Ann: Quarterly Activities Report and Appendix 4C, page-38

This Quarterly exceeds expectations.

Key takeaways.

1. Management are very aware of the need to generate revenue in the short-term and have established the framework for payment of ongoing licensing fees. This is reflected by the $800k received last quarter and a further $460k received in the first week of April. I am extremely happy with the current cash position as it shows that KPO are almost cash-flow neutral. This is a massive plus.

2. The Geothermie Taufkirchen power plant in Germany due to come online in late 2017. Not much has been said about this project since Wasabi originally announced they'd signed a term sheet to jointly develop, own and operate the plant back in 2011. Once complete, I believe KPO will receive a licensing fee, engineering fees and a share of the ongoing project earnings.
>>> http://www.asx.com.au/asxpdf/20110615/pdf/41z6zn9v98jxw0.pdf

3. Sinopec Hainan plant almost complete. Some folks are splitting hairs over the completion date, but considering the original agreement between Sinopec and SSNE dates back to August 2012, I think another few months aint gonna hurt!!! The important thing is that the plant is completed correctly and to spec.

4. The appointment of Mr Lu Hexi from Sinopec to Project Manager at A&W indicates to me that Sinopec want one of their own on board the KPO train and are committed to building further Kalina Cycle plants in future. KPO have also bolstered their engineering team in China in response to immediate market opportunities for the KALiNA Cycle.

IMO, as far as Quarterly Reports go, this is as good as it gets!!!