Turbine Truck Engines Inc. (TTEG), a development stage company, owns an exclusive license for manufacturing and marketing a new energy-efficient, detonation cycle gas turbine engine (DCGT) for heavy-duty highway trucks. This new engine design can utilize any known fuel source (gasoline, diesel, propane, natural gas, hydrogen, methanol, ethanol or LPG) or fuel mixture, yet needs zero coolant, lube oil, filters or pumps. The unique, lightweight turbine design has few moving parts, significantly reducing maintenance costs. The innovative cyclic detonation process produces a complete combustion of fuel-oxidation mixtures, resulting in greater fuel economy and fewer harmful exhaust emissions.

In July 2008, TTEG entered into a contractual agreement with AbM Engineering LLC for the purpose of the continued development and testing of the current 540 horsepower DCGT engine and a 70 horsepower/50kw generator combination. The Company has a strategic alliance with Aerospace Machinery & Electric Co. Ltd. for the development and commercialization of the DCGT engine specifically for application opportunities in the Peoples Republic of China; and with Tianjin Out Sky Technology Co. Ltd. to collaborate on the engineering, technical development and commercialization of the DCGT engine for motorcycle engine applications.

TTEG was founded in 2000 and is headquartered in Deland, Florida.

Share Statistics Aug-26-09			2007	2008	%Chg	Q2 2008	Q2 2009	% Chg
Symbol	TTEG	Revenue	-	-	n/m	-	-	n/m
Current price	$0.69	Gross profit	-	-	n/m	-	-	n/m
52wk Range:	$0.05-$0.89	Oper. income, $ Mn	-0.98	-2.47	n/m	-0.18	-0.32	n/m
Avg Vol (3m):	3,622,603	Net income, $ Mn	-0.98	-2.47	n/m	-0.18	-0.42	n/m
Market Cap.	$22.1M
Dil. Shares Outst.	26.7M	EPS, $	-0.16	-0.05	n/m	-0.01	-0.02	n/m

Source: Reuters.com, SEC Filings.

The Company is in development stage and is not yet generating any revenues. The net loss for the three months ended June 30, 2009, and 2008 was $417,583 and $184,402, respectively. The increase of $233,181 was mainly attributable to the increase in research and development expense, operating costs and net interest expenses.

Since the inception, TTEG has incurred significant net losses, negative operating cash flows and has financed its activities principally from the sale of public equity securities. The Company has $41,788 in cash as of June 30, 2009, as compared to $2,857 as of December 31, 2008. As of June 30, 2009, it had an accumulated deficit of $10.0 million and a working capital deficit of $1.0 million.

TTEG’s stock traded as high as $1.50 in late 2007. The stock has traded between $0.05 and $0.89 over the last 52 weeks. It has moved from $0.08 in late July to a $0.24 close in late August on big news about the Company’s operations in China in alliance with Tianjin Out Sky Technology. TTEG closed at $0.68 on August 25, 2009.

No consensus analysis data available.

The DCGT engine has no pistons or valves, and uses no lube oil, filters or pumps; uses more than 30% less fuel than current engine technologies; significantly reduces nitrogen oxide (NO, NO2, N2O2) and carbon monoxide (CO) emissions; operates on all fuels: hydrocarbon, hydrogen and synthetic; has flex-fuel and mixed fuels capability; has few moving parts, requiring less maintenance; has a high power-to-weight ratio; is lightweight (less than 2 lbs. per hp); and is air cooled and has cold start capability. The new energy efficient detonation cycle gas turbine can be designed and manufactured as a new or replacement engine for all heavy duty trucks that utilize engines ranging from 300 to 1,000 horsepower. Preliminary design concepts estimate the engine will have six 15-inch diameter, 20-pound turbine wheels mounted on a single shaft, driven by 12 horizontally opposed combustion chambers producing 540 horsepower at 3,000 rpm.

TTEG and China’s Aerospace Machinery and Electric Equipment Co. Ltd. (AMEC) entered into a strategic alliance, agreeing to collaborate on the engineering and technical development of the patented DCGT engine. Once developed, AMEC intends to produce 150 and 450 horsepower versions of the engine, and the companies expect each engine model will reduce fuel consumption by about one-third and dramatically reduce harmful emissions when compared to existing fossil-fuel burning engines. AMEC will have full access to the resources of Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd. in the engineering and development process. Once developed, the engine will be manufactured in Aerospace Mitsubishi’s state-of-the-art engine assembly plant, which currently produces 100,000 engines annually, and is expected to reach 15 million units annually when the facility is complete.

The Company recently entered into a strategic alliance with Tianjin Out Sky Technology Co. Ltd. (Tianjin), a leading Chinese bicycle parts manufacturer. The agreement specifies that TTEG and Tianjin will collaborate on the engineering and technical development of the DCGT engine for motorcycle engine applications. The agreement also stipulates the establishment of a joint venture to manufacture, market and sell the DCGT in China once the engine has been shown to have commercial potential. Tianjin has also committed to fund up to USD$10 million over the next 18 months for project development costs and to purchase up to 5% of the Company’s common stock on the open market. Because of their cost, size, and low emissions, motorcycles are very popular in China. Analysts expect more than 44.4 million two wheel, mechanically powered personal transportation units will be sold in China in 2011.

The inventor of the DCGT engine, Robert L. Scragg, developed an advanced version of its DCGT engine. In July 2009, the International Searching Authority has issued its written opinion stating that the Rotary Mechanically Reciprocated Sliding Metal Vane Air Pump and Boundary Layer Gas Turbines Integrated With a Pulse Gas Turbine Engine System (System) is a unique invention in its novelty, inventiveness and industrial applicability. This finding is the first step in securing patent rights to the engine throughout the world, and TTEG holds the exclusive license to develop and market the System worldwide.

Despite the global recession, China’s automobile sales saw a strong 2008, in which sales of private cars were up 28%. China’s auto sales rose to 7.2 million vehicles in the first seven months of 2009, up 23.4% from the year-earlier period, the China Association of Automobile Manufacturers said. Auto sales in China rose 63.6% in July from a year earlier to 1.09 million vehicles, the fifth straight month of more than 1 million vehicles sold, boosted by the domestic economic recovery and supportive government policies. China’s luxury car market is forecast to grow at double-digit rates for the remainder of this year, and the government is using tax incentives to drive the sales of smaller cars and light trucks which will appeal to lower income families.

TTEG targets the 18 wheel Class 8 vehicles commonly used for transporting goods throughout the United States for distribution of its engine. There are more than 5 million heavy-duty trucks in operation on American highways every day. In normal years, U.S. production of heavy duty interstate trucks in the Class 8 vehicles ranges from 200,000 to 300,000 units annually; each year, 700,000 new and replacement truck engines are sold in America, typically within the $13,500 to $25,000 price range. Due to economic slowdown, U.S. sales of medium- and heavy-duty trucks fell 43.8% in May 2009 from a year earlier to 16,654 vehicles. Demand for new heavy- and medium-duty trucks is expected to be down 45% for the full year and remain weak through the first half of 2010, ACT Research said in its latest North American Commercial Vehicle Outlook. The research firm predicted Class 8 heavy-duty truck production will show only modest gains in the first half of 2010 before rising in a second-half rebound.

Source: http://stockcharts.com/h-sc/ui

TTEG is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

The MACD for the Company currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

TTEG’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, the Company is trading near its upper Bollinger Band. This suggests that the stock price is high relative to its recent price action.

To date, the Company has no marketable products but it has completed initial testing of the 540 horsepower prototype. The Company is also working on distribution deals in China, which is world’s fastest growing and most resilient economy. In August, TTEG did a financing deal for $10 million USD with a further commitment to purchase up to 5% of its common stock via the public markets.

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Aug-16-2009	symbol	Share, $	$ Mn	2009	2010	2009	2010
Ford Motor Company	F	7.59	24,450	n/m	42.17	0.24	0.22
Caterpillar Inc.	CAT	47.83	29,720	31.89	27.65	0.9	0.9
Cummins Inc.	CMI	48.0	213.4	35.56	25.40	0.02	0.02
Fuel Systems Solutions Inc.	FSYS	31.61	555.8	19.27	16.05	1.48	1.20
Navistar International Corp.	NAV	47.09	3,310.0	17.19	10.26	0.29	0.28
Spartan Motors Inc.	SPAR	6.12	201.3	11.77	14.23	0.45	0.47
Median				19.27	20.72	0.37	0.38
Turbine Truck Engines Inc.	TTEG	0.69	22.1	n/a	n/a	n/a	n/a

Source: Thomson Financial, Yahoo! Finance, Analyst estimates.

Net Share Purchase Activity

Insider Purchases – Last 6 Months Shares Trans Purchases N/A N/A Sales N/A N/A Net Shares Purchased (Sold) N/A N/A Total Insider Shares Held N/A N/A % Net Shares Purchased (Sold) N/A N/A

Net Institutional Purchases – Prior Qtr to Latest Qtr Shares Net Shares Purchased (Sold) N/A % Change in Institutional Shares Held N/A

Data provided by Thomson Financial

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