SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


____________________________





FORM 10-Q





x QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES


EXCHANGE ACT OF 1934




For the Quarter Ended January 31, 2011




OR





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


FOR THE TRANSITION PERIOD FROM _______________________ TO _______________________





Commission File # 000-52035





CLEAN POWER CONCEPTS INC.


(Exact name of registrant as specified in its charter)





Nevada


(State or other jurisdiction of incorporation or organization)





98-0490694


(IRS Employer Identification Number)





1620 McAra Street


Regina, Saskatchewan, Canada        S4N 6H6


(Address of principal executive offices) (Zip Code)





(306) 546-8327


(Registrant’s telephone no., including area code)








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




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated file, or a smaller reporting company.




Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o
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 o   No x




The issuer had 240,077,763 shares of common stock issued and outstanding as of March 22, 2011.












Table of Contents





CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES






Table ofContents




PagePART I. Financial InformationItem 1. Financial Statements.Consolidated Balance Sheets at January 31, 2011 (unaudited) and April 30, 2010 (audited)
1Unaudited Consolidated Statements of Operations for the three and nine month periods ended January 31, 2011 and January 31, 2010
2Unaudited Consolidated Statements of Cash Flows for the nine month periods ended January 31, 2011 and January 31, 2010
3Notes to Unaudited Consolidated Financial Statements
5Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
12Item 3. Quantitative and Qualitative Disclosures about Market Risk
26Item 4. Controls and Procedures
26PART II. Other Information
28Item 1. Legal Proceedings
28Item 1a. Risk Factors
28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
35Item 3. Defaults Upon Senior Securities
35Item 4. Submission of Matters to a Vote of Security Holders
35Item 5. Other Information
35Item 6. Exhibits
35Signatures
36









Table of Contents





PART I – FINANCIAL INFORMATION




ITEM 1.  FINANCIAL STATEMENTS





Period Ended January31, 2011


CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Consolidated Balance Sheets




(UNAUDITED)

January 31,

2011


April 30,

2010ASSETSCurrent AssetsCash

$
26,998


$
36,262Accounts receivable


390,088



191,331Prepaid expenses


4,834



22,031Inventory


17,247



124,797Total current assets


439,167



374,421Property, Plant, and Equipment(net of accumulated depreciation)


458,278



451,407Total assets

$
897,445


$
825,828LIABILITIES AND STOCKHOLDERS’ (DEFICIT)Current LiabilitiesLine of credit


59,739



97,624Accounts payable and accrued expenses


760,133



626,416Related party advances (Note 5)


847,961



714,763Loans payable (Note 6)


772,610



425,900Interest payable (Note 6)


56,656



118,781Current portion of capital lease obligations


15,368



21,154Current portion of long-term debt


21,491



18,077Total current liabilities

$
2,533,958


$
2,022,715Long-Term LiabilitiesCapital lease obligations


75,473



20,036Long-term debt


220,934



228,961Total long-term liabilities


296,407



248,997Total liabilities

$
2,830,365


$
2,271,712Commitments and Contingencies


-



-Stockholders’ (Deficit)Common shares, 1,000,000,000 shares with par value $0.001authorized, 240,077,763 and 150,048,000 shares issued and outstanding at January 31, 2011 and April 30, 2010, respectively (Note 9)


240,078



150,048Common shares subscribed but not issued (Note 9)


20,000



2,019,459Share subscriptions


-



(994
)Paid-in Capital


1,081,288



(759,023
)Accumulated deficit


(2,929,332
)


(2,524,685
)Accumulated other comprehensive (loss)


(198,745
)


(196,500
)Total Clean Power Concepts and Subsidiaries equity


(1,786,711
)


(1,311,695
)Non-Controlling Interest (Note 2)


(135,339
)


(123,411
)Non-Controlling Interest accumulated other comprehensive (loss)


(10,870
)


(10,778
)Total Non-Controlling Interest


(146,209
)


(134,189
)Total stockholders’ (deficit)


(1,932,920
)


(1,445,884
)Total liabilities and stockholders’ (deficit)

$
897,445


$
825,828











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




1
 Table of Contents








CLEAN POWER CONCEPTS INC. AND SUBSIDIARIES





Consolidated Statements of Operations and Comprehensive Income


(UNAUDITED)





Three Months

ended

January 31,

2011


Three Months

ended

January 31,

2010


NineMonths

ended

January 31,

2011


NineMonths

ended

January 31,

2010SALES:Canola Meal

$
141,982


$
-


$
352,964


$
-Canola Oil


72,018



8,563



288,215



27,026Other


7,732



58,957



23,624



230,510Total Revenue


221,732



67,520



664,803



257,536COST OF SALES


(168,160
)


(16,190
)


(502,586
)


(79,499
)GROSS PROFIT

$
53,572


$
51,330


$
162,217


$
178,037EXPENSES:Production expenses


33,971



-



80,276



31,526General and Administrative expenses


72,002



24,309



378,282



116,464Depreciation


30,944



50,953



77,535



162,594Salaries and wages


132,305



46,170



139,294



89,941Professional and consultant fees


77,143



2,631



120,426



22,366Advertising


15,413



13,828



36,524



20,646Investor relations


18,086



6,534



26,836



8,216Total expenses

$
379,864


$
144,425


$
859,173


$
451,753Net loss from operations

$
(326,292
)

$
(93,095
)

$
(696,956
)

$
(273,716
)Interest expense


(28,855
)


(16,789
)


(98,894
)


(42,510
)Other Income:

Scientific Research & Experimental Development Tax Refund


379,275



-



379,275



-NET INCOME (LOSS)

$
24,128


$
(109,884
)

$
(416,575
)

$
(316,226
)Less: Net Loss attributable to Non-Controlling Interest (Note 2)


(4,655
)


3,954



11,928



16,034Equals:

Net Loss attributable to Clean Power Concepts and Subsidiaries (Note 2)


19,473



(105,930
)


(404,647
)


(300,192
)Loss per common share (Note 2), basic and diluted

$
0.00


$
(0.00
)

$
(0.00
)

$
(0.00
)Weighted average shares outstanding (Note 2)


238,925,175



150,048,000



236,526,948



150,048,000


(continued)











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


2
 Table of Contents





CLEAN POWER CONCEPTS INC. AND SUBSIDIARIES





Consolidated Statements of Operations and Comprehensive Income


(UNAUDITED)





(continued)


Three Months

ended

January 31,

2011


Three Months

ended

January 31,

2010


NineMonths

ended

January 31,

2011


NineMonths

ended

January 31,

2010OTHER COMPREHENSIVE INCOME (LOSS)Net Income (loss)

$
24,128


$
(109,884
)

$
(416,575
)

$
(316,226
)Foreign currency translation adjustment


14,953



3,631



(2,337
)


(64,138
)Other Comprehensive Income (Loss)

$
39,081


$
(106,253
)

$
(418,912
)

$
(380,364
)Less: Net Loss attributable to Non-Controlling Interest (Note 2)


(4,655
)


4,124



11,928



12,883Less: Foreign currency translation adjustment attributable to Non-Controlling Interest (Note 2)


(706
)


(170
)


92



3,151Equals: Other comprehensive income (loss) attributable to Clean Power Concepts and Subsidiaries (Note 2)

$
33,720


$
(102,299
)

$
(406,892
)

$
(364,330
)



























































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


3
 Table of Contents





CLEAN POWER CONCEPTS INC. AND SUBSIDIARIES





Consolidated Statements of Cash Flows


(UNAUDITED)





Nine Months

ended

January 31,

2011


Nine Months

ended

January 31,

2010Cash flows from operating activities:Net Income (Loss) for period

$
(416,575
)

$
(316,226
)Reconciling adjustments:Adjustments to reconcile net loss tonet cash used in operating activities:Depreciation


77,535



162,594Net change in operating assets and liabilities:Accrued interest on loans


56,656



42,510Prepaid expenses


17,197



4,789Accounts payable and accrued expenses


120,618



120,932Accounts receivable


(198,757
)


(81,004
)Inventory


2,802



1,694Net cash (used) by operating activities


(340,524
)


(64,711
)Cash flows from investing activities:Purchases of property, plant and equipment


(6,871
)


(626,848
)Net cash (used) by investing activities


(6,871
)


(626,848
)Cash flows from financing activities:Proceeds from common shares issued for cash


-



494,362Proceeds from common shares subscribed but not issued


20,000Proceeds provided by loans


227,929



-Principal repayments toward capital leases


-



(657
)Proceeds provided by long-term debt


-



19,885Principal repayments toward long-term debt


(4,613
)


-Proceeds provided by Line of Credit


-



14,546Payments toward Line of Credit


(37,885
)


-Proceeds provided by related party advances


133,198



187,040Net cash provided by financing activities


338,629



715,176Effect of foreign currency exchange rates on cash


(498
)


(64,138
)Net increase (decrease) in cash


(9,264
)


(40,521
)Cash, beginning of period


36,262



41,766Cash, end of period


26,998


$
1,245
















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


4
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CLEAN POWER CONCEPTS INC. AND SUBSIDIARIES




Consolidated Supplemental Disclosure of Non-cash Investing and Financing Activities








NineMonths

ended

January 31,

2011


NineMonths

ended

January 31,

2010Shares issued for purchase of inventory included in COGS

$
104,748



-Shares issued for account payable settlements


12,000



-










































































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


5
 Table of Contents





CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)






Note 1 – Basis of Presentation





Clean Power Concepts Inc. was incorporated in the State of Nevada on October 17, 2005. On October 28, 2005, we incorporated a British Columbia company named Loma Verde Explorations Ltd. as a wholly owned subsidiary and, on April 29, 2010, we  acquired 94.8% of General Bio Energy Inc., a Saskatchewan Corporation as our primary operating subsidiary. During the period ended January 31, 2011, we also acquired additional General Bio Energy Inc. shares which increased our share of the subsidiary to 95.1%. The consolidated audited financial statements included herein have been prepared by Clean Power Concepts Inc. and its subsidiaries, General Bio Energy Inc. and Loma Verde Explorations Ltd. (collectively “Clean Power”, “We”, the “Registrant”, or the “Company”), in accordance with accounting principles generally accepted in the United States. Our financial statements are presented on a consolidated basis and include all accounts of Clean Power Concepts Inc., General Bio Energy Inc. and Loma Verde Explorations Ltd. and eliminate all intercompany balances.





Since inception the Company has not been involved in any bankruptcy, receivership or similar proceedings and the reclassification, consolidation, or merger arrangements in which the Company has been involved are as follows: (i) The Company was originally incorporated in Nevada as Loma Verde Inc. on October 17, 2005. On March 22, 2007, the Company incorporated a wholly owned subsidiary named Clean Power Concepts Inc. in Nevada and by agreement effective April 2, 2007, Clean Power Concepts, Inc. was merged into the Company for the sole purpose of changing the name of the Company. We then became the surviving entity with the name Clean Power Concepts Inc. In conjunction with the aforementioned merger, the Company forward split its authorized, issued and outstanding common stock on a 56 new for 1 old basis. On October 26, 2009, the Company decreased its authorized common shares limit from 11,200,000,000 to 1,000,000,000; and (ii) Through a share exchange agreement executed on April 29, 2010, incorporated herein by reference (the ‘Exchange Agreement’), we  acquired 94.8% of the issued and outstanding  common shares of General Bio Energy Inc. (‘GBE’), a Saskatchewan Corporation, in return for issuance (the ‘Exchange’) of 28,426,612 restricted shares of our common stock (the ‘Shares’) based on a ratio of 18.21 common shares of Clean Power for each 1.00 share common share of GBE submitted for exchange. The Shares have not been  registered  under the Securities Act of 1933, as amended (the  "Securities Act") are be deemed "restricted"  securities under the Securities Act and may not be sold or  transferred  other than  pursuant to an  effective  registration statement  under  the  Securities  Act or any  exemption  from the  registration requirements of the Securities Act.





The Company was originally organized for the purpose of acquiring and developing mineral properties and was therefore considered to be in the pre-exploration stage. Mineral claims with unknown reserves were acquired, but the Company did not establish the existence of commercially mineable ore deposits and determined it should abandon its mineral claims and pursue other business opportunities, one of which was the alternative energy business. On April 29, 2010 we acquired General Bio Energy Inc. through a reverse merger and are currently operating a business focused on the environmentally friendly green energy industry. General Bio Energy Inc. (“GBE”) was incorporated in the Province of Saskatchewan on February 14, 2006. GBE was originally named Canadian Green Fuels Inc. and changed its name to General Bio Energy Inc. on September 18, 2008. GBE commenced its pre-production stage on May 1, 2006 and began selling products in July 2008. From 2008 to 2010, GBE has continued to develop, research, and test its pilot production equipment, and refine its alternative energy technology. The Company is a producer of a range of products manufactured by crushing fuel grade oilseed. The Company’s production facility and head office is located in Regina, Saskatchewan.

















6
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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)








Effective with the execution of our reverse merger on April 29, 2010, we changed our fiscal year end from June 30th to April 30th. These financial statements are presented in US Dollars.





The Company’s common stock is publicly traded in the NASD Over-The-Counter Market under the symbol “CPOW”.





The consolidated unaudited financial statements included herein have been prepared the Company in accordance with accounting principles generally accepted in the United States for interim financial information. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the April 30, 2010 audited financial statements and the accompanying notes included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The results of operations for the interim periods are not necessarily indicative of the results for the full year. In management’s opinion all adjustments necessary for a fair presentation of the Company’s financial statements are of a normal recurring nature and are reflected in the interim periods included.








Note 2 – Summary of Significant Accounting Policies





This summary of significant accounting policies is presented to assist in understanding Clean Power’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements, which are stated in U.S. Dollars.





The financial statements reflect the following significant accounting policies:





Consolidation of Financial Statements





These financial statements include the accounts of the Company and its subsidiaries General Bio Energy Inc. and Loma Verde Explorations Ltd. on a consolidated basis. All inter-company accounts have been eliminated.





Revenue Recognition





The Company recognizes revenue from the sale of bio-diesel, additives, canola meal, and canola oil, when evidence of an arrangement exists, the product has been shipped, and the price to the buyer has been determined.





Inventory





Inventory is valued at the lower of cost or net realizable value. Cost is determined by the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs.














7
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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)








Non-Controlling Interest





As required by GAAP, the Consolidated Balance Sheet and Consolidated Statements of Operations of these financial statements include the allocation to ‘Non-Controlling Interest’ of a proportionate share of the Company’s net losses relating to the 4.9% ownership interest in General Bio Energy Inc. which is not owned by the Company.





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts 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 period. Actual results could differ from those estimates.





Earnings or (Loss) per Share





Basic loss per share is calculated by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period. The denominator in this calculation is adjusted to reflect any stock splits or stock dividends.





Diluted loss per share is calculated using the treasury method which requires the calculation of diluted loss per share by assuming that any outstanding stock options with an average market price that exceeds the average exercise prices of the options for the year, are exercised and the assumed proceeds are used to repurchase shares of the Company at the average market price of the common shares for the year. An incremental per share effect is then calculated for each option. The denominator of the diluted loss per share formula is the number common shares outstanding at balance sheet date plus the incremental shares assumed to be issued from treasury for option exercises, less the number of shares assumed to be repurchased, weighted by the period they are assumed to be outstanding. This dilution calculation did not affect current fiscal year results because the Company does not have an Option Plan and has not issued any stock options.





Fair Value of Financial Instruments





The carrying value of the Company’s financial instruments reflected in the financial statements approximates fair value due to the short-term maturity of the instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.





Income Taxes





The Company follows the asset and liability method of accounting for future income taxes. Under this method, future income tax assets and liabilities are recorded based on temporary differences between the carrying amount of balance sheet items and their corresponding tax bases. In addition, the future benefits of income tax assets, including unused tax losses, are recognized, subject to a valuation allowance, to the extent that it is more likely than not that such future benefits will ultimately be realized. Future income tax assets and liabilities are measured using substantively enacted tax rates and laws expected to apply when the tax liabilities or assets are to be either settled or realized.














8
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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)








Foreign Currency





The consolidated books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency. The books of General Bio Energy Inc. are maintained in Canadian Dollars and the consolidation of GBE into the Company results in foreign currency translation adjustments which are recognized as other comprehensive income. Transactions denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statements of Operations:





(i)
Monetary items are recorded at the rate of exchange prevailing as at the balance sheet date;


(ii)
Non-Monetary items including equity are recorded at the historical rate of exchange; and


(iii)
Revenues and expenses are recorded at the period average in which the transaction occurred





Cash and Cash Equivalents





The Company considers cash and cash equivalents to consist of cash on hand and demand deposits in banks with an initial maturity of 90 days or less.





Risks and Uncertainties





The Company is subject to substantial business risks and uncertainties inherent in starting a new business. There is no assurance the Company will be able to generate sufficient revenues or obtain sufficient funds necessary to succeed in its new business venture.





Allowance for doubtful accounts





The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments.  The Company determines its reserves by specific identification of customer accounts.  If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances could possibly be required.





Property, Plant, and Equipment





Capital assets are recorded at cost. Depreciation is recorded based on estimated useful lives of assets at time of acquisition.





Comprehensive income (loss)





Comprehensive income (loss) includes all changes in equity of the Company. Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) comprises revenues, expenses, gains and losses that, in accordance with United States generally accepted accounting principles, require recognition, but are excluded from net income (loss). The books of General Bio Energy Inc. are maintained in Canadian Dollars and the consolidation of GBE into the Company results in foreign currency translation adjustments which are recognized as other comprehensive income.





Reclassifications





Certain prior period amounts have been reclassified to conform with current period presentation.














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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)






Recent Accounting Pronouncements





Various accounting pronouncements have been issued during 2010 and 2009, none of which are expected to have a material effect on the financial statements of the Company.





Other





The Company consists of one reportable business segment.





The Company's assets with carrying value are located in Canada.





Advertising is expensed as it is incurred.





We did not have any off-balance sheet arrangements as at January 31, 2011.








Note 3 – Going Concern





Generally accepted accounting principles in the United States of America contemplate the continuation of the Company as a going concern. However, the Company has accumulated operating losses since its inception and has limited business operations, which raises substantial doubt about the Company’s ability to continue as a going concern. During the nine month period ended January 31, 2011, the net loss attributable to Clean Power Concepts Inc. and Subsidiaries was $(404,647). The continuation of the Company is dependent upon the continuing financial support of investors and stockholders of the Company. As of January 31, 2011 we projected the Company would need additional cash resources to operate during the upcoming 12 months and would raise this capital through private placements of our common shares and advances from our President. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.








Note 4 – Line of Credit





GBE established a line of credit with a supplier for input stock. The line of credit has a maximum limit of $198,807. The line of credit has an interest rate of 10%, and is unsecured. The line of credit is repayable on demand. The balances due on the line of credit were $59,739 and $97,624 respectively for the nine months ended January 31, 2011 and the year ended April 30, 2010.








Note 5 – Related Party Advances





At January 31, 2011 the Company had related party advances owing to two related parties totaling $847,961. These


advances are uncollateralized, have no fixed repayment dates, do not accrue interest, and are callable at any time. During the nine months ended January 31, 2011 related party advances increased by $133,198.














10
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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)








Note 6 – Loans and Interest Payable





At January 31, 2011, the Company had loans outstanding from three individuals totaling $90,438. These loans are uncollateralized, have no fixed repayment date, are callable at any time and have interest rates of 12% calculated on a daily basis. During the nine months ended January 31, 2011 interest of $7,920 accrued to these loans and this amount was added to interest payable on the balance sheet.





At January 31, 2011, the Company had a loan payable and interest payable to a private company which totaled $666,681 and $48,736 respectively. This loan is uncollateralized, accrues interest at 10% per annum, is payable on demand and has no fixed repayment date. During the period ended January 31, 2011, three lenders who had balances owing by the Company assigned their loans to another lender. This restructuring consolidated a total principal balance of $425,900 owed to the three lenders and a corresponding interest payable balance of $118,781 debt which was outstanding at year end into a beginning balance for the new lender of $544,681. During the period ended January 31, 2011, the new lender also advanced $122,000 to the Company. Loans payable also include a bank loan payable of $13,392 and a supplier note payable of $2,099.








NOTE 7 – Long-term debt and Capital Lease Obligations





Description of loan

Interest rate

Repayment terms

Maturity date

Principal BalanceLoan 1 - first security interest in all present and acquired personal property.  Seventy five percent of the outstanding balance has been personally guaranteed by shareholders.

Fixed interest rate of 9.6%

Interest is to be paid monthly.  Principal repayments of $2,315 per month commence November 2009.

October 2018

$
240,775Loan 2 - first security interest in all present and acquired personal property.  Seventy five percent of the outstanding balance has been personally guaranteed by shareholders.

Variable interest rate of base plus 1%.  The rate was 5.75% as of April 30, 2010

Interest is to be paid monthly.  Principal repayments of $165 per month commence February 2008.

January 2013

$
1,650Less: current portion



$
21,491Long-term



$
220,934Total long-term debt

$
242,425





























11
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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)








Future minimum lease payments on obligation under capital leases are as follows:





Year

$2011


15,3682012


27,2302013


27,2302014


27,229Totals

$
97,057Less:  imputed interest

$
6,216Less:  current portion

$
15,368Long-term

$
75,473











Note 8 – Related Party Transactions





Compensation of $139,294 was accrued to management and human resources salaries during the nine months ended January 31, 2011. During the period, the following transactions with related entities / persons were also conducted:





(i)       The Company occupies leased premises subject to minimum monthly rent of $2,794. The premises are leased from a corporation controlled by a group of GBE shareholders. $61,243 was accrued for rent up to the period ended January 31, 2011. A rent payment of $28,755 was paid to the related Company during the period ended January 31, 2011.





(ii)      At January 31, 2011 the Company had related party advances owing to two related parties totaling $847,961. These advances are uncollateralized, have no fixed repayment dates, do not accrue interest, and are callable at any time. During the nine months ended January 31, 2011 related party advances to the Company increased by $133,198.








Note 9 – Common Shares and Common Shares Subscribed but Not Issued





Common Shares


The Company’s common stock is traded in the NASD Over-The-Counter Market under the symbol “CPOW”.




At the year-end balance sheet date of April 30, 2010, the Company had not issued shares arising from a share exchange agreement executed on April 29, 2010 and these share balances were recorded as shares subscribed but not issued. During the nine month period ended January 31, 2011 these shares were issued, which had the effect of increasing the issued and outstanding share capital of the Company from 50,0160,000 shares to 78,442,612 shares.





Stock Dividend


On November 18, 2010, the Company declared a two (2) share for every one (1) share stock dividend, which resulted in an increase of the Company’s issued and outstanding share capital from 78,442,612 shares to 240,077,763 shares of common stock, including the effect of the share issuances which occurred between declaration of the stock dividend and payment date. The Record Date for the stock dividend was the 30th day of November, 2010; and the Payment Date, approved by FINRA, was the 6th day of December, 2010. The Corporation did not issue fractional shares but instructed its transfer agent to round up to one for any fractional interest which resulted from the stock dividend. Dividend Stock Certificates were mailed out on, or around, December 6, 2010.











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CLEAN POWER CONCEPTS INC. AND SUBSIDIAIRIES





Notes to Consolidated Financial Statements


(Unaudited)






All share references in these financial statements have been retroactively adjusted for this stock dividend.




Debt and post share exchange conversions


During the period ended January 31, 2011, two GBE shareholders who had not participated in the share exchange on April 29, 2010, offered to exchange their GBE shares for shares of the Company on the same terms as the share exchange. The Company accepted these offers and on November 26, 2010, issued 273,060 restricted common shares of the Company in exchange for an additional 0.03% of the previously outstanding shares of GBE.
  During the period ended January 31, 2011, two debt conversions offers were accepted by the Company which resulted in the issuance of 4,476,774 restricted common shares of the Company in exchange for cancelation of a total of $104,748 related to payment for inventory recorded in Cost of Goods Sold and $12,000 for an account payable related to a service provider.
  Common Shares Subscribed but not issued
 At the balance sheet date of January 31, 2011, the Company had not issued shares arising from a private placement totaling $20,000 and this share balance was recorded as shares subscribed but not issued.
   Note 10 – Commitments and Contingencies
  On October 9, 2009, Shafer Commodities Inc. of Vancouver, BC, Canada filed a Statement of Claim for $24,345 in the Court of Queen's Bench Saskatoon against General Bio Energy Inc. pursuant to an invoice dispute. In respect of this matter, General Bio Energy is the plaintiff in a counterclaim against Shafer Commodities Inc. of Vancouver, BC, Canada in respect to an amount of $68,171 owed by Shafer Commodities to General Bio Energy Inc. A court date to settle this matter has not yet been set.
   Note 11 – Subsequent Event
  On February 17, 2011, the Company received confirmation from Canada Revenue Agency that its claim for a refund, as filed on October 29, 2009, relating to a Canadian Government sponsored Scientific Research and Experimental Development (‘SR&ED’) program had been approved. This resulted in the recognition of other income and an account receivable of $379,275. Additionally, expenses and an account payable of $75,855 were recorded relating to consultant services arising from preparation and administration of the claim. These amounts have been recorded in these financial statements.































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ITEM 2. MANAGEMENTS’ DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





This quarterly report on Form 10-Q contains "forward-looking statements" relating to the registrant which represent the registrant's current expectations or beliefs including, statements concerning registrant’s operations, performance, financial condition and growth. For this purpose, any statement contained in this quarterly report on Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "anticipation", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel and variability of quarterly results, ability of registrant to continue its growth strategy and competition, certain of which are beyond the registrant's control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.





Overview





Clean Power Concepts Inc. was incorporated in the State of Nevada on October 17, 2005. On October 28, 2005, we incorporated a British Columbia company named Loma Verde Explorations Ltd. as a wholly owned subsidiary and, on April 29, 2010, we  acquired 94.8% of General Bio Energy Inc., a Saskatchewan Corporation as our primary operating subsidiary. The consolidated audited financial statements included herein have been prepared by Clean Power Concepts Inc. and its subsidiaries, General Bio Energy Inc. and Loma Verde Explorations Ltd. (collectively “Clean Power”, “We”, the “Registrant”, or the “Company”), in accordance with accounting principles generally accepted in the United States. Our financial statements are presented on a consolidated basis and include all accounts of Clean Power Concepts Inc., General Bio Energy Inc. and Loma Verde Explorations Ltd. and eliminate all intercompany balances. In management’s opinion all adjustments necessary for a fair presentation of the Company’s financial statements are of a normal recurring nature and are reflected in the periods included.





Since inception the Company has not been involved in any bankruptcy, receivership or similar proceedings and the reclassification, consolidation, or merger arrangements in which the Company has been involved are as follows: (i) The Company was originally incorporated in Nevada as Loma Verde Inc. on October 17, 2005. On March 22, 2007, the Company incorporated a wholly owned subsidiary named Clean Power Concepts Inc. in Nevada and by agreement effective April 2, 2007, Clean Power Concepts, Inc. was merged into the Company for the sole purpose of changing the name of the Company. We then became the surviving entity with the name Clean Power Concepts Inc. In conjunction with the aforementioned merger, the Company forward split its authorized, issued and outstanding common stock on a 56 new for 1 old basis. On October 26, 2009, the Company decreased its authorized common shares limit from 11,200,000,000 to 1,000,000,000; and (ii) Through a share exchange agreement executed on April 29, 2010, incorporated herein by reference (the ‘Exchange Agreement’), we  acquired 94.8% of the issued and outstanding  common shares of General Bio Energy Inc. (‘GBE’), a Saskatchewan Corporation, in return for issuance (the ‘Exchange’) of 28,426,612 restricted shares of our common stock (the ‘Shares’) based on a ratio of 18.21 common shares of Clean Power for each 1.00 share common share of GBE submitted for exchange. The Shares have not been  registered  under the Securities Act of 1933, as amended (the  "Securities Act") are be deemed "restricted"  securities under the Securities Act and may not be sold or  transferred  other than  pursuant to an  effective  registration statement  under  the  Securities  Act or any  exemption  from the  registration requirements of the Securities Act.





The Company was originally organized for the purpose of acquiring and developing mineral properties and was therefore considered to be in the pre-exploration stage. Mineral claims with unknown reserves were acquired, but the Company did not establish the existence of commercially mineable ore deposits and determined it should abandon its mineral claims and pursue other business opportunities, one of which was the alternative energy business. On April 29, 2010 we acquired











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General Bio Energy Inc. through a reverse merger and are currently operating a business focused on the environmentally friendly green energy industry. General Bio Energy Inc. (“GBE”) was incorporated in the Province of Saskatchewan on February 14, 2006. GBE was originally named Canadian Green Fuels Inc. and changed its name to General Bio Energy Inc. on September 18, 2008. GBE commenced its pre-production stage on May 1, 2006 and began selling products in July 2008. From 2008 to 2010, GBE has continued to develop, research, and test its pilot production equipment, and refine its alternative energy technology. The Company is a producer of a range of products manufactured by crushing fuel grade oilseed. The Company’s production facility and head office is located in Regina, Saskatchewan.





Effective with the execution of our reverse merger on April 29, 2010, we changed our fiscal year end from June 30th to April 30th. These financial statements are presented in US Dollars.





The Company’s common stock is publicly traded in the NASD Over-The-Counter Market under the symbol “CPOW.





New operations based on acquisition of General Bio Energy Inc.





Present Operations





The Company’s subsidiary, General Bio Energy Inc. (‘GBE’), operates a fully integrated commercial oilseed crushing, bio-diesel refinery, and environmental lubricants manufacturing and bottling, and nutraceutical and food processing plant in Regina, Saskatchewan. The current plant has a crush capacity of 19.7 million liters of crushed oil annually. Its biodiesel fuel processor can produce up to 20 million liters of biofuel and biofuel additives and the crushing system can produce nearly 32.8 thousand metric tonnes of meal and protein related products for agricultural and aquaculture feedstock annually. The plant is capable of specialty and toll crushing a wide variety of oil seeds.





In 2006, GBE was formed under the name of Canadian Green Fuels Inc., with the intention to provide a Saskatchewan based alternative fuel to an emerging North American market. Using Canola or camelina as its preferred input stock, it sought to create a market niche by adapting its process to off-grade oil seed. This method of production improved the financial viability of the company and allowed it to develop product innovations based on its value-added production.





For most of 2009, the company crushed camelina on a toll basis for Sustainable Oils, who are currently supplying the U.S. Military with camelina based bio-jet fuel.





GBE entered development stage through a small crushing capacity with five crushers and a prototype biofuel processor that allowed the company to produce either feedstock based canola oil or biodiesel. GBE has developed, and also licenses, proprietary processes which allow the company to pursue its vision of being “green” manufacturing facility with minimal effluents, using a methods which are emissions friendly and do not use a water-wash system. This biofuel production method also gave birth to the development of additives and value-added products such as its MOPO brand of biodiesel based diesel fuel lubricants and conditioners, penetrating sprays, dust suppressants, cutting oils and other “ECO-lubricants”.




















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GBE invested over two years in manufacturing process and produce development trials to prove the integrity of its production system and create markets. During this time the Company achieved the following:





●
Refined its biofuel processor and created a second generation machinery,


●
Developed a proprietary hydro-jacket seed entry double crushing system


●
Created an exportable meal and pelleting operation


●
Established a successful retail product line and distribution network and delivery process


●
Engaged in Canada’s first Bio-Fuel Research and Technology partnership with the University of Regina and the Saskatchewan Forest Centre (Forest First) for the development of next generation technologies


●
Engaged with a leading edge hydrodynamic cavitation technology as an exclusive applications developer for Biofuels, which technology is expected to improve the way in which biodiesel is created and distributed


●
Pioneered biomass gasification technologies


●
Grew to become one of the largest crushers of next generation jet fuel feed stock camelina oilseed





Future Plans





GBE’s plans, contingent upon financing and profitability of operations during the next fiscal year, are to expand its crushing capacity to a potential of 450 MT crushing capacity per day and improve and increase its refining capacity. We also plan to research acquisition of a U.S. based biodiesel operation to assist in meeting this production goal and to capitalize on a ‘blenders credit’ that is provided by the U.S. government. The company is also investigating expansion within Canada to develop, or acquire, additional crushing facilities and biodiesel operations and is working on an initiative to develop camelina and canola oil refining with a view to producing bio jet fuel.





GBE intends to market itself domestically and in foreign countries to obtain domestic and export contracts for the sale of its product lines by contacting distributors and purchasing agents of retail operations that sell products and that compete with the company’s products. Additionally, GBE has plans to enter niche food markets by developing an organic and/or camelina, flax, hemp and canola based oil products for Health food markets. It anticipates this to occur in the short term using General Bio Health Division’s ‘Spirit of Health’ brand.





Competitive Conditions





The bio energy industry is complex, competitive, and has multiple companies competing for the limited inputs of various grains and oil seeds. It is possible demand for input stocks will not remain economically viable based on growing demand and future input prices and this is a concern to us but, in general, input stocks of GBE are subject to normal commodity price variations and we do not believe any single company, or group of companies, has sufficient market power to affect the price or supply of bio energy in the world market.





With the price of crude oil at high current levels, production activity in the bio energy industry has increased dramatically, and competition is also high for the recruitment of qualified technical personnel and processing equipment. However, a primary source of GBE’s input stock is off-grade market of oil seed inputs. These inputs represent 20-30% of annual oil seed crop totals and for the foreseeable are expected to provide a sufficient supply of inputs for the company. This factor provides the Company with a competitive advantage as it is the only company currently operating in Canada which has an off-grade seed crusher and produces fuel, fuel grade oil, and additives from off grade oil seed.














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Government Regulation





Bio energy operations in Canada are subject to various federal, provincial and local laws and regulations which govern, development, production, exports, taxes, labour standards, occupational health, waste disposal, protection of the environment, safety, hazardous substances and other matters. The Company believes that it is, and will continue to be, in compliance in all material respects with applicable statutes and the regulations passed in Canada. There are no current orders or directions relating to the Company with respect to the foregoing laws and regulations.





Environmental Regulation





GBE’s activities are subject to various federal, provincial and local laws and regulations governing protection of the environment. In general, these laws are amended often and are becoming more restrictive. GBE’ policy is to conduct its business in a way that safeguards public health and the environment and believes that its operations are conducted in material compliance with applicable environmental laws and regulations. Since its incorporation, GBE has not had any material environmental incidents or non-compliance with any applicable environmental laws or regulations. The Company estimates that it will not incur material capital expenditures for environmental control facilities during the current fiscal year. GBE currently has a discretionary use permit and a Phase I Environmental Assessment completed.





REGINA PROCESSING PLANT





The operations of General Bio Energy are located within the city limits of Regina, Saskatchewan, Canada at 1620 McAra Street. This manufacturing facility comprises a rented building and land on a 1.5 acre corner property with an 8,800 square foot manufacturing plant on site. The facility has a fully certified weigh scale and silo grain storage for more than 100,000 bushels of input storage as well as shed and open-air storage for more than 2000 Metric Tonnes (‘MT’) of processed oilseed meal.





GBE’s plant is Western Canada’s first retail Bio-Diesel Fueling station and contains all the primary assets of the company.





The manufacturing facility has a rated capacity to generate a total annual production of oil on a current run rate of 150 MT of crushing capacity equal to 19.7 million liters (approximately 18, 250 MT) and approximately 30,000 MT of meal.





The manufacturing facility has the capacity to generate a total annual production of biofuel on current run rates equal to 19.7 million (18,250 MT). Additionally, our Biofuel processors have a capacity to exceed25 million liters of fuel production capability. We estimate future production capacity will reach 450 MT crush capacity (approximately 59.6 million liters of oil / biofuel)  and approximately 108,000 MT of meal annually, and biofuel production will be enhanced to match the oil supply capacity.





Crushing Operations





GBE’s plant has 150 MT/Day of oil seed crushing capacity based on a proprietary process that utilizes a double crush mechanical process with a “Hydro Jacket Heated Seed Entry” system that maximizes oil extraction to more than 90% and creates an oil seed meal capable of being pelletized, further processed to manufacture pet or other livestock feeds, extract proteins,  or shipped raw due to its dry non-compacting properties.











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The crushing process begins at Stage 1 (see diagram 1 below) where various oil seeds enter the crushing operations located inside the manufacturing facility through an initial hopper where the seed is dispersed along the proprietary  heated hydro jacket that heats the seed to 60 degrees. This heat increases the capacity of the crushers to extract a maximum amount of oil. After passing along the entire span of the heated hydro jacket the seed is equally distributed to the array of primary crushers for its initial expeller crush. The oil and seed are separated and the meal is conveyed through an auger system to second stage crushing. The oil is then deposited into a common oil filter system where it is heated and centrifuged and sent to bulk storage located inside a heated environment in the building.





The crushed meal from Stage 1 is deposited into the re-crushers at stage 2 where additional oil is extracted and deposited to the common oil filter system. The meal is then conveyored and distributed through an auger system to storage outside the main facility where it holds for customer pick up. Or, the meal is re-directed to two peletting machines where it can be further prepared for either bagging or bulk pick up by the customer.





The oil produced is a COPA Type III which can be sold to food processors for additional refining or because it meets or exceeds specifications required to produce ASTM D6571 standard for retail bio-diesel and is sold at the retail pump located on the premises, or is manufactured into value added retail products on the premises.





Two Stage Crushing System of GBE



































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Processor Operations





The company has both a prototype and a reengineered second generation biofuel processors on site. The capacity of these two processors when combined is greater than  20 - 30 Million liters per year. The processors are shielded in a firewalled separate location inside the main facility, but are sufficiently portable to be rapidly deployed to other locations.





The oil generated from the crushing process can be further processed using a “waterless” processing method that, through low heat and no pressure, converts Bio Oil to Biodiesel. This is achieved by putting the oil through a chemical process that adds a mixture of methoxide and using various mineral plate filters that creates biodiesel. GBE uses a bleaching clay to clarify the fuel, which is then pumped through filtration centrifuges and finally to storage tanks for retail distribution. A by-product of this process is Glycerin that can be sold for various secondary industries including cosmetic and co-generation power systems.





All processes of the company are waterless, non-toxic, effluent friendly, and are considered “green” because of their continuous flow nature.





Meal and Pelleting Operations





Meal is the remaining seed elements that are the remnants of the crush of oil seed. It takes on the appearance of a soil or peat moss texture, and is a highly valued commodity due to its protein and high fat content. Through the process of GBE’s crushing, approximately 80% of the fat (oil) is removed from the seed in its double crush process, leaving approx 8% fat in the meal.  In this  raw form it is used primarily for livestock feed and is a high demand product due to bans on the use of animal tallow.





The meal is dealt with in the plant through a series of augers and conveyors which move it from the primary crusher output funnels to the secondary crush input funnels and finally to the exterior storage environment where it waits for shipping to the customer. The meal can be further refined through a filtration process where a highly valued protein powder can be extracted which can be sold for use in a variety of applications from pet food to aquaculture and exported globally.





In January 2009 GBE commissioned two 5 MT/day pelletizing machines to increase its ability to sell its meal in pellets. These pellets can be used for products bagged for retail markets as well as to provide added assurance of non-compacting when shipping meal to distant locations. Once the meal is put into its pellet form, the pellets are put into shipping containers or bagged for retail market purposes.





Meal is a primary co-product of the company and we are initiating plans to commercialize the use of meal through the patented process licensed from the Canadian Department of Fisheries and Oceans. A top priority will be to develop high margin fish food for aquaculture and other primary protein products.





Bottling & Retail Operations





All of the retail functions, product creation, bottling, labeling and marketing are, where possible, performed at the manufacturing facility. The product creation is a labour intensive process of filling bottles and wrapping them with labels. As the company grows, we plan to automate some processes in this area.

















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One of our primary trade names is: ‘MOPO Environmental Lubricants. The various products sold under the “MOPO Environmental Lubricants” brand created in our manufacturing facility are:





1)
Dust Suppressants





2)
Environmental Lubricants used for:


a)
Cutting Oil


b)
Chain Oil


c)
General All Purpose Lubricant


d)
Gun Oil


e)
Penetrating Oil (the oil/solution is prepared at the facility but is outsourced for aerosolizing)





3)
Environmental Fuel Line Conditioners packaged in:


a)
1 Liter F style bottle


b)
4 Liter F style jug


c)
205 Liter barrel


d)
1036 Liter totes


e)
Bulk





Other primary trade names include: ‘General Bio Health’ and ‘Spirit of Health’, under which we manufacture, distribute, and retail essential oils, camelina, canola, flax, and hemp, in various formats including capsules, gourmet cooking oils, and skin care formulations.





Subsidiaries





Our primary subsidiary is General Bio Energy Inc., a Saskatchewan corporation is a 95.1% owned subsidiary and we also wholly own Loma Verde Explorations, Ltd., a British Columbia corporation which is currently inactive.





Employees





Our subsidiary General Bio Energy Inc. employees 8 full time technical and administrative staff. We expect a significant increase in the number of our employees over the next 12 month period as we implement our strategic plans. We contract with outside professionals for legal, audit, accounting, and regulatory filing services as required.





Intellectual Property





We do not own, either legally or beneficially, any patents, trademarks, servicemarks, or other registered intellectual property. We license certain patented intellectual property from the Canadian Department of Fisheries and Oceans.





News Highlights During the Quarter:





Clean Power Concepts Named One of Canada’s Emerging Growth Companies





On December 21, 2010, the Company announced its operating subsidiary General Bio Energy Inc. (‘General Bio’) was recently named as one of Canada’s top 50 emerging growth companies by Profit Magazine.





“Each year Profit Magazine names fifty organizations that have experienced tremendous growth,” comments Michael Shenher, Clean Power’s President and CEO. “We’re thrilled that General Bio has been included on the Profit Magazine 2010 ‘Hot Fifty List’ among some very innovative companies during tough economic times.”





The ranking was based on General Bio’s impressive sales growth of its agricultural based bio-tech products including essential oils and vegetable oil seed proteins. General Bio was formed in 2006 and has successfully developed a consumer base for its environmentally friendly products over the last four years. Revenues continue to grow, as evidenced by sales during the six month period ended October 31, 2010, which increased by 133% versus the six period ended October 31, 2009.







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Shenher added, “We at Clean Power are honored that we’ve been included on a list which the editors of Profit Magazine refer to as:





“...entrepreneurial bright lights who have shown a keen eye for exploiting under-served niches, a willingness to take risks, a ruthless attention to cost control and, above all, a passionate commitment to delivering value to their customers.”





Shenher concluded by commenting, “It’s wonderful that the hard work and dedication of our management, staff and stakeholders have translated into an appearance on Profit’s Hot Fifty List. We’re dedicated to serving the growth market in environmentally friendly produces and expect the upward trend of our company to continue. This recognition is definitely an indication that we’re on the right track and will is a great way to end the year.”








Clean Power Concepts Launches "Spirit of Health" Natural Consumer Products Brand





On December 22, 2010, we announced the creation of the 'Spirit of Health' brand under which Clean Power will launch a new line of natural consumer products.





"The creation of the 'Spirit of Health' brand is another step in our diversification into consumer driven environmentally friendly health products," said CEO Michael Shenher." The 'Spirit of Health' brand will include a line of natural health supplements made from essential camelina oil, which is an extremely high source of omega 3, omega 6 and vitamin E, in quantities rivaling salmon oil."





Initially, the line will consist of three products: camelina oil capsules, gourmet cooking oil, and a skin care health and beauty formulation aimed to be a remedy for several skin maladies. Plans are also underway to expand the product base into flax, canola and hemp oil based essential oil products.





Shenher closed by saying, "Clean Power sees this natural product brand as being highly attractive to Asian markets which are major consumers of traditional medicine products and fits well into our medium and long-term marketing plans."








Major Sales AgreementReached





On January 13, 2011,  wereported today that Clean Power had signed a significant long-term agreement with K.N.D. Feeds Ltd. (‘KND’) of Saskatchewan to market the company’s crude canola oil and canola meal off-take on an on-going basis to an expanded base of customers on a global scale.





KND is a well-respected Saskatchewan based supplier to the livestock feed market, which has been in the feed/commodities sales business since the mid 1980’s. Under this marketing agreement, KND has committed to market Clean Power’s canola products. The agreement is comprehensive and has sales estimates of 400 metric tons of canola oil and 600 metric tons of canola meal off take per month for the next five (5) years. The majority of this oil is intended for the fast growing animal feed market.





“We at Clean Power are fortunate to have the opportunity to work with such successful and reputable people as Ken Kuntz at KND,” commented Mike Shenher, President and CEO. “We believe that expanding our sales network  with partners like KND is enhancing our competitiveness and positioning the Company for further growth. In doing so we’ve significantly enhanced our ability to capitalize on global sales opportunities through this sales agreement.” Shenher added. "We have been working diligently in 2010 to execute our business plan – to build our infrastructure, expand our product line and establish meaningful, tenured and protected sales and distribution agreements with well established  companies such as KND whose innovative sales focus and values fit our exacting criteria," concluded  Shenher. "Today's announcement is pivotal for the Company as we turn our attention now in 2011 from supply and development, to targeted sales execution."





About K.N.D. Feeds Ltd.


K.N.D. Feeds Ltd.(‘KND’) is located in Bjorkdale, Saskatchewan and has been in operation since the mid 1980’s. KND facilitates sales of approximately 60,000 metric tonnes commodities per year and specializes in the livestock feed business. The company’s CEO Ken Kuntz will be instrumental in assisting Clean Power in developing its product lines and sales channels.









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Letter of Intent Executed to Acquire Assets of Alabama Bio Energy LLC and Subsidiary





On February 3, 2011 we executed a letter of intent to acquire the assets of Alabama Bio Energy LLC, and its subsidiary Eagle Bio Diesel Inc. ofBridgeport, Alabama. Its founder and CEO, Dr. William J. Freeman, MD, has agreed to join the board of directors of Clean Power Concepts Inc., and becomes President of the General Bio Health division of Clean Power.





The Bridgeport facility has a current production capacity of 100 million liters of biodiesel annually from a variety of feedstock. The closing date is March 15, 2011.





"We have worked with Dr. Freeman as a supplier, and we are very pleased to welcome Bill to the team, and we are excited for the prospects for Clean Power in Alabama and area," said Michael Shenher CEO of Clean Power Concepts Inc.





About Dr. William J. Freeman:


Dr. William J. Freeman, MD, is a University of Washington (Seattle) graduate and holds an MD degree from Johns Hopkins, as well as several years of postgraduate residency at Johns Hopkins Hospital in Baltimore. He is a Board Certified Otolaryngologist-Head & Neck Surgeon, and also a practicing Allergist. He designed, initiated, constructed, licensed, syndicated, and managed a total of 9 different multi-specialty freestanding surgical centers spread across states. He is a graduate of the Brooks Air Force School of Aerospace medicine and was an astronaut candidate. He is a land and sea rated pilot, including rating in the F-4 Phantom jet fighter and former flight surgeon.








Clean Power Concepts Letter of Intent Marks Entry Into Chinese Market




On December 28, 2010, we signed a letter of intent (the ‘Agreement’) to supply the Chongqing Grain Group Co. Ltd. of China (‘Chongqing’) with crude canola oil.





President and CEO Michael Shenher commented, “The Chinese market represents an incredible opportunity for Clean Power. We’ve been targeting this market for a few years and negotiating with Chongqing for the past two.” Shenher added, “This Agreement is a breakthrough for us and we’re now refining our working plan to meet and exceed the expectations of our new major customer.”





This agreement will help Chongqing in its goal of establishing supply chains for canola which diversify its reliance on major supplies such as ADM, Cargill and Bunge and is part of a long term plan to create a food processing zone in the Chong Qing region of China which has a processing capacity of 30,000 metric tonnes (‘MT’) of rapeseed and 30,000 MT of grain and oil.





Under the agreement, Chongqing has committed to purchasing up to 3,000 MT per month of crude degummed canola oil from Clean Power’s operating subsidiary and ship the oil to China where it will be refined into ‘Refined Bleached and Deodorized’ (‘RBD’) oil which is table ready. The refined oil will then be marketed under Chongqing’s ‘Red Dragon Fly Oil’ brand, which is well established in the Chong Qing Region. The parties have agreed that Clean Power will initially supply Chongqing from its own inventory and through purchases from third party suppliers as it increases production facilities to bring all production sold to Chongqing in-house. To complete the agreement Clean Power Concepts will be hosting a formal delegation from Chongqing within the next 60 days which will be comprised of private company officials and Chinese state representatives.





About Chongqing Grain Group Co. Ltd.


The Chongqing Grain Group Co. Ltd. (the ‘Group’) is located in Chong Qing, which is the youngest municipality in China and the economic and financial center of the upper reaches of the Yangtze River. The Group owns 51 subsidiaries and has 21,507 employees. Total assets of the Group have reached 6.1 Billion Yuan Renminbi (‘RMB’), or approximately US$920 million. The Group has abundant storage facilities, a developed logistics system, an integrated market network, efficient management and excellent marketing groups. The quality of the Group’s three brands -‘Red Dragonfly’ cooking oil, ‘Ren He’ rice and ‘Ren Ji’ flour -have earned a high reputation in China. More information about The Group is available at www.cqgrain.com. Address: Chongqing Grain Group Co. Ltd., Fourth Floor, Lin Hua Huan Dao Ming Du, No. 13 Ba Yi Road, Yu Zhong District, Chong Qing, China 400010.










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Results of Operations for the Three Month Periods Ended January 31, 2011 and January 31, 2010





Clean Powers operating results, for the nine month periods ended January 31, 2011 and 2009 are summarized as follows:





Nine months EndedJanuary 312010


2009Revenue

$
664,803


$
257,536Cost of Sales


(502,586
)


(79,499
)Gross Profit


162,217



178,037Expenses


(859,173
)


(451,753
)Interest


(98,894
)


(42,510
)Other Income


379,275



-Net Loss


(416,575
)


(316,226
)





Revenues


Sales totaled $221,732 and $664,803 respectively for the three and nine month periods ended January 31, 2011 versus $67,520 and $257,536 respectively for the three and nine month periods ended January 31, 2010. The two primary components of revenue were sales of canola meal and canola oil. Other revenue primarily included fees charged for toll crushing. We project sales will continue to rise as we implement our strategic plans during the coming year.





Cost of Sales


Cost of Sales are primarily comprised of agricultural seed input stocks. Cost of sales were $168,160 and $502,586 respectively for the three and nine months ended January 31, 2011 versus $16,190 and $79,499 respectively for the three and nine months ended January 31, 2010. The increase in these costs is tied directly to an increase in sales over the same periods respectively. We cannot accurately predict our future cost of sales because this is primarily driven by the prices of agricultural commodities which vary widely based on many circumstances.





Production Expenses


Production expenses primarily comprise: repairs and maintenance, indirect production supplies, vehicle expenses, and costs related to pre-production testing. Production expenses were $33,971  and $80,276 respectively for the three and nine month periods ended January 31, 2011 versus $nil and $31,526 respectively for the three and nine month periods ended January 31, 2010.We expect production expenses to increase significantly during the coming year as we implement our strategic plans.





General and Administrative Expenses


General and administrative expenses primarily comprise: rent, organizational administration expenses and the cost of bad debts. General and administrative expenses were $72,002 and $378,282 respectively for the three and nine month periods ended January 31, 2011 versus $24,309 and $116,464 for the three and nine month periods ended January 31, 2010.We expect administrative fees to increase moderately during the coming year.





Depreciation


Depreciation is comprised of depreciation expenses for our capital equipment and amortization of lease expenses. Depreciation totaled $30,944 and $77,535 respectively for the three and nine month periods ended January 31, 2011 versus $50,953 and $162,594 respectively for the three and nine month periods ended January 31, 2010.We expect amortization expenses to increase moderately during the coming year in line with our equipment purchases.





Salaries and Wages


Salaries and wages comprise payroll taxes and similar costs related to our management and administrative employees. Salaries and wages totaled $132,305 and $139,294 respectively for the three and nine month periods ended January 31, 2011 versus $46,170 and $89,941 respectively for the same periods ended January 31, 2010. We expect salaries and wages will increase incrementally in line with our planned increase in staff levels.











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Professional and Consultant Fees


Professional and consultant fees totaled $77,143 and $120,426 respectively for the three and nine months ended January 31, 2011 versus $2,631 and $22,366 respectively for the same periods ended January 31, 2010. Professional fees are primarily composed of technical consultant, legal, auditor, and accounting fees. During the coming year, we project professional fees will increase moderately.





Advertising


Advertising expenses are related to advertising purchases for the promotion of our products. Advertising totaled $15,413 and $36,524 respectively for the three and nine month periods ending January 31, 2011 versus $13,828 and $20,646 respectively for the same period ended January 31, 2010. We expect advertising expenses to increase moderately over the coming year as we implement our strategic plans.





Investor Relations


Investor Relations expenses comprise costs for press releases, maintenance of the Company’s website and other investor information initiatives. During the three and nine month periods ended January 31, 2011, these expenses totaled $18,086 and $26,836 respectively versus $6,534 and $8,216 respectively for the comparative periods ended January 31, 2010. We anticipate Investor Relations expenses will increase substantially during the coming year as we continue our efforts to raise further capital and keep investors informed of Company developments.





Other Income Related to Scientific Research and Experimental Development Tax Refund


On February 17, 2011, the Company received confirmation from Canada Revenue Agency that its claim for a refund relating to a Canadian Government sponsored Scientific Research and Experimental Development (‘SR&ED’) program had been approved. This resulted in the recognition of other income and an account receivable of $379,275. Additionally, expenses and an account payable of $75,855 were recorded relating to consultant services arising from preparation and administration of the claim. These amounts have been recorded in these financial statements.





Net Income (Loss)


We had net income of $24,128 and incurred a net loss of $(416,575) respectively, for the three and nine months ended January 31, 2011 compared with net losses of $(109,884) and $(316,226) for the same periods ended January 31, 2010. We anticipate net losses will continue during the coming year as we invest in expanding our business.
 
 Liquidity and Capital Resources





Our financial position as at January 31, 2011 and April 30, 2010 were as follows:




Working Capital


As at

January 31,

2011


As at

April 30,

2010Current Assets

$
439,167


$
374,421Current Liabilities


2,553,958



2,022,715Working Capital  (Deficiency)

$
(2,114,791
)

$
(1,628,294
)





Our working capital deficit increased by $(486,497) between April 30, 2010 and January 31, 2011 due to an inventory drawdown and increased loans and advances payable.




Cash Flows


Nine months

ended

January 31,

2011


Nine months

ended

January 31,

2010Net cash (used) by Operating Activities

$
(340,254
)

$
(64,711
)Net cash provided (used) by Investing Activities


(6,871
)


(626,848
)Net cash provided in Financing Activities


338,629



715,176(Decrease) Increase in Cash during the period


(9,264
)


(40,521
)Cash, Beginning of Period


36,262



41,766Cash, End of Period


26,998



1,245







24
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Material Events and Uncertainties





The continuation of our business is dependent upon obtaining further financing, sales of our products, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.





There are no assurances that we will be able to obtain further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

































































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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





EXCHANGE RATE FLUCTUATION RISK





Our reporting currency is United States Dollars. Our transactions are primarily conducted in US$ but also include transactions in other currencies, notably the Canadian Dollar. Foreign currency rate fluctuations may have a material impact on the Company’s financial reporting. These fluctuations may have positive or negative impacts on the results of operations of the Company.





We have not entered into derivative contracts either to hedge existing risk or for speculative purposes.






ITEM 4.  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are ineffective in reaching that level of assurance.





As of the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.





Management's Report on Internal Control over Financial Reporting





Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company's CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

















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As of January 31, 2011, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company's internal control over financial reporting was not effective as of January 31, 2011, as a result of the identification of the material weaknesses described below.





A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.





Specifically, management identified the following control deficiencies: (1) The Company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions. The Company has not implemented measures that would prevent the individuals from overriding the internal control system. The Company does not believe that this control deficiency has resulted in deficient financial reporting because the Chief Financial Officer is aware of his responsibilities under the SEC's reporting requirements and personally certifies the financial reports; (2) The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software. Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.





This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities Exchange Commission that permit the Company to provide only management's report in this annual report.





Changes in Internal Control over Financial Reporting





During the quarter ended January 31, 2011, the Certifying Officers reviewed our internal control over financial reporting (as defined in rules 13a-15(f) and 15d-15(f)) under the Exchange Actas of the Evaluation Date and concluded that no changes occurred in such control or in other factors during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Deficiencies identified include the inadequate segregations of duties, lack of controls over procedures used to enter transactions into the general ledger, and lack of appropriate review of the reconciliations and supporting workpapers used in the financial close and reporting process. Due to the potential pervasive effect on the financial statement account balances and disclosures and the importance of the annual and interim financial closing and reporting process, in the aggregate, management concluded that there was more than a remote likelihood that a material misstatement in our annual or interim financial statements could occur and would not be prevented or detected.





Remediation Plan





Addition of staff


We have identified that additional staff will be required to properly segment the accounting duties of the Company. However, we do not currently have resources to fulfill this part of our plan and will be addressing this matter once sufficient resources are available.





























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PART II – OTHER INFORMATION





ITEM 1.  LEGAL PROCEEDINGS





Other than the items noted below, we know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.





On October 9, 2009, Shafer Commodities Inc. of Vancouver, BC, Canada filed a Statement of Claim for $24,345 in the Court of Queen's Bench Saskatoon against General Bio Energy Inc. pursuant to an invoice dispute. In respect of this matter, General Bio Energy is the plaintiff in a counterclaim against Shafer Commodities Inc. of Vancouver, BC, Canada in respect to an amount of $68,171 owed by Shafer Commodities to General Bio Energy Inc. A court date to settle this matter has not yet been set.





During the nine months ended January 31, 2011, the Company reached a settlement with the City of Regina regarding an odor complaint against its plant in Regina.








ITEM 1A.  RISK FACTORS





In addition to other information in this report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements.  Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition.  If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.





Risks Associated With Bio Energy





Bio energy business development activities are speculative in nature.





Bio energy and its related businesses are a new industry and are a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to develop marketable products, establish wholesale and retail delivery channels, and acquire wide consumer acceptance. The marketability of bio energy product produced by our company may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of agricultural commodity supplies, wholesale and retail markets and such other factors as government regulations, including regulations relating to product testing, waste management, allowable production, importing and exporting of agricultural products and environmental protection issues, the combination of which factors may result in our company not receiving an adequate return of investment capital.














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Substantial expenditures are required to establish bio energy production facilities and marketing channels.





Substantial expenditures are required to establish economically feasible bio energy production processes and develop processing facilities and infrastructure. Although substantial benefits may be derived from the discovery and development of marketable bio energy related products, no assurance can be given that the production of such products will be economically feasible or result in profitable operation. Additionally, production costs can be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, and work interruptions.





Bio energy operations are subject to applicable law and government regulation. Even if we produce marketable products in a commercially viable quantity, these laws and regulations could restrict or prohibit our business. If we cannot produce our products in sufficient quantities due to government restrictions, our business may fail.





The production of bio energy related products requires permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to production, product development, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, manufacturing facility safety and other matters. There can be no assurance that our operations will always conform to regulatory requirements or that we will always obtain or maintain any of the permits required for continued production and development of our products at economically viable levels. If we cannot accomplish these objectives, our business could fail.





We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all licenses and permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned production, development, or expansion activities.





The bio energy industry is highly competitive and there is no assurance we will continue to be successful in acquiring raw materials.





We compete with other bio energy companies for raw materials. In identifying and acquiring raw materials, we may compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire raw materials in the future. Accordingly, there can be no assurance that we will acquire sufficient raw materials in the future to support a commercial viable operation.





The Bio Energy industry depends heavily on supplies of agricultural commodities and products and faces severe risks related to crop failures.





The bio energy industry is heavily reliant on a the supply of agricultural commodities and products from farmers. Farming is an inherently risky industry and is susceptible to crop failures due to weather, lack of water supplies, the infestation of pests and insects, and numerous other potential risks. As a result, bio energy producers are also susceptible to these same risks.























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Agricultural commodity prices are subject to dramatic and unpredictable fluctuations.





The price of agricultural commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to changes in allowable farming  methods. The effect of these factors on the price of agricultural commodities, and therefore the economic viability of our operations, cannot accurately be predicted.





The Bio Energy industry is a new and emerging market and therefore there is no assurance that customers will purchase its products.





The Company competes against existing products in the market place that are not bio energy products such as agriculture products like hay, chicken feed, corn, gasoline and synthetic oil. A goal of the Company is to market its products in mainstream retail markets where it will face heavy competition from existing products. To be successful, we will need to educate mainstream retailers such as Canadian Tire, Rona, Home Depot, and other retailers about our products in order to stimulate demand.  If a demand cannot be created, the sales of our products will be diminished relative to our competition who have established customers and distribution networks.





Downward fluctuations in the pricing of competing products may drive down bio energy products prices.




The Company’s future profitability will depend upon the market prices for bio energy products, such as bio diesel, meal, mustard oil, and canola oil and bio diesel conditioner. If the prices for competing products drop, the Company may need to adjust its prices downward and this may result in less sales revenue and decrease in profitability. Bio energy product pricing is influenced by many factors including: retail supply and demand of like products; non-bio energy competitor product innovations; and development of new technologies by non-bio energy competitors. All these factors are beyond our control and may result in decreased profitability of our products.








Risks Related To Our Company





We have a limited operating history on which to base an evaluation of our business and prospects.





We were incorporated on October 17, 2005 and our subsidiary has been in the bio energy related business since February 14, 2006. We have never earned a profit from our operations. In addition, our operating history has been restricted to the small scale production and sale of bio energy related products and this does not provide a meaningful basis for an evaluation of our prospects. We have no way to accurately evaluate the likelihood of whether we will be able to build and operate our business successfully. We anticipate that we will continue to incur operating costs without realizing any profits for the foreseeable future and therefore expect to continue to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant additional revenues from the sale of our products, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

















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Our activities will be subject to environmental and other industry regulations which could have an adverse effect on our financial condition.





Our company's activities are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation generally provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with production operations, which could result in environmental pollution. A breach of such legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations could have an adverse effect on the financial condition of our company.





Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions.





The fact that we have not earned any profits since our incorporation raises substantial doubt about our ability to continue as a going concern.





Although our subsidiary has generated revenues, we have not generated any profits from operations since our incorporation and we anticipate that we will continue to incur operating expenses without revenues unless and until we are able to further  expand and develop our base of customers. On January 31, 2011, we had cash in the amount of $26,998 and a working capital deficit of $(2,114,791). We incurred a net loss of $(416,575) for the nine months ended January 31, 2011. We estimate our average monthly operating expenses to be approximately $60,000 to $90,000, including production costs, management services and administrative costs. Should the results of our planned business model require us to increase our current operating budget, we may have to raise additional funds to meet our currently budgeted operating requirements for the next 12 months. As we cannot assure a lender that we will be able to successfully generate profits, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity securities and shareholder loans, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue our operations, we may be forced to delay, scale back, or eliminate our activities. If any of these were to occur, there is a substantial risk that our business would fail. Management has plans to seek additional capital through private placements and/or public offerings of its capital stock. These conditions raise substantial doubt about our company’s ability to continue as a going concern. Although there are no assurances that management’s plans will be realized, management believes that our company will be able to continue operations in the future. Our consolidated financial statements do not include any adjustments relating to the recoverability and potential classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event our company cannot continue in existence. We continue to experience net operating losses.
































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We rely on the use and development of proprietary intellectual property which may become obsolete or be supplanted by better processed used or developed by competitors.





The success of our operations rely to a significant degree upon our ability to develop, maintain and protect proprietary products and technologies. At present, we have not filed applications for any patents on our proprietary technologies and these could be at risk of being copied or stolen by competitors. Additionally, even if we do patent our proprietary processes, patents will provide only limited protection and would likely require substantial costs to enforce. If our trade secrets become known, our business and competitive position could be adversely affected. Additionally, if we do not continually invest in the development of new processes and technologies, our current processes and technologies may become obsolete and this could have a material negative impact on our business.





We currently rely on certain key individuals and the loss of one of these key individuals could have an adverse effect on the Company.





Our success depends to a certain degree upon certain key members of our management. These individuals are a significant factor in the our growth and success. The loss of the service of members of the management and advisory board could have a material adverse effect on our company. In particular, the success of our company is highly dependent upon the efforts of our President & CEO, CFO, PAO, Treasurer & Secretary, Chair & Director, the loss of whose services would have a material adverse effect on the success and development of our company. Additionally, we do not anticipate having key man insurance in place in respect of our directors and senior officers in the foreseeable future.





The Company’s operation would not survive a complete oil seed crop failure.





If a seed crop failure were to occur, this event were to occur, we would not have sufficient inputs for our production processes and would not be able to create the products we sells to our customers.





The Company’s products are subject to defect which diminishes their value and the Company’s ability to sell.




The meal that is sold to agriculture feeders, such as chicken farm and cattle feedlots, demand certain grades of meal that has high protein animal feed content.  If the meal we produce does not have the necessary protein or other content required by a livestock producer, one of our main product lines may not be saleable or may only be saleable at reduced prices which may be unprofitable for our company. Additionally, we may experience meal productions runs where the meal is of low quality or tainted and unfit for sale, which could have a material negative impact on our current sales revenue, product reputation, and future saleability of our products.





The Company is subject to operating risks which may adversely affect the Company’s financial condition.





Our operations are be subject to risks normally incidental to manufacturing operations which may result in work stoppages and/or damage to property. This may be caused by:





●      Breakdown of our crushers;


●      Breakdown of the processes that create our end products;


●      Labor disputes


●      Foreign exchange rates


●      Imposition of new government regulations


●      Sabotage by operational personnel;


●      Cost overruns; and


●      Fire, flood, or other Acts of God.




















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We require substantial funds to operate effectively.





Several significant factors related to our operational cash requirements include, but are not limited to:





●
Costs of production, including manufacturing labor and operation and maintenance of production facilities;


●
Research and development expenses


●
Availability and costs of financing; and


●
Regulatory compliance regulations and restraints.





The Company’s insurance does not cover all of its potential losses, liabilities and damage related to its business.





The Company has a general insurance policy that covers its equipment in the amount of $500,000, however insurance may not cover all of our losses if damage does occur and our operation would be disrupted if our crushers and processes where destroyed or damaged by fire, flood, tornado and severe wind gusts. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks because of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any further profitability and result in increasing costs and a decline in the value of the securities of the Company.





Competition may hamper the Company’s ability to acquire inputs and labor necessary to operate the Company, which may have an adverse impact on the Company’s operations.




Significant and increasing competition exists for labor and executives in Saskatchewan and minimum wage laws and compensation arrangements are rising where we carry on business. As a result of this competition, some of which is with large companies with substantial capabilities and greater financial resources than the Company, the Company may be unable to acquire skilled labor on terms it considers acceptable. The Company also competes with other companies for the recruitment and retention of qualified employees and other personnel.





The Company may experience difficulty attracting and retaining qualified management to meet the needs of its anticipated growth, and the failure to manage the Company’s growth effectively could have a material adverse effect on its business and financial condition.




The Company’s prospects depend in part on the ability of its executive officers and senior management to operate effectively, both independently and as a group. To manage its growth, the Company may have to attract and retain additional highly qualified management, financial and technical personnel and continue to implement and improve operational, financial and management information systems. Investors must be willing to rely to a significant extent on management’s discretion and judgment, as well as the expertise and competence of outside contractors which can be very expensive.








Risks Associated with Our Common Stock





Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.





Our common stock is quoted on the Over-The-Counter Bulletin Board service of the Financial Industry Regulatory Authority. Trading in stock quoted on the Over-The-Counter Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the Over-The-Counter Bulletin Board is not a stock exchange, and trading of securities on the Over-The-Counter Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ, or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of their shares.

















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Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.





Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.





In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority ’ requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.








Other Risks





Trends, Risks and Uncertainties





We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.





Directors and Officers





At that time the share exchange occurred, Mr. Michael Shenher was both the sole director, President and CEO, and 60.1% majority shareholder of General Bio Energy Inc. and also the sole director, and President and CEO of Clean Power Concepts Inc. This means we have a concentration of our executive intellectual capital and the loss of his services could have a material negative impact on our operations.




















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





The Company did not make any sales of equity securities during the quarter.








ITEM 3.  DEFAULTS UPON SENIOR SECURITIES





The Company has no senior securities outstanding.








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





There were no other matters during the quarter ended January 31, 2011, which were submitted to a vote of the Company's security holders, through the solicitation of proxies or otherwise.








ITEM 5.  OTHER INFORMATION





(a)   During the quarter there was no information which would have been required to be filed via a report on Form 8-K which was not filed as such.





(b)   During the quarter there were no material changes to the procedures by which security holders may recommend nominees to the registrant’s board of directors.








ITEM 6.EXHIBITS





EXHIBIT INDEX




Number
Exhibit Description3.1
Articles of Incorporation*3.2
Certificate of Amendment of Articles of Incorporation*3.3
Bylaws*31.1
Certificate of President (chief executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
Certificate of Chief Financial Officer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certificate of President (chief executive officer) and Treasurer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





*    Filed as an exhibit to our registration statement on Form SB-2 filed May 1, 2006 and incorporated herein by this reference


































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SIGNATURES





In accordance with 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.





CLEAN POWER CONCEPTS INC.





/s/ Michael Shenher


Michael Shenher


President & CEO, CFO, PAO,


Director, and Chair





Dated: March 22, 2011
















































































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