lose our patent rights to the Fuel
  Technology. If this occurs, competitors may be able to copy our technologies.

Even if our appeal is granted, in the future we may be required
to defend our intellectual property rights through litigation. The financial
cost of such litigation could have a material impact on our financial condition
even if we are successful in developing and marketing products and in defending
any of our intellectual property rights, of which there is no assurance.
Furthermore, an adverse outcome in any litigation or interference proceeding
could subject us to significant liabilities to third parties and require us to
cease using the technology that is at issue or to license the technology from
third parties. In addition, a finding that any of our intellectual property
rights are invalid could allow competitors to more easily and

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cost-effectively compete. Thus, an unfavorable outcome in any
patent litigation or interference proceeding could have a material adverse
effect on our business, financial condition and results of operations.

We Intend To Operate In A Highly Competitive
Industry

The alternative energy market is an emerging market and is
constantly evolving. No single alternative source of diesel fuel or heating oil
has gained wide spread acceptance; however, a number of companies world wide are
attempting to develop alternative sources of energy and the market is highly
competitive. Our future success is dependent upon our ability to develop the
Fuel Technology as an effective, efficient and economical source of energy and
our ability to effectively market the Fuel Technology. There is no assurance
that we will be able to successfully do either of these things.

Even if we are successful in developing the Fuel Technology,
the Fuel Technology will compete direct with existing sources of oil such as
fossil fuels and with existing forms of municipal solid waste management. The
fossil fuel industry and the solid waste management industry are both well
established and dominated by companies with abundant technical, financial,
marketing, sales and other resources. If we are to succeed, we will need to
differentiate the benefits of the Fuel Technology from those marketed by
existing sources of oil and waste management processes. Even if we are able to
successfully differentiate the Fuel Technology, there is no assurance that the
Fuel Technology will be able to gain acceptance in the marketplace.

Dependence On Key Personnel

Our success will largely depend on the performance of our
management and on the management of Clyvia GmbH. We are currently dependent upon
a limited number of employees and consultants. As such, our success will also
depend on our ability to attract and retain highly skilled technical, research,
management, regulatory compliance, sales and marketing personnel. Competition
for such personnel is intense. The loss of the services of such personnel or the
inability to attract and retain other key personnel could impair the development
of our business, operating results and financial condition.

ITEM
2.              
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM
3.              
DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM
4.              
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM
5.              
OTHER INFORMATION.

Except as otherwise disclosed elsewhere in this Quarterly
Report, all information required to be disclosed in a Current Report on Form 8-K
during the period covered by this Quarterly Report has been previously disclosed
by the filing of such reports on Form 8-K.

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ITEM
6.              
EXHIBITS.

|Exhibit |  |                                                                                                                                                                           
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                                    
|3.1     |  | Articles of
        Incorporation.(1)                                                                                                                                     
|3.2     |  | Certificate of Change.(2)                                                                                                                                                 
|3.3     |  | Articles of
        Amendment changing name from Rapa Mining Inc. to Clyvia Inc. (5)                                                                                      
|3.4     |  | By-Laws.(1)                                                                                                                                                               
|10.1    |  | Management Services
        Agreement between Walter P.W. Notter and the Company dated effective as
        of June 30, 2005.(5)                                          
|10.2    |  | Amendment to Management Services
        Agreement between Walter P.W. Notter and the Company dated effective as
        of July 11, 2005.(5)                             
|10.3    |  | Exclusive Distribution
        Contract between Clyvia GmbH and Energy Recycling Systems Sarl (translated
        from German to English). (6)                            
|10.4    |  | Exclusive Distribution Contract
        between Clyvia GmbH and Grundstuecksgesellschaft FOCUS mbH & Co. Bau
        und Boden KG (translated from German to English). (6)
|10.5    |  | Letter Agreement
        amending the scope of non-exclusive distribution rights granted to Energy
        Recycling Systems Sarl (translated from German to English). (6)
|10.6    |  | 2005 Stock Option Plan.(4)                                                                                                                                                
|10.7    |  | 2006 Stock Option
        Plan.(7)                                                                                                                                        
|10.8    |  | Employment Contract between
        Clyvia GmbH and Manfred Sappok (translated from German to English).(7)                                                                
|10.9    |  | Letter from
        Clyvia GmbH to Manfred Sappok  Salary Increase (translated from
        German to English). (8)                                                      
|10.10   |  | Amendment Agreement to Employment
        Contract between Clyvia GmbH, Manfred Sappok and Clyvia Inc. (8)                                                                
|10.11   |  | Employment Contract
        between Clyvia GmbH and Dieter Wagels (translated from German to English).(7)                                                                 
|10.12   |  | Amendment Agreement to Employment
        Contract between Clyvia GmbH, Dieter Wagels and Clyvia Inc.(8)                                                                  
|10.13   |  | Loan Agreement
        dated January 3, 2008 for EUR 28,000 between DAST GmbH (as lender) and
        Clyvia Technology GmbH (as borrower).(9)                            
|10.14   |  | Loan Agreement dated April 1,
        2008 for EUR 200,000 between Inventa Holding GmbH (as lender) and Clyvia
        Technology GmbH (as borrower).(9)                  
|10.15   |  | Loan Agreement
        dated April 2, 2008 for EUR 15,000 between Inventa Holding GmbH (as lender)
        and Clyvia Technology GmbH (as borrower).(9)                   
|10.16   |  | Loan Agreement dated April 24,
        2008 for EUR 100,000 between BTec Holding AG (as lender) and Clyvia Technology
        GmbH (as borrower).(9)                      
|10.17   |  | Loan Agreement
        dated May 31, 2008 for EUR 35,000 between BTec Holding AG (as lender)
        and Clyvia Technology GmbH (as borrower).(9)                         
|10.18   |  | Management Consulting Agreement
        between the Company and John Boschert dated effective as of September
        3, 2008.(10)                                        
|10.19   |  | Loan
        Agreement dated June 16, 2008 for EUR 16,000 between BTec Holding AG (as
        lender) and Clyvia Technology GmbH (as borrower).                           
|10.20   |  | Loan
        Agreement dated July 1, 2008 for EUR 13,000 between BTec Holding AG (as
        lender) and Clyvia Technology GmbH (as borrower).                            
|14.1    |  | Code of Ethics.(3)                                                                                                                                                        
|31.1    |  | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                
|32.1    |  | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.                

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|Notes: |                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------
|(1)    | Filed with the SEC as an exhibit to our Registration
      Statement on Form SB-2 originally filed on March 16, 2004.
|(2)    | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 18, 2005.                 
|(3)    | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on May 2, 2005.                     
|(4)    | Filed with the SEC as an exhibit to our Registration
      Statement on Form S-8 filed on August 25, 2005.           
|(5)    | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on September 23, 2005.           
|(6)    | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on May 16, 2006.                    
|(7)    | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on August 28, 2006.                   
|(8)    | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on September 14, 2006.           
|(9)    | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-K filed on June 16, 2008.                     
|(10)   | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 4, 2008.                 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |                    |  |     | CLYVIA INC.                                              
|----- | ------------------ |  | --- | ---------------------------------------------------------
|      |                    |  |     |                                                          
|      |                    |  |     |                                                          
|      |                    |  |     |                                                          
|Date: | September 22, 2008 |  | By: | /s/
      John Boschert                                  
|      |                    |  |     | JOHN BOSCHERT                                            
|      |                    |  |     | Chief Executive Officer and Chief Financial
      Officer
|      |                    |  |     | (Principal Executive Officer                             
|      |                    |  |     | and Principal Accounting Officer)                        

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