PLAN OF OPERATION

Product Development and Improvement Objectives

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

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

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

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

Our ability to complete the above product development and improvement objectives is dependent on our ability to obtain substantial financing in the near term. In addition, if Oeko Bio or NKW are able to obtain sufficient financing to complete the purchase of the fractional depolymerization plants that they have tentatively ordered, of which there is no assurance, we may scale back our product development and improvement activities to focus our resources on constructing any ordered plants.

Marketing and Sales Plans

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

1. We will conduct tests/demonstrations for potential purchasers of recycling/processing systems based on our Fuel Technology. It is expected that potential customers will provide us with samples of the input materials that they intend to use in systems purchased from us. We will then use these sample materials in our pilot plant to conduct a test run to determine the quality and amount of diesel fuel produced. The results of these tests will be used to formulate modifications/specifications for potential recycling/processing systems to be sold to the potential customer. We intend to charge potential customers for conducting the test runs.

2. When not using the pilot plant to conduct test runs, we may use the pilot plant to process used oil, bilge oil and/or other materials to produce diesel fuel or heating oil that we will sell directly to small oil companies and other potential buyers. The pilot plant contains two bulk storage tanks that can be used to store used oil or other input materials that we may use.

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

We anticipate spending approximately EUR 2,000,000 (approximately $2,956,400) in pursuing the above plan of operation over the next twelve months. We currently do not have sufficient working capital to meet our anticipated needs for the next twelve months. We have not earned any significant revenues to date and there are no assurances that we will be able to do so in the future. In addition, we can not provide any assurances that our actual working capital needs for the next twelve months will not exceed the amounts that we have estimated. If we require additional financing, it is anticipated that such additional financing will likely be in the form of equity financing, as we do not expect there to be substantial debt financing available to us at this stage of our business.

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

RESULTS OF OPERATIONS

Summary of Year End Results

                              Year Ended January 31,        Percentage
                                     2008     2007     Increase / (Decrease)
Revenue                             $ NIL        $ NIL                   N/A
Expenses                      (2,081,079)  (2,978,710)               (30.1)%
Other Items                      (50,134)       10,903              (559.8)%
Net Loss                     $(2,131,213) $(2,967,807)               (28.2)%

During the year ended January 31, 2008, we earned income from processing waste of $18,625. This income was earned by us from the sale of heating oil to Heitzer Tankschutz & Mineralole ("Heitzer Tankschutz") under the terms of our waste oil processing agreement with them. In addition to these amounts, we earned miscellaneous income of $13,267 during the year ended January 31, 2008 for amounts charged by us for preparing a quote for Clyvia plants.

We are presently still in the development stage of our business. We have begun to sell heating oil under our processing agreement with Heitzer Tankschutz; however, our income from those sales have been nominal thus far. In addition, although we have earned some income from test runs conducted through our pilot plant of sample materials provided by prospective purchasers of our recycling/processing system, we have not completed the sale of any recycling/processing systems and there are no assurances that we will be able to do so in the future. Although we have entered into a number of distribution agreements for recycling/processing plants based on our Fuel Technology, there are no assurances that these agreements will result in any actual sales of our products or that we will be able to otherwise earn any significant revenues.

Expenses

The major components of our expenses for the year are outlined in the table
below:

                         Year Ended January 31,       Percentage
                            2008        2007     Increase / (Decrease)
Amortization                $227,041     $36,420                523.4%
Management Fees              294,998     258,247                 14.2%
Professional Fees            374,212     260,417                 43.7%
Other Operating Expenses     599,657     502,849                 19.3%
Stock-Based Compensation     577,156   1,917,952               (69.9)%
Foreign Currency Loss          8,015       2,825                183.7%
Total Expenses            $2,081,079  $2,978,710               (30.1)%

Amortization expenses increased during the year ended January 31, 2008 due to the depreciation and amortization of our pilot plant.

Management fees represent amounts paid as compensation to our executive officers and the executive officers of Clyvia GmbH during the respective year-end periods. The slight increase in management fees for the year ended January 31, 2008 from the year ended January 31, 2008 was primarily the result of changes in foreign exchange rates.

Professional fees consist primarily of amounts incurred for certain investor relations services and for legal and accounting services provided in connection with meeting our ongoing reporting obligations under the Securities Exchange Act of 1934.

Other operating expenses consist primarily of amounts spent on salaries and wages, advertising, and travel, as well as other miscellaneous office expenses. The increased other operating expenses during the year ended January 31, 2008 relate to additional marketing and business development activities undertaken during the period.

The amounts recorded by us as stock-based compensation represent the fair value of options granted during the period. During the year ended January 31, 2008, we issued options to purchase up to 1,220,000 shares of our common stock. During the year ended January 31, 2007, we issued options to purchase up to 2,600,00 shares of our common stock.

Cash Flows
                                                Year Ended January 31
                                                 2008          2007
Net Cash used in Operating Activities         $(506,299)   $(1,122,935)
Net Cash used in Investing Activities          (293,235)    (2,871,391)
Net Cash from Financing Activities               496,253      1,809,486
Effect of Foreign Currency Translations           31,421        367,182
Net Increase (Decrease) in Cash During Period $(271,860)   $(1,817,658)



Working Capital
                                                                   Percentage
                      At January 31, 2008 At January 31, 2007 Increase / (Decrease)
Current Assets              $69,051            $344,881              (80.0)%
Current Liabilities       (1,957,782)          (330,560)             492.3%
Working Capital          $(1,888,731)           $14,321            (13,288.5)%
Surplus

As at January 31, 2008, we had bank indebtedness in the amount of $48,077. Included in current liabilities are approximately $230,158 due to related parties primarily on account of amounts owed for the purchase of plant and equipment and unpaid management fees and reimbursable expenses. The decrease in our working capital from our year ended January 31, 2007 is largely attributable to the fact that our only significant sources of financing during the period were short-term loans obtained from third parties.

Financing Requirements

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

(a) our ability to develop commercially marketable products based on the Fuel Technology;

(b) our ability to raise additional capital necessary to implement our business strategy and plan of operation;

(c) our ability to compete with other existing technologies; and

(d) the success of any marketing and promotional campaign which we conduct for our products once development is complete.

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

During the year ended January 31, 2008, we received EUR 90,000 (approximately $133,038) in loans from Biotherm Technologie AG ("Biotherm). Biotherm acts as Clyvia GmbH's exclusive agent in promoting, advertising and generating sales for Clyvia GmbH. See "Sales and Licensing Plans" above. The loans from Biotherm bear interest at a rate of 8% per annum and are payable as follows

(i) EUR 35,000 (approximately $51,737) after December 31, 2007, upon Biotherm providing at least one month's advance notice, in writing. On April 21, 2008, Biotherm and Clyvia GmbH agreed to extend the due date of the loan to December 31, 2008;

(ii) An additional EUR 35,000 (approximately $51,737) after December 31, 2007, upon Biotherm providing at least one month's advance notice, in writing. On April 21, 2008, Biotherm and Clyvia GmbH agreed to extend the due date of the loan to December 31, 2008; and

(iii) EUR 20,000 (approximately $29,564) after July 31, 2008, upon Biotherm providing at least one month's advance notice in writing. On April 21, 2008, Biotherm and Clyvia GmbH agreed to extend the due date of the loan to December 31, 2008.

During the year ended January 31, 2008, we received EUR 185,000 (approximately $273,467) and $41,000 in loans from unrelated third parties as follows:

(a) Loans totaling EUR 35,000 (approximately $51,737), bearing interest at a rate of 8.5% per annum and payable on or before September 30, 2007. Subsequent to December 31, 2007, the loan was extended to July 31, 2008.

(b) Loans totaling EUR 150,000 (approximately $221,730), bearing interest at a rate of 8.5% per annum and payable on or before August 31, 2007. Subsequent to August 31, 2007, the loans were extended to December 31, 2007. We are currently in negotiations with the lender to extend the term of the loans.

(c) Loans totaling $41,000, bearing interest at a rate of 10% per annum and payable on demand.

During the year ended January 31, 2008, we also received a loan for EUR 28,000 (approximately $41,389) from DAST GmbH, a company controlled by Dieter Wagels, a managing director of Clyvia GmbH. The loan bears interest at a rate of 8% per annum and is payable on one month's advance written notice at the end of any fiscal quarter.

On April 1, 2008 and April 2, 2008, Inventa Holding GmbH ("Inventa"), our controlling shareholder, loaned us EUR 200,000 ($295,640) and EUR 15,000 ($22,173), respectively. The loans bear interest at a rate of 8% per annum and are due on demand, provided that Inventa provides us with at least one month's advance notice, in writing.

On April 24, 2008 and May 31, 2008, we received loans totaling EUR 135,000 ($199,557) from BTec Holding AG ("BTec") as follows:

(a) EUR 100,000, granted on April 24, 2008, bearing interest at a rate of 10% per annum. BTec may demand repayment of the loan 90 days after the grant date, provided that BTec provides us with at least one month's advance written notice. As collateral for the loan, Inventa has pledged 750,000 of the shares of our common stock owned by Inventa.

(b) EUR 35,000 ($51,737), granted on May 31, 2008, bearing interest at a rate of 10% per annum. BTec may demand repayment after December 31, 2008 provided that BTec provides us with at least one month's advance written notice. As collateral for this loan, Inventa has pledged 250,00 of the shares of our common stock owned by Inventa.

BTec is the owner of a 40% interest in Inventa, our controlling shareholder, with control over 52% of Inventa's voting interests. See "Changes in Control".

In addition, we have received an aggregate of EUR 24,895 ($36,800) and $4,500 in loans from unrelated third parties since the end of our fiscal year. The USD loans for $4,500 in the aggregate bear interest at a rate of 10% per annum and are payable upon demand. The EUR loans totaling EUR 24,895 ($36,800) bear interest at a rate of 8.5% per annum and are repayable after June 30, 2008 upon the lender providing at least one months advance written notice.

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

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

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

CRITICAL ACCOUNTING POLICIES

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

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