| Item 1. Financial Statements: | |
Interim Consolidated Balance Sheets as of May 31, 2008 (unaudited) and August 31, 2007 | F-2 |
Interim Consolidated Statements of Operations for the three and nine months ended May 31, 2008, and May 31, 2007 and for the period May 12, 2006, (Date of Inception) to May 31, 2008 (unaudited) | F-3 |
Interim Consolidated Statements of Cash Flows for the nine months ended May 31, 2008, and May 31, 2007 and for the period May 12, 2006, (Date of Inception) to May 31, 2008 (unaudited) | F-4 |
Notes to the Interim Consolidated Financial Statements for the nine months ended May 31, 2008 (unaudited) | F-5 to F-15 |
Item 2. Management’s Discussion and Analysis or Plan of Operation | 2 |
Item 3. Controls and Procedures | 4 |
PART II – OTHER INFORMATION | |
Item 1. Legal Proceedings | 5 |
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds | 5 |
Item 3. Defaults Upon Senior Securities | 6 |
Item 4. Submission of Matters to a Vote of Security Holders | 6 |
Item 5. Other Information | 7 |
Item 6. Exhibits | 8 |
Signatures | 11 |
i
PART I - FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2008
(Unaudited)
(Stated in US Dollars)
F-1
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
INTERIM CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
ASSETS | (unaudited) May 31, | (audited) August 31, | |
2008 | 2007 | ||
Current | |||
Cash | $ 16,139 | $ 331,279 | |
Amounts receivable | 10,962 | 32,360 | |
Prepaid expenses – Note 3 | 20,199 | 111,800 | |
47,300 | 475,439 | ||
Plant and equipment | 396,470 | 382,928 | |
$ 443,770 | $ 858,367 | ||
LIABILITIES | |||
Current | |||
Accounts payable and accrued liabilities | $ 169,162 | $ 54,809 | |
Wages payable – related party Stock option liability – Note 5 | 41,667 87,952 | - - | |
298,781 | 54,809 | ||
Long-Term Debt - Note 3 | 31,844 | 1,269,723 | |
Total Liabilities | 330,625 | 1,324,532 | |
STOCKHOLDERS’ EQUITY (DEFICIENCY) | |||
Capital Stock | |||
Authorized: | |||
75,000,000 common shares, par value $0.001 per share | |||
Issued and outstanding: | |||
65,185,748 common shares as at May 31, 2008 and 53,954,162 as at Aug. 31, 2007 – Note 3 | 65,186 | 53,954 | |
Additional paid-in capital | 8,871,841 | 3,088,081 | |
Accumulated other comprehensive loss | (76,151) | (45,198) | |
Deficit accumulated during the development stage | (8,747,731) | (3,563,002) | |
113,145 | (466,165) | ||
$ 443,770 | $ 858,367 | ||
SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
F-2
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended May 31, 2008 and May 31, 2007 and
for the period May 12, 2006 (Date of Inception) to May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
May 12, 2006 | |||||
Three months ending | Nine months ending | (Date of Inception) | |||
May 31 | May 31 | May 31 | May 31 | to May 31, | |||
2008 | 2007 | 2008 | 2007 | 2008 | |
Expenses | |||||
Depreciation and amortization Amortization, stock option benefit – Note 5 | $47,389 87,952 | $ 27,527 | $130,528 87,952 | $ 63,734
- | $234,486 87,952 |
Interest – Note 3 | 3,088 | 24,494 | 26,648 | 66,464 | 150,625 |
Office and administration | 255,324 | 111,856 | 755,880 | 281,089 | 1,232,007 |
Organizational costs | - | - | - | - | 2,500 |
Professional fees | 76,572 | 584,864 | 213,082 | 741,479 | 464,747 |
Professional fees settled with shares | - | - | - | - | 633,609 |
Research and development | 23,695 | 33,148 | 82,899 | 105,461 | 706,645 |
Directors fees settled with shares | - | 180,000 | 250,000 | 180,000 | 430,000 |
Salaries and consulting fees | 235,223 | 110,017 | 512,740 | 316,578 | 1,036,327 |
Salaries/Consulting fees settled with shares | 2,925,000 | 611,500 | 3,125,000 | 611,500 | 3,736,500 |
Compensation by stock
| - | - | - | - | 32,333 |
Net income (loss) for the period | $(3,654,243) | $(1,683,406) | $(5,184,729) | $(2,366,305) | $ (8,747,731) |
Other comprehensive loss: | |||||
Foreign currency translation adjustment | (14,598) | 3,746 | ( 30,953) | (7,570) | (76,151) |
Comprehensive income (loss) for the period | $(3,668,841) | $ (1,679,660) | $ (5,215,682) | $(2,373,875) | $ (8,823,882) |
Basic and diluted loss per share | $ (0.06) | $ (0.04) | $ (0.09) | $ (0.05) | |
Weighted average shares outstanding | 61,935,748 | 46,448,021 | 58,980,431 | 45,789,937 | |
SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
F-3
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended May 31, 2008 and May 31, 2007 and
for the period May 12, 2006 (Date of Inception) to May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Nine months | Nine months | May 12, 2006 | |
ended | ended | (Date of | |
May 31, | May 31, | Inception) to | |
2008 | 2007 | May 31, 2008 | |
Cash Flows From Operating Activities | |||
Net loss for the period | $ (5,184,729) | $(2,366,305) | $ (8,747,731) |
Items not affecting cash: | |||
Depreciation Amortization, stock option benefit – Note 5 | 103,085 87,952 | 63,734 - | 207,043 87,952 |
Imputed interest | - | 41,970 | 99,408 |
Accrued interest | 27,443 | 23,583 | 52,137 |
Research and development | - | - | 402,000 |
Professional fees | - | 633,610 | 633,610 |
Consulting fees | - | 611,500 | 611,500 |
Directors fees | - | 180,000 | 180,000 |
Stock-based compensation | 3,375,000 | - | 3,407,333 |
Changes in non-cash working capital balance related to operations: | |||
Amounts receivable | 20,790 | 43,376 | (4,751) |
Prepaid expenses | 90,824 | (111,289) | (12,134) |
Accounts payable and accrued liabilities | 156,573 | (50,463) | 197,601 |
Cash flows used in operating activities | (1,323,062) | (930,284) | (2,886,032) |
Cash Flows from Investing Activities | |||
Acquisition of plant and equipment | (123,483) | (221,625) | (594,611) |
Cash acquired from business acquisition | - | - | 62,070 |
Cash flows used in investing activities | (123,483) | (221,625) | (532,541) |
Cash Flows from Financing Activities | |||
Investor deposits | - | 10,000 | - |
Issuance of common shares for cash | 815,000 | 450,000 | 1,743,766 |
Due to related party | 339,669 | 837,431 | 1,732,779 |
Cash flows provided by financing activities | 1,154,669 | 1,297,431 | 3,476,545 |
Foreign currency translation adjustment | (23,264) | (1,645) | (41,833) |
Increase (decrease) in cash during the period | (315,140) | 143,877 | 16,139 |
Cash at beginning of period | 331,279 | 99,234 |
|
Cash at end of period | $ 16,139 | $ 243,111 | $ 16,139 |
SEE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
F-4
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 1
Nature and Continuance of Operations
(a)
Organization
Clean Power Technologies Inc., (the “Company”) was incorporated in the State of Nevada, United States of America on October 30, 2003 as Sphere of Language. On June 13, 2006, the Company changed its name to Clean Power Technologies Inc.
The Company incorporated Clean Energy and Power Solutions Inc. (“CEPS”) on May 12, 2006 in the State of Nevada as a wholly owned subsidiary.
The Company is developing a project for a gas/steam or diesel/steam hybrid technology, and has incorporated a wholly-owned subsidiary, Clean Power Technologies Limited (“CPTL-UK”), a company based in, and incorporated under the laws of the United Kingdom on May 10, 2006. The Company conducts all of its research and development through CPTL-UK.
The Company’s fiscal year-end is August 31.
(b)
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries CEPS and CPTL-UK. All inter-company transactions have been eliminated.
(c)
Development Stage Company
The Company is a development stage company as defined in Statement of Financial Accounting Standards No. 7. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
(d)
Continuance of Operations
These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for the next twelve months. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At May 31, 2008, the Company had not yet achieved profitable operations, has accumulated losses of $8,747,731 since its inception, has negative working capital of $251,481 and expects to
F-5
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 1. (d) Continuance of Operations (continued)
incur further losses in the development of its business. The Company has closed a financing of $2,000,000 subsequent to the date of this report. The funding is more particularly described under subsequent events.
Note 2
Interim Financial Statements
While the information presented in the accompanying nine months to May 31, 2008 interim consolidated financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with accounting principles generally accepted in the United States of America. It is suggested that these financial statements be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended August 31, 2007.
Operating results for the nine months ended May 31, 2008 are not necessarily indicative of the results that can be expected for the fiscal year ending August 31, 2008.
Note 3
Related Party Transactions
Included in prepaid expenses is $4,446 of prepaid rent paid to a director of Clean Power Technologies Ltd. (“CPTL”). Rent expense of $26,770 was charged by the director for the nine month period ended May 31, 2008.
During the nine month period ended May 31, 2008, the Company issued 3,021,586 shares of common stock to retire debt, including accrued interest totalling $22,147 as at the date of settlement, at $0.50 per share. The debt was due to Abdul Mitha, the Company’s President. During the nine month period ended May 31, 2008, the Company received additional cash proceeds totalling $317,522, including $4,400 in accrued interest, which amount has been recorded as long-term debt on the Company’s balance sheet. The amount has been offset by $285,678 which has been applied to additional paid in capital with respect to the beneficial conversion feature associated with the provisions of the proceeds, which amount will be expensed over the term of the note(s) or until conversion.
During the nine months ended May 31, 2008, a company with a director in common advanced $815,000 for operations and this amount was converted to common shares under the terms of a pre-existing agreement at $0.25 per share for a total of 3,260,000 shares.
During the nine months ended May 31, 2008 the Company issued a total of 250,000 common shares to David William Thursfield, a director of the Company, as director’s fees.
F-6
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 3
Related Party Transactions - Cont’d
On May 22, 2008, the Board of Directors approved an Employment Agreement (the “Agreement”) with Mr. Abdul Mitha, a director and executive officer of the Company. Under the terms of the Agreement, the Company must employ Mr. Mitha until July 1, 2014, unless sooner terminated, with the provision of extending the term for an additional five (5) years upon mutual agreement between the Company and Mr. Mitha. The Company has agreed to compensate Mr. Mitha with an annual base salary of $500,000 during the first year of the initial term, with annual increases of 20% per year thereafter during the term of the Agreement, payable in consistent payroll instalments. The Company has also agreed to increase Mr. Mitha’s base salary to $750,000 when the Company generates in excess of $1,000,000 and up to $5,000,000 in gross revenue. In the event that the Company is unable to pay the base salary in cash to Mr. Mitha, the Company is required to provide compensation within ninety (90) days by way of restricted shares of common stock, issued at $0.50 per share. Mr. Mitha is entitled to receive bonus payments or incentive compensation, as may be determined by the Board of Directors of the Company, relating to various share issuances and stock incentive compensation as outlined in the Agreement. Mr. Mitha is also entitled to participate in all stock option plans of the Company in effect during the term of employment. The Company shall take all action reasonably requested by the Executive to permit any cashless exercise of the options as permitted under the Company’s Stock Option Plan. The Company has agreed to enter into a stock option agreement with Mr. Mitha, granting Mr. Mitha the option to purchase at the end of each anniversary of the Agreement 1,000,000 shares of the Company’s common stock at an exercise price of the average 90 days trading price immediately preceding the anniversary date of the Agreement. The options vest immediately upon issuance and these option shares shall be exercisable by Mr. Mitha within 5 years from the date of such options becoming due and exercisable. As compensation for the services provided by Mr. Mitha to the Company from April 27, 2004 through the date of the Agreement, the Company has agreed to give Mr. Mitha 4,000,000 shares of the Company’s restricted common stock. The shares were valued during the quarter at the closing price of the Company’s common stock on the effective date of the Agreement, May 1, 2008, or $0.65 per share for a total of $2,600,000 which amount has been expensed. The shares were subsequently issued to Mr. Mitha on June 10, 2008, but have been included in shares issued and outstanding during the quarter as a result of the effective date of the Agreement. As at May 31, 2008, an amount totalling $41,666 has accrued to Mr. Mitha for his monthly salary obligation for May 2008.
Note 4
Commitments
i)
On July 26, 2006, CPTL entered into a three year lease agreement for an office and research facility located in Newhaven, United Kingdom. The lease expires on July 25, 2009. The CPTL lease calls for annual rent in the amount of $36,244 (£18,000) plus applicable taxes, and is payable quarterly.
F-7
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 4
Commitments - Cont’d
CPTL is required to make minimum lease payments over the remaining term of the lease as follows:
Lease Period | Payment |
Year ending August 31, 2008 | $ 8,923 |
Year ending August 31, 2009 | $ 33,233 |
Total | $ 42,156 |
ii)
On June 21, 2006, the Company entered into an investor relations agreement for a period of one year for consideration of $2,500 per month and granted 200,000 share purchase options exercisable at $1.30 per share until July 1, 2008. The options vested over the fiscal year ended August 31, 2007.
iii)
The Company entered into a collaboration agreement with Doosan Babcock Energy Ltd. (“Doosan” or the “Partner”) dated October 11, 2006 for the development of a steam accumulator and other related technologies in partnership for use with the Company’s petrol (gas)/steam and diesel/steam hybrid technologies project. The agreement called for funding of approximately US$400,000 by Doosan. As consideration, the Company was required to issue 4,000,000 common shares of the Company. The term of the agreement is three years.
The agreement further provides that within 18 months from the first vehicle being publicly unveiled, the Partner will have the option of either seeking cash reimbursement of its development costs from the Company or retaining the previously issued shares of common shares of the Company. Should the Partner seek cash reimbursement then the Partner shall return a total of 3,000,000 shares of common shares to
the Company.
Should development costs exceed US$400,000, then the Partner has the option to either receive cash reimbursement of the amount in excess of US$400,000 or to receive additional shares of the Company at a price to be negotiated. Should the Company be unable to reimburse the Partner on any call for reimbursement as
F-8
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 4
Commitments – Cont’d
allowed under the collaboration agreement, the Company will transfer an equal share of the intellectual property to the Partner so that the Partner and the Company will own the intellectual property equally.
On June 13, 2007, the Company issued a total of 4,000,000 shares of restricted common shares to Doosan pursuant to the terms and conditions of a subscription agreement, dated May 21, 2007 (the “Subscription Agreement”). The Subscription Agreement was executed pursuant to the terms and conditions of that Collaboration Agreement entered into between the parties on October 11, 2006.
The Company will provide an additional 100,000 restricted common shares to Doosan, which shall be used at their discretion to reward any of their employees who have helped in the development of the technologies project.
iv)
On January 4, 2007, the Company executed an Investment Agreement and a Registration Rights Agreement with the Dutchess Private Equities Fund Ltd. (“Dutchess”). Under the terms of these agreements, Dutchess has extended an equity line of credit of up to $10,000,000 to be taken down at the Company’s election, either a) 200% of the average US daily volume of the common shares for the 10 trading days prior to the put notice date multiplied by the average of the three daily closing bid prices immediately preceding the put date or b) $250,000 upon the registration of the initial amount of 10,000,000 common shares by the Company which will be used for the draw down of funds. The registration statement, which was declared effective by the U.S. Securities and Exchange Commission (“SEC”), provides for the offering of securities on a continuing basis. The agreement further calls for the Company to pay a 1% fee to a registered broker dealer to a maximum of $10,000 on each draw down of funds under the Investment Agreement. The Company retained legal counsel to prepare the registration statement on Form SB-2 which was filed during the quarter ending May 31, 2007. The registration statement was declared effective by the U.S. Securities and Exchange Commission on April 11, 2007. As at the date of this quarterly report, the Company has not drawn down any funds under the equity line. Pursuant to the terms of a financing described in subsequent events, the Company is requested to terminate the Investment Agreement and Registration Rights Agreement with Dutchess.
v)
During the year ended August 31, 2007, the Company entered into an agreement with Gersten Savage LLP in connection with the filing and prosecution of certain patent applications with respect to the Unitary Engine and Reservoir Engine Inventions. Under the terms of the agreement, the Company has agreed to pay fixed fees as follows:
1.
$333,333 worth of the Company’s restricted common shares with a deemed value of $1.16 per share. The Company issued a total of 287,357 common shares in respect to this provision during the fiscal year ended August 31, 2007, and;
F-9
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 4
Commitments – Cont’d
2.
$166,666 in cash upon the effectiveness of the Registration Statement to be paid as follows: $15,000 upon signing of the agreement and $10,000 per month commencing 120 days from the date of effectiveness until such time as the cash amounts are settled in full. Gersten Savage invoices the Company monthly for the cash portion of the agreement. As at May 31, 2008, a total of $145,000 in cash payments have been remitted to Gersten Savage in accordance with the agreement.
vi)
During the year ended August 31, 2007, the Company entered into an agreement with Abchurch Communications Limited to provide certain integrated financial and corporate communications services. Under the terms of the agreement, Abchurch will provide four (4) phases of services to assist the Company in securing a listing on the AIM Exchange in London. Fees payable under the agreement include a project fee of £40,000 (approximately U.S. $80,000), of which amount £15,000 (approximately U.S. $31,000) is due upon signing the agreement. The remaining £25,000 (approximately U.S. $51,000) was due in two payments, in July, 2007 and September 2007, respectively. The agreement also calls for ongoing quarterly payments of £12,000 (approximately U.S. $24,400) for the term of the agreement. The agreement may be terminated by either party with three (3) months written notice. At the date of this quarterly report the Company has remitted a total of £35,000 (approximately U.S. $70,000) with respect to the costs related to the project fee and a further £10,500 (approximately U.S. $21,000) with respect to quarterly payment requirements. The Company renegotiated the quarterly payments required under the contract effective April 1, 2008 whereby quarterly fees were reduced to £3,000 per month for the period January to March 2008, and thereafter to £2,000 per month for the remaining term of the contract. As at May 31, 2008 a total of £15,500 (approximately U.S. $31,000) remains payable to Abchurch under the former and revised contract which amount is included in accounts payable.
vii) On March 17, 2008, the Company entered into an agreement with steam technology specialist Dampflokomotiv-und Maschinenfabrik DLM AG ("DLM") to act as a consultant for the further development of the Company's Clean Energy Storage and Recovery ('CESAR') technology. Under the terms of the agreement DLM will provide a preliminary study to the Company at a cost of €34,375 (approximately U.S. $52,000) payable in 3 instalments as follows:
-
25% of the total sum upon signing of the engagement;
-
25% of the total sum upon presentation of the first results but not later than three (3) months after engagement date; and
-
Balance upon completion of work scope payable within 30 days of delivery of final invoice.
The Company remitted a payment of €9,000 (approximately U.S. $13,600) concurrent with the execution of the engagement.
F-10
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 5
Stock based compensation
Issuance of stock options
On May 22, 2008, the Board of Directors approved an Employment Agreement (the “Agreement”) with Mr. Abdul Mitha, a director and executive officer of the Company (refer to Note 3 above). Under the terms of the Agreement, the Company has agreed to enter into a stock option agreement with Mr. Mitha, granting Mr. Mitha the option to purchase at the end of each anniversary of the Agreement 1,000,000 shares of the Company’s common stock at an exercise price of the average 90 days trading price immediately preceding the anniversary date of the Agreement The options vest immediately upon issuance of the underlying agreement at each anniversary date, and the option shares shall be exercisable by Mr. Mitha within 5 years from the date of grant. Further under the terms of the Agreement, all options issued to Mr. Mitha in accordance with the Agreement shall become immediately exercisable as to 100% of the shares of Common Stock not otherwise vested upon any termination of employment.
Following is a table outlining the number of options required to be granted as fully vested under the Agreement at each anniversary date and the term of said options:
Date | Number of options | Expiry date |
May 1, 2009 | 1,000,000 | April 30, 2014 |
May 1, 2010 | 1,000,000 | April 30, 2015 |
May 1, 2011 | 1,000,000 | April 30, 2016 |
May 1, 2012 | 1,000,000 | April 30, 2017 |
May 1, 2013 | 1,000,000 | April 30, 2018 |
May 1, 2014 | 1,000,000 | April 30, 2019 |
6,000,000 |
For financial reporting purposes, the Company has relied on the guidance provided in FASB 123R and has valued the options over 1,2,3,4,5 and 6 years at inception (May 1, 2008) applying variable accounting. The fair value of the shares will be recalculated at each reporting date using an exercise price of the preceding 90 days applying Volume Weighted Average Pricing (VWAP). The value attributable to the vested portion of each tranche will be amortized over its requisite period, with a final value being calculated on the grant date for each tranche applying the 90 day VWAP immediately preceding the actual date of grant. Additionally, we have not applied a forfeiture rate to these shares as under the terms of the Agreement the shares are guaranteed to become fully vested.
F-11
CLEAN POWER TECHNOLOGIES INC.
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Nine Months ended May 31, 2008
(Unaudited)
(Stated in U.S. Dollars)
Note 5
Stock based compensation (Cont’d)
Issuance of stock options (cont’d)
The fair value of each option granted was computed using the Black-Scholes method using the following weighted-average assumptions:
Stock Price (Issue date) | Exercise price | Risk Free interest rate | Date of issue | Expiration date | t (years) | Volatility | Value |
$ 0.65 | $ 0.80 | 3.78% | 5/1/2008 | 5/1/2014 | 3.0014 | 103.14% | $0.40 |
$ 0.65 | $ 0.80 | 3.78% | 5/1/2008 | 5/1/2015 | 3.5014 | 103.14% | $0.42 |
$ 0.65 | $ 0.80 | 3.78% | 5/1/2008 | 5/1/2016 | 4.0027 | 103.14% | $0.45 |
$ 0.65 | $ 0.80 | 3.78% | 5/1/2008 | 5/1/2017 | 4.5027 | 103.14% | $0.47 |
$ 0.65 | $ 0.80 | 3.78% | 5/1/2008 | 5/1/2018 | 5.0027 | 103.14% | $0.49 |
$ 0.65 | $ 0.80 | 3.78% |