Press Releases
Clean Power Technologies Inc. Files SEC form 10QSB, Quarterly Report
16 July 2007
Item 2. Management's Discussion and Analysis or Plan of Operation
(a) Plan of Operation
This current report contains forward-looking statements as that term is defined in section 27A of the United States Securities Act of 1933 and section 21E of the United States Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
We have not generated any revenues from products, services or operations since the inception of our Company. We are a development stage company, which is presently undertaking research and development on a hybrid vehicle engine.
Our plan of operations is to complete the research and development on our technology over the next several months and if successful, to license the technology or form partnerships for the use of the technology with any customers we may identify.
At present we do not have sufficient funds available to execute our business plan for the development of the technology. We have to date been funded by existing working capital, by equity placements by related parties and by shareholder loans from one of our directors and officers. There can be no assurance that we will be able to continue to raise the funding required to continue operations.
In July 2006 we moved into our industrial building and we undertook from that time the completion of the infrastructure for the building. Lighting of the entire working space was totally reinstalled with dramatically improved consequences for the environment in the administrative offices, test area and workshop. We purchased a range of modern machine tools to service our extensive experimental development programme to optimize the performance of the hybrid power trains that will be our principal product. Electrical supply and internal wiring were completely renewed to support these facilities.
In April 2006, at the founding of the Company's U.K. subsidiary, CPTL, delivery was taken of a Mazda RX8 vehicle, which incorporates a Wankel rotary engine that, with its small volume, conveniently allows space for the additional components of the CESAR system. A second identical car was received in September 2006 to allow parallel development of the optimum geometrical arrangement of these components. To permit extension of the test programme into the heavier vehicle range in which the CESAR system will be initially and principally applied, and following delivery of the prototype accumulator, a Caterpillar C-15 industrial diesel engine was purchased in May 2007.
Experimental research has always been regarded as an inevitable and crucial successor to the earlier theoretical studies that have supported the evolution of the Clean Energy Separation And Recovery (CESAR ) hybrid vehicle system. The experiments will provide the essential empirical data required
to enable the precise specification of the sophisticated control requirements of the power plant in steady open road operation as well as the anti-pollution urban mode with the combustion engine shut down. The research will involve conventional operation of the combustion engines and of auxiliary engines in driven mode, initially with compressed air to simulate performance of the vapour in the total hybrid system in advance of full operation of the prototype accumulator vessel. An air compressor and storage pressure vessel of adequate capacity have been installed for this purpose. Delivery was taken of the first prototype accumulator from Doosan-Babcock in May 2007.
An inaugural joint meeting of the design team and that from Mitsui-Babcock working on the CESAR project was held at the end of November 2006. Agreement was reached on the immediate practical path ahead with the understanding of the crucial influence that delivery of the first prototype energy accumulator would have. It was further agreed that the initial experimental programme should be restricted to a fundamental study of the thermo-fluid dynamics of the system, with the geometrical constraints of immediate application to a lighter vehicle prioritised in a second phase. Thus the first pressurisation of the accumulator, after hydraulic and other safety testing, would be from the Caterpillar C15 diesel engine operating under load control with a water dynamometer. Testing of this engine to determine operational fluid flows and temperatures will be succeeded in 2008 with the smaller Wankel engine to provide additional data for the second phase of the project.
During 2006 and through to delivery of the prototype accumulator a test cell was built to house safely the necessary test programme, and made strong enough to protect the main unit from a catastrophic component failure. Fluid dynamic and thermodynamic measurements of the charging and discharging rates of the energy accumulator, the performance of an auxiliary vapour engine and of the main combustion engines are being monitored to create an essential numerical data base. These tests together with the earlier theoretical work have indicated that for optimum control and maximum efficiency of the Wankel engine an output shaft-driven valve system will be required independent of the engine cylinder porting. Preliminary design of this feature has begun and will be complete and manufactured in 2007.
Agreement has been reached between Doosan-Babcock and CPTL on the provision of instruments and controls for the prototype system, with Babcock to supply all hardware, including safety valves and sensors for pressure and temperature measurement. CPTL will supply the steam regulating valves and provide the control and data logging aspects of the system, although with the provision by Babcock of a control algorithm based upon their equipment. In late 2007 risk assessments will be taken in consultation with external authorities as well as Babcock who commented favourably upon the safety aspects of the new test cell referred to above and now complete.
Resesarch and Development Objectives:
1. Heat transfer tests upon the economiser and evaporator of the prototype accumulator using the Caterpillar diesel engine. Times for attainment of specified vapour pressures and the corresponding discharge times for a range of starting accumulator pressures and outlet vapour flow rates expanded through the reciprocating auxiliary steam engine will be recorded to provide data on the total performance of the system. These tests are expected to be ongoing through August and the Fall of 2007.
2. Employment of up to a further five (5) engineers will be necessary to facilitate the development of these stages in our CESAR programme in later 2007:
Three (3) mechanical or chemical engineers with experience in: (i) design of process plan to predict and analyze the heat transfer performance and associated pressure losses for a range of thermal operations involving liquids and gases with and without change of phase; (ii) stress analysis including pressure vessel design; (iii) general layout design, especially under closely constrained geometrical conditions.
Two (2) automotive engineers to develop the truck production and vehicle detail design and the specific engine configuration for a production hybrid engine and initial engine configuration feasibility.
3. The tests scheduled as item 1 will be repeated using the exhaust of the Wankel engine in combustion mode as the source of charging heat for the accumulator over a wide range of practicable operating conditions for all components. These tests are expected to take place early in 2008.
Progress to July 2007 and development for the following 12 months from May 31, 2007:
1. Steam Process control data has been developed and programmed into the main computer with the engine control data as the basis for the initial overall control algorithm. An engine control system based initially on the Agilent Technologies VEE PRO 7.5 PC software to allow for the development of the vehicle control between gasoline and steam operation has been designed and constructed. This will control the vehicle hybrid engine, steam/gasoline injection, associated valves, sensors, actuators, transducers and interface with the vehicle via CAN BUS to control the overall vehicle operation.
2. Detailed analysis has begun of the Wankel engine geometry to enable modifications allowing one lobe of the engine to operate on steam or compressed air with the other lobe operating on gasoline. Excellent results have been obtained regarding initial testing of an engine incorporating design of a rotary lobe as an expander with injection of compressed air to simulate steam at two points around the lobe perimeter. Use has been made of the pressure set point valve ("regulator"). This has required a new design of a miniaturized 100 bar steam valve, developed in conjunction with Samson, a German steam valve manufacturer.
3. Successful engine dynamometer test runs have been conducted on the prototype 1 Wankel engine with two lobes of the engine functioning in combustion mode. Engine maps for fuelling and ignition have been developed through in-depth test cell work. All of the engine electrical systems and electrical components have been removed and replaced with our components. An engine loom has been designed and manufactured to allow total operation of the Wankel engine with all its functionality to be variable as required by our engineers.
4. Test data regarding exhaust temperatures have been recorded for analysis.
5. An early commercial truck refrigeration application has been conceived with the use of otherwise waste exhaust or cylinder cooling heat to empower the refrigerator systems during rest periods for trucks conveying perishable goods over long distances. As an alternative to the lighter vehicle application, using the rotary and small Wankel engine, a Caterpillar C15 15 litre 450 hp 2095 Nm torque truck engine has been purchased and installed in our test cell.
(c) Off-balance sheet arrangements
Not Applicable