SCHEDULE B: SUPPLEMENTARY INFORMATION
1.
For the current first quarter-to-date:
a)
Deferred Expenditures: N/A
b)
Aggregate expenditures made to parties not at arm’s length: N/A
2.
For the quarter under review:
a)
Summary of securities issued during the period: None
b)
Summary of stock options granted during the period: None
3.
As at the end of the first quarter:
a)
Authorized capital:
50,000,000
Issued and outstanding:
40,970,175
b)
Summary of options, warrants and convertible securities outstanding:
Type of Issue | Number Outstanding | Exercise Price | Expiry Date | |||
Warrants Warrants | 2,450,000 1,725,773 | $0.18 $0.40 | October 9, 2008 October 9, 2008 |
c)
Number of common shares in escrow:
Nil
Number of common shares held in pool:
Nil
d)
Directors:
Avtandil Koridze
Stuart C. Lew
Bakytzhan Oralbekov
Phillip Webber
William Kaska
Schedule C
PowerNova Technologies Corporation
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion of the results of operations and financial condition of the Company for the first quarter ended August 31, 2006 with comparison to previous quarters should be read in conjunction with the Financial Statements.
Hydrogen Production Technology Research and Development Status
Several transition metal complexes have been found capable of catalyzing alkane dehydrogenation. The most promising to date are the iridium “pincer” complexes. However, these complexes cannot find practical application due to some circumstances; for example, the rate of dehydrogenation is still insufficient and product inhibition and isomerization of primarily formed 1-alkenes into less valuable internal alkenes take place.
Our lab at the Russian Academy of Sciences in Moscow continues to search for and develop new approaches to the design of novel pincer complexes. One pathway the lab is exploring is the substantial modification of the pincer ligand, including a change of its electronic and steric properties. PowerNova’s scientists are attempting to create a new generation of pincer complexes as catalysts for alkane dehydrogenation. Based on conceptually novel binuclear pincer complexes, this approach may lead to improved catalysts that are not currently available.
The lab has successfully demonstrated that it is possible to synthesize bimetallic, metallocene-based pincer complexes. This has not been evident a priori from the geometric characteristics.
The next step included the study of our systems as catalysts for alkane dehydrogenation. As we have recently established, our systems reveal high efficiency in the dehydrogenation of alkanes. This efficiency is comparable with the best known systems up to date.
In the near term, the advantages of our metallocene-based pincer complexes as catalysts will be fully explored.
The focus is on generating relevant data so that potential customers and/or partners can evaluate our technology.
Patent Status
PowerNova was granted a U.S. patent (#6909009) for its hydrogen production technology on June 21, 2005. The full name of the patent is Alkane and Alkane Group Dehydrogenation with Organometallic Catalysts. The patent can be viewed on the United State Patent and Trademark Office website.
Over-The-Counter Bulletin Board Listing Status
We have sent three submissions of the Form 20-F to the Securities and Exchange Commission and have received their comment letters. The completion of our financial audit for fiscal 2006 has been done for the preparation of the fourth submission of the Form 20-F to the Securities and Exchange Commission.
When the Securities and Exchange Commission approves the Form 20-F, we can then apply to the NASD for a stock listing and trading on the Over-The-Counter Bulletin Board.
Results of operations
For the first quarter ended August 31, 2005 the Company reported a net loss of $17,285 or $0.00 per common share. The net loss for the first quarter ended August 31, 2005 was $561 or $0.00 per common share. The increase in the net loss was due to the changes in expenditures in the areas of office expenses and bank charges and management salaries.
Revenues for the first quarter ended August 31, 2006 were $0 compared with $0 for the first quarter ended August31, 2005. Revenue from the sale and licensing of PowerNova’s hydrogen production technology is not expected until the research and development program has been completed successfully.
General and administrative expenses were $17,285 for the first quarter ended August 31, 2006 compared with $561 for the first quarter ended August 31, 2005.
Liquidity and Capital Resources
At August 31, 2006, the Company had cash of $55 compared with $2,171 at August 31, 2004. Cash used for operations before working capital totaled $0 for the first quarter ended August 31, 2006 compared with $1,241 for the first quarter ended August 31, 2005.
Capital expenditures for the first quarter ended August 31, 2006 were $0 compared with net expenditures of $1,850 for the first quarter ended August 31, 2004.
Risks and Uncertainties
The Company is applying to the OTC Bulletin Board for a stock listing. There is no guarantee that the Company’s shares will trade on the OTC Bulletin Board. The hydrogen production technology is in the research and development phase and its operational characteristics will not be known until the catalyst is completed and tested. The success of the technology depends on its commercial viability and also a market for hydrogen from fuel cell manufacturers and industrial and chemical plants that require hydrogen and its commercial viability in the production of olefins. Also, lack of revenues during the research and development stage of the technology means that the Company must rely on private and public financings to continue its operations.
