U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] Annual Report Pursuant To Section 13 Or 15(d) Of The Securities
Exchange Act Of 1934
10-K/A
| x | Annual Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 |
For the fiscal year ended JanuaryJuly 31, 2004
----------------
[ ] Transition Report Under Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934
2008
| ¨ | Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 |
For the transition period from _____ to _____
COMMISSION FILE NUMBER:000-33391
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WHISTLER INVESTMENTS,
EV Innovations, INC.
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(Name
(Exact Name of small business issuerRegistrant as Specified in its charter)
NEVADA 98-0339467
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5001 East Bonanza Road, Suite 144-145
Las Vegas, Nevada 89110
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(Address of principal executive offices) (Zip Code)
Its Charter)
| NEVADA | | 88-0490890 |
| (State or other jurisdiction of | | (I.R.S. Employer |
| incorporation or organization) | | Identification No.) |
| 4894 Lone Mountain #168, Las Vegas NV | | 89130 |
| (Address of principal executive offices) | | (Zip Code) |
(702) 296-2754
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425-7376
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, PAR VALUE $0.001 PER SHARE
Check
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ¨ No x
Indicate by checkmark if the registrant is not required to file reports to Section 13 or 15(d)Of the Act.¨ Yes x No
Indicate by check mark whether the issuerregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.x Yes [X]¨ No [__]
Check
Indicate by check mark if there is no disclosure of delinquent filers in responsepursuant to Item 405 of Regulation S-BS-K (§229.405 of this chapter) is not contained in this form,herein, and no disclosure will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB10-K or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: NIL
State10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. (Check One):
Large accelerated filer ¨ | | Accelerated filer ¨ |
| | |
Non-accelerated filer ¨ | | Smaller reporting company x |
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.):
$64,762,252.80 based on the closing price for our shares of common stock of
$5.60 on April 23, 2004.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 20,083,683last business day of the registrant’s most recently completed second fiscal quarter was $27,988,214.
Number of shares of common stockCommon Stock outstanding as at April 23, 2004.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]of October 15, 2008: 23,347,257.
Documents incorporated by reference: None
EXPLANATORY NOTE
AS A PART OF THE REVIEW BY THE SECURITIES AND EXCHANGE COMMISSION OF THE COMPANY’S PAST FILINGS UNDER THE SECURITIES EXCHANGE ACT OF 1934, WE ARE FILING THIS AMENDMENT NO. 1 TO OUR FORM 10-K FOR THE YEAR ENDED JULY 31, 2008 (THE “2008 FORM 10-K”) THIS AMENDMENT NO. 1 AMENDS THE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THAT AUDITED THE FINANCIAL STATEMENTS OF THE COMPANY AS OF JULY 31, 2008. IN ORDER TO PRESERVE THE NATURE AND CHARACTER OF THE DISCLOSURES SET FORTH IN THE 2008 FORM 10-K AS OF NOVEMBER 12, 2008, THE DATE ON WHICH THE 2008 10-K WAS FILED, NO ATTEMPT EXCEPT AS DESCRIBED ABOVE HAS BEEN MADE IN THIS AMENDMENT NO. 1 TO MODIFY OR UPDATE DISCLOSURES, INCLUDING REFERENCE TO THE FACT THAT THE COMPANY SUBSEQUENT TO FILING OF THE 2008 10-K CHANGED ITS NAME TO EV INNOVATIONS, INC., EXCEPT THAT THE COMPANY’S NEW NAME IS USED ON THE COVER AND SIGNATURE PAGES TO THIS REPORT AND IN THE EXHIBIT 31 AND 32 CERTIFICATIONS, AND THE OFFICERS AND DIRECTORS OF THE COMPANY AT THIS TIME ARE SIGNING THIS AMENDMENT NO. 1.
PART I
NOTE REGARDING FORWARD LOOKING STATEMENTS
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Annual Report contains historical information as well as forward-looking statements. Statements looking forward in time are included in this Annual Report pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. We wish to caution readers that in addition to the important factors described elsewhere in this Form 10-KSB,10-K, the following forward looking statements, among others, sometimes have affected, and in the future could affect, our actual results and could cause our actual consolidated results during 2004,2008, and beyond, to differ materially from those expressed in any forward-looking statements made by or on our behalf.
ITEM
Item 1. DESCRIPTION OF BUSINESS.
Business.
Background
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Whistler Investments,
Hybrid Technologies, Inc. ("we", "us"“us", the "Company" or "Whistler""Hybrid Technologies") was incorporated under the laws of the State of Nevada in April 2000. We are a development stage technology company. We are engaged in the development and marketing of electric powered vehicles and products.
We changed our name from Whistler Investments, Inc. to Hybrid Technologies, Inc. on March 9, 2005 to reflect our corporate focus. Since our incorporation, we
have been involved in the evaluation ofevaluated various business opportunities including
the exploration of the Queen Mineral Propertya mineral property in British Columbia; the Azra Shopping Center in Las Vegas, which we acquired on April 10, 2002, and disposed of on January 1, 2003; a Vancouver based coffee franchise;
producing oil and gas properties in California; and a medical software product
and services company.
To date,We did not pursue several of these opportunities, and none of these business opportunities
has resulted
in our generation ofproduced meaningful revenue.
Following the sale of the Azra shopping center near the end of our
fiscal year ended January 31, 2003, and our determination made in the first
quarter of our last fiscal year not to pursue acquisition of a medical software company, we began to focus our efforts on the development and marketing of electric powered vehicles and products.
In order
Recent Developments
Effective April 15, 2008, we entered into two material agreements with respect to beginour subsidiary Zingo, Inc., the name of which was subsequently changed to takeSuperlattice Power, Inc. (“Superlattice”).
Sale of Our Subsidiary
Pursuant to a Stock Purchase Agreement dated April 15, 2008 (the “Stock Purchase Agreement”), with Blue Diamond Investments Inc. (the “Purchaser”), at a closing held on April 18, 2008, we sold the necessary steps80,000,000 shares of common stock of Superlattice held by us to beginthe Purchaser for $215,000. The sale price approximated the independent valuation of $214,921 for our interest in Superlattice that we received from a certified general appraiser as of December 10, 2007. Our stockholders, at our annual meeting held on December 21, 2007, discussed and approved the sale of our interest in Superlattice for this price. Pursuant to implement our
new business strategy,the Stock Purchase Agreement, we also assigned to the Purchaser all receivables or debt obligations of Superlattice owing to or held by us at March 31, 2008.
License Agreement for Our Lithium Ion Battery Technology
Effective April 15, 2008, we entered into a licensing agreementLicense Agreement (the “License Agreement”) with NuAge
Electric, Inc. ("NuAge"Superlattice providing for our license to Superlattice of our patent applications and technologies for rechargeable lithium ion batteries for hybrid vehicles and other applications (“Licensed Products”), whereby.
Under the License Agreement, we have the right to purchase our requirements of lithium ion batteries from Superlattice, and our requirements of lithium ion batteries shall be supplied by Superlattice in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of Superlattice. Our cost for lithium ion batteries purchased from Superlattice shall be Superlattice’s actual manufacturing costs for such batteries for the fiscal quarter of Superlattice in which our purchase takes place.
Superlattice has agreed to acquireinvest a license, subjectminimum of $1,500,000 in each of the next two years in development of the technology for the Licensed Products.
Effective May 1, 2008, Superlattice leased approximately 5,000 square feet of space (“Leased Space”) in our North Carolina facility, such Leased Space to a
20% royalty interest retainedbe suitable for, and utilized by NuAge, to all of NuAge's rights relatingSuperlattice for, Superlattice’s developmental and manufacturing operations for Licensed Products pursuant to the manufacture and saleLicense Agreement. The Leased Space is leased on a month-to-month basis at a monthly rental of two and three wheel electric vehicles using an electric
power drive system technology licensed by NuAge from Nu Pow'r, LLC.
On October 21, 2003,$2,500, the original licensing agreement between Whistler
and NuAge was terminated. We subsequently entered into a new licensing and
distribution agreement with RV Systems, Inc. ("RV Systems")monthly rental to acquire the
worldwide rights (with the exception of Indiabe escalated five (5%) percent annually. Effective April 16, 2008, we also sold to Superlattice for the two-purchase price of $29,005, specified equipment and three-wheeled
vehicle technology)supplies related to sell, distribute and/or manufacture specified products
utilizing the portable power systems developed by RV System's affiliate,
Lithium House, Inc. ("Lithium House"). RV Systems is the licensee of Lithium
House for all product developmentLicensed Field.
Liquidity and applications of portable power systems
utilizing Lithium House's proprietary lithium battery technology.
Our agreement with RV Systems includes licensed technologies in three
separate product groups: (i) two- and three-wheeled vehicles to be manufactured
and sold in all countries except India; (ii) lawn and garden equipment to be
manufactured and sold in all countries; and (iii) Neighborhood Electric Vehicles
(NEV's) to be manufactured and sold in all countries. We have also entered into
an agreement to retain the services of Mr. Chaz Haba, the founder of Lithium
House, to provide technical advice to Whistler's Board of Directors. Mr. Haba
has a strong technology background, as one of the engineers involved in the
tooling of the microprocessor at the beginning of Intel, and one of the early
investors in Apple Computers in the 1970's.
Capital Resources
As of JanuaryJuly 31, 2004, Whistler2008, we had cash on hand of $169,428. As of
January 31, 2004, Whistler's$101,095. At that same date our liabilities totaled $695,205 and primarily
consisted of a notes payable in the amount of $553,983 due to a shareholder in
connection with the acquisition of Azra Center and advances by the stockholder
to Whistler.$6,685,173. During the period since its inception on April 12, 2000 to JanuaryJuly 31, 2004, Whistler2008, we had incurred net operating losses from continuing operations totaling $5,728,483.$50,736,407. On JanuaryJuly 31, 2004, Whistler2008, we had a working capital deficiencydeficit of $525,777$78,640 and a stockholders' deficit of $90,933.
$4,127,965.
We had
20,083,68323,347,257 shares of common stock
issued and outstanding as of
April 23,
2004.October 15, 2008. Our common stock is traded on the OTC Bulletin Board.
On February 25,
2004, we announced that our Board of Directors had approved a three-for-one
forward stock split, which was effective Wednesday, March 10, 2004. Stockholders
of record were entitled to three shares of common stock for each share of common
stock held on that date.
General
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We are a developmentearly stage technology company. We are engaged in the
developmentdeveloping and marketing of electric powered vehicles and products, which would
beproducts.
Our Electric Battery Pack and Vehicle Technology
After the applicationstermination of advanced lithium battery technology developed by Lithium
House, utilizing the Lithium Portable Power System technology developed by Mr.
Chaz Haba. We have preliminary agreements with the Motorcycle Division and the
International Trade Division of Geely Corporation, China.
We have placed our technology development into three divisions, each a
wholly owned subsidiary of the Company, and allocating theall licensing rights for
the various applications into each applicable division. Global Electric Corp.
will hold the licensing rights for all product development other than
four-wheeled vehicles. R-Electric Car Co. will hold the licensing rights for
product development for all four-wheeled vehicles. Solium Power Corp. will hold
the rights for the advanced Lithium/Solar Power System technology developed by
Mr. Chaz Haba, for application to residential and commercial properties.
Under the license agreementrelationships with RV Systems and Lithium House, our initial licensor of battery technology, we began developing portable battery power pack technology and effecting vehicle conversions from conventional power systems to electric power systems in our own facility which we signed on October
21, 2003 (the "License Agreement"),have purchased in Mooresville, North Carolina. We have commenced marketing conversions of four-wheel vehicles in 2007 and 2008.
In our Mooresville, North Carolina, facility we have Converted and tested vehicles based on Chrysler PT Cruiser, Crossfire, Mini Cooper, Pontiac Vibe and Mercedes’ Smart car. We replaced the worldwide rights to
commercialize applications of Lithium House's lithiumgasoline power systems with all electric power systems and battery technology to
two-, three-management systems. We also convert some large and four- wheeled vehicles (except two-small ATV's, electric bicycles and electric scooters. We are converting three-wheeled vehicles, such as small ATV's and vehicles for India), lawnhandicapped persons. We are developing a rapid charge system that we anticipate reducing charge time by 65%.
Our Mooresville facility consists of about 40,000 square feet of space.Some equipment at the facility includes a metal working lathe, metal welders, work tables, grinders, a metal cutting machine, several car lifts, power supplies and garden equipment, watercraft, and the worldwide rights to
the advanced Lithium/Solar Power System technology for application to
residential and commercial properties.
Lithium House was founded in 2002 by Charles Haba and designs and
builds lithium ion and lithium polymerchargers. We are also setting up a battery packs and systems. Prior to the
foundinglab that Superlattice will use of Lithium House, Mr. Haba was involved in the founding of Planet
Electric, Inc. (see description under "Item 3. Legal Proceedings" of litigation
filed by a stockholder of Planet Electric, Inc.). Lithium Houseapproximately 5,000 square feet, which is dedicated to
applying its proprietary methods of lithium battery technology to improve
performance and reliability for everyday power needs. With its substantial
experience building lithium battery systems, Lithium House can provide the exact
battery and charger configurations for virtually any application.
Our Licensed Technology
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Under the License Agreement, we own the rights to utilize the lithium
ion and lithium polymer battery packs, proprietary controllers and propulsion
systems developed by Lithium House in any two-wheel, three-wheel and four-wheel
vehicles, as well as any lawn and garden equipment (with the exception of India
for the two- and three-wheeled vehicle technology).
80% completed.
The Lithium House Battery Packs We Would Use
The electric vehiclevehicles’ battery pack performs the same function as the gasolinegas tank in a conventional vehicle: it stores the energy needed to operate the vehicle. We would not be in the business of building battery cells. Lithium
House stocks thousands of batteries and has relationships with manufacturers in
Korea and China that are capable of large scale production of battery packs.
Lithium House'suse battery packs can be producedcreated in-house from Kokam cells in wide variety of sizes,
capacities and voltages as requiredour converted vehicles. We anticipate using cells created by the particular product application.
Lithium House offers battery and charging solutions in seven broad
product areas: computers, portable power (such as portable generators ranging
from purse-size to rolling generators on wheels), cameras, lighting (including
lighting belts and power sources for motion picture cameras, video, sound and
production equipment with ranges of 4 to 120 volt applications),
recreational/transportation applications (including two- and three-wheeled
vehicles and small cars), camping (primarily power packs) and hobby and RC
control models.
Lithium House uses individual lithium ion cells that have 4.2 volts DC
and 2.2 amps each and are welded in such a manner (in parallel and series) to
provide up to 224 volts DC and 86.016 KW (thus a battery pack can contain up to
thousands of the individual cells) depending on the voltage and number of amps
required. The battery pack may contain many "packs" of the cells each in a ABS
protection shell for protection against abrasion and moisture and will have a
separate thermal cut off circuit to prevent over heating and control circuits
that will monitor the voltage during discharge and charging to ensure that the
pack does not go below a minimum voltage or above a maximum.
Superlattice by late 2009.
Electric Motors
We are using a variety of electric motors in our prototypes.converted vehicles. We are not reliant on any single manufacturer of electric motors. There are a large number of domestic and foreign manufacturers of electric motors, and we anticipate no
difficulties in obtaining adequate quantities of the motors with the specifications we require will be available at reasonable commercial prices from a number of these sources.
We believe that an important characteristic of our technology is the lithium battery power source we intend to use is more efficient and powerful than other battery power sources. Vehicles utilizing this technology have the ability to travel far greater distances, can recharge in less time and also benefit from weight reduction, as compared with vehicles using other battery powered systems. One of the major historic hurdles facing electric vehicle manufacturers is that most power sources would not allow the vehicle to travel over 100 miles before needing to be recharged. We believe that we can produce electric powered vehicles with a travel range equal to or greater than 200 miles.
A significant difference between electric vehicles and gasoline-powered vehicles is the number of moving parts. The electric vehicle motor has one moving part, the shaft, which is very reliable and requires little or no maintenance, reducing repair costs. Whereas the gasoline-powered vehicle’s motor has numerous moving parts, requiring a wide range of maintenance. The controller and charger are electronic devices with no moving parts, and they require little or no maintenance. Electric vehicle batteries are sealed and maintenance free, However, the life of these batteries is limited, and batteries will require periodic replacement. New batteries are being developed that will not only extend the range of electric vehicles, but will also extend the life of the battery pack which may eliminate the need to replace the battery pack during the life of the vehicle.
Products Under Development
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We have products under development in the following categories.
NEV's
A
We have converted golf carts, a type of neighborhood electric vehicle or(NEV). A NEV is a 4-wheeled vehicle, larger than a go cart but smaller than most light-duty passenger vehicles. NEV's are usually configured to carry two or four passengers with a pickup bed. NEV's are defined by the United States National Highway Traffic Safety Administration as subject to Federal Motor Vehicle Safety Standard (FMVSS} No. 500. Per FMVSS 500, NEV's have top speeds between 20 and 25 miles per hour and are defined as "Low Speed Vehicles". FMVSS 500 requires that NEV's be equipped with headlamps, stop lamps, turn signal lamps, tail lamps, reflex reflectors, parking brakes, rear view mirrors, windshields, seat belts, and vehicle identification numbers. About 35 states have passed legislation or regulations allowing NEV's to be licensed and driven on roads that are generally posted at 35 miles per hour or less. While NEV'sNEV’s were initially used in gated communities, they have been increasingly used by the general public for school transportation, shopping and general neighborhood trips. In addition, they are used at military bases, national parks, commercial airports and for local government activities.
We are developing an electric car
ATV's and
have under development the "R
car". We are developing the R Car to carry four passengers, to reach speeds of
up to 90 miles per hour and to have a range of approximately 200 miles.
We believe that the most important characteristic of our technology is
that the Lithium House battery power source we intend to use is much more
efficient and powerful than other battery power sources. Vehicles utilizing this
technology have the ability to travel far greater distances, can recharge in
less time and also benefit from weight reduction, as compared with vehicles
using other battery powered systems. One of the major historic hurdles facing
electric vehicle manufacturers is that most power sources would not allow the
vehicle to travel over 100 miles before needing to be recharged. We believe that
we can produce electric powered vehicles with a travel range greater than 200
miles.
A significant difference between electric vehicles and gasoline-powered
vehicles is the number of moving parts. The electric vehicle motor has one
moving part, the shaft, whereas the gasoline-powered vehicle's motor has
numerous moving parts. Fewer moving parts in the electric vehicle leads to
another important difference: the electric vehicle requires less periodic
maintenance and is more reliable. The gasoline-powered vehicle requires a wide
range of maintenance, from frequent oil changes filter replacements, periodic
tune ups, and exhaust system repairs, to the less frequent component
replacement, such as the water pump, fuel pump, alternator, etc. The electric
vehicle's maintenance requirements are fewer, and therefore the maintenance
costs are lower. The electric motor's one moving part, the shaft, is very
reliable and requires little or no maintenance. The controller and charger are
electronic devices with no moving parts, and they require little or no
maintenance. Electric vehicle batteries are sealed and are maintenance free,
However, the life of these batteries is limited, and batteries will require
periodic replacement. New batteries are being developed that will not only
extend the range of electric vehicles, but will also extend the life of the
battery pack which may eliminate the need to replace the battery pack during the
life of the vehicle. Lawn and Garden Equipment
We have not commenced active product development in the lawnconverted ATV's, including four small two-passenger ATV's and garden
equipment product category.a four-wheel drive, two-passenger ATV with a truck bed. We plan to approach major manufacturers of these
products with regard to joint product development.
ATV's
We have completed conversion of ATV's that are now being tested. We
have also developed what we view as a next generation ATV with four-wheel independent suspension.suspension produced by a major ATV manufacturer. This is planned to be the first “stealth" (or totally quiet) ATV. This ATV was displayed at the Globe 2004 exposition in Vancouver, B.C., Canada. We have also converted some lawn and garden equipment.
Converted Vehicles Currently Being Marketed
All of our converted vehicles that we offer for sale are displayed on our corporate website http:/www.hybridtechnologies.com. All of our vehicles are converted from models currently offered by automobile manufacturers. We have sold 11 vehicles as of the date of this report, including the following models: the LiV (Lithium Vehicle) Dash, a small (only 98 inches long) two-seater capable of 80 mph and a range of 120-150 miles on a full charge); the LiV Surge, a small four-door vehicle converted from a U.S. manufacturer with acceleration from 0-60 in under 10 seconds and a range of 100-120 miles; the LiV Rush, a converted two-seater sports car that does 0-60 in five seconds with a range of approx 150 miles; the LiV Wise, a compact two door, able to reach speeds over 75 mph and with a range of approx 120 miles; and the LiV Flash, our most popular model, a two door compact converted from a European model that is able to cruise at well over 80 mph with a range of 110-120 miles.
We also offer the LiV Ryder converted motorcycle, custom made to the customer’s specifications, attainable speeds of over 70 mph and a range of over 40 miles; the LiV Cruz, an ergonomically correct bicycle with pedal power for back-up that is capable of speeds over 20 mph when using battery power; the LiV Bulldog, an ATV able to reach 45 mph with a range of over 40 miles and seating for two, four-wheel drive and a cargo area;
Current Joint Venture
Activities or Negotiations in Progress
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China
Upon invitation from Geely Corporation, we and Mr. Chaz Haba have traveled to
China and met with the Motorcycle Division and the International Trade Division
of Geely Corporation. We are currently in the process of incorporating in China
to position ourselves for pursuit of joint ventures. We have signed an agreement
with Geely for a proposed joint venture and are now in the initial stages of
drafting the formal joint venture agreement.
India
We are currently in discussions with Loveson of Bombay India for the
manufacture of bicycles to be converted into electric bikes.
Powerski
On December 30, 2003 we announced that we started a joint venture with
Powerski International, to create another model of Powerski's flagship product,
the Powerski Jetboard(TM), powered with a Lithium-ion electric motor. We
anticipate testing this board during the second quarter of 2004. Upon
completion, our objective is for the board to travel at 30 to 40 MPH, for over 1
hour.
U.S. Navy
On February 5, 2004 we announced the initiation of a lithium-ion conversion project with the United States Navy. The project will serve as a
trial, and the development and implementation of this project will take place
within our facilities in Van Nuys, California. We have funded the initial 3kw prototype for this project, and we anticipate the prototype willhas been completed and delivered to the Navy.
New York City Taxi Commission
The NYC Taxi Commission agreed to test a PT Cruiser which was delivered January 2007. The converted PT Cruiser Taxi was driven for two months in New York City. The project was stopped early due to several factors, the primary being that an electric vehicle cannot be ready for
testing byrun 24 hours a day, seven days a week. Daily down time is required to charge the Navy in the second quarter of 2004.
Electric Cars
We are working with California-based Cinema Vehicles to develop and
build what we have designated as the "R-Car". Cinema Vehicles is the oldest and
one of the largest motion picture vehicle service companies in the world. They
have worked on major Hollywood productions such as T3 and Austin Powers. The
anticipated use for the R-Car is for medium to long-range trips, as well as
neighborhood use.
The motor was balanced, matched to a 6-speed transmission, and tested
in April 2004. Mr. Haba and his engineers have been working closely with Cinema
Vehicles regarding the mechanical aspects of this development -- we are
anticipating that this vehicle will be able to travel at speeds up to 90 mph
with a range of up to 200 miles.vehicle. The vehicle is currently under testing.
Austin Energy
On March 1, 2004, we announced that a letter of understanding between
Whistler Investments, Inc.has been returned and the City of Austin had been executedproject is completed.
Paratransit
Paratransit, Sacramento, California, a company providing community transportation services, purchased two converted PT Cruisers. The two vehicles were delivered in respect
to the conversion of vehicles for the City of Austin, TX, subsequent to a senior
level meeting between Mark Kapner, Senior Strategic Planner for the City of
Austin, Mr. Chaz Haba and representatives of Whistler, at their development
facility at Lithium house in Van Nuys, California.
November 2006.
NASA
We have
purchasedsigned a
2004 Chrysler PT Cruiser -- we are commencing work
on the prototype for Austin Energy,Space Act agreement with NASA and
hope to have it ready for testing in the
second quarter of this year.
Solium Power Corp.
Our Lithium Solar House ("LSH") project will be under the direction of
Chaz Haba and is to provide a test bed for an alternative source of power to the
home -- not connected to the power grid. The power source will be Solar Panels
for charging of the Lithium Ion Batteries, which are used for storage of the
power. The system will supply DC power for the home and all appliances (using
from 12 volts to 48 volts), lighting, heat, air, etc., and will involve a site
in Van Nuys, California. We have now received the approved plan and are
currently renovating this Solar House. Construction completion and testing is
anticipated by Summer 2004.
Other Initiatives
We believe that the keys to our success in the future will be to
aggressively pursue the most opportunistic markets and to concentrate our
resources on the market(s) that have the most return for the time and effort
expended. We are in negotiations with a municipal government agency in Canada.
We have also initiated a project aimed at converting pre-existing vehicles in
Latin America to electric propulsion units. Negotiations for the conversion of several vehicles are now underway. It is anticipated thatbeing tested by NASA at the first conversions
will be taxi cabs locatedKennedy Space Center in Mexico City. Mexico City has the world's worst air
pollution, according to the United Nations, due primarily to vehicle emissions.
The zero-emission vehicle projects are aimed at reducing harmful contaminants in
the city's air, while providing usable cost-efficient alternate energy sources
in public transit vehicles.
Discussions have been commenced with United Nations officials to place
electric vehicles in the five most polluted cities in the world. If these
discussions are successfully consummated, the presence these vehicles in these
cities could lead to relationships with governments on national levels.
We are in discussions with several large chain stores, one in Europe
and several in the United States about carrying our products in their stores. Florida.
Solar House
We are also evaluating using infomercialsparticipating to showcase our technology in 2004a “green” home in Calgary, Alberta.
California Highway Patrol
Hybrid Technologies funded a lithium-powered bike to promote saleshonor officers killed in the line of our products.
Manufacturing
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duty. This bike, produced by Big Bear Choppers, was displayed throughout California during the first week of May 2005 at media events honoring slain troopers, and will be kept in the CHP museum.
Arcadis
In September 2007, we signed a contract and have converted and delivered a PT Cruiser to Arcadis, a contractor to the U.S. Environmental Protection Administration.
Canadian Ministry of Transportation
We intendsigned an agreement in June 2007, pursuant to manufacturewhich the lithium power paksCanadian Ministry of Transportation purchased a Smart Car and PT Cruiser, both of which have been delivered. The Smart Car has been returned and we are refunding the purchase price, since the vehicle did not fall within the criteria for Canadian testing.
Holiday 2007
Hybrid was featured as Sam’s Club’s once in Chinaa lifetime package and Korea, anda Smart Car with a trip to market them by way of infomercials, as well as by utilizing distributors in
Canada and the United States.
NASA was sold to a Sam’s Club member. Other members were allowed to purchase similar Smart Car conversions at reduced pricing, with one other Smart Car sold at that price.
Competition
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The discussion below identifies some of our principal competitors in
the electric vehicle and bicycle areas.
General Motors’ Chevrolet division is developing its model named “Volt”, an electric car, with a scheduled launch in the 2011 model year.
The Reva ElectricLightning GT is a battery powered sports car manufactured by the UK company British Lightning Car Company basedthat is scheduled to go on sale in Bangalore, India, was
incorporated2009. The expected price is about $200,000.
The Buddy is a Norwegian electric car manufactured by Elbil Norge AS. The car is capable of 40-80 km range per charge.
The Joule is a South African 6-seater electric car produced by Optimal Energy that is scheduled to go on sale in 19952010.
The Phoenix SUV and SUT are produced by Phoenix Motorcars in Ontario, California. Both models use lithium titanate batteries and have a range of approximately 130 miles.
The Smart EV is modified by Zytek Electric Vehicles with a range of about 62 miles.
The Tesla Roadster is the first production car by Tesla Motors. It is capable of a range of 200 miles with a top speed of 135 mph. The first were scheduled to be delivered in 2008, but as a joint venture betweenof yet deliveries have not commenced.
The Th!nk City is the Bangalore based Maini Grouponly crash tested and AEVT Inc of Irvindale, California, to manufacturehighway certified electric vehicles for city
mobility. This company produces a two-door sedan seating two adultscar in the frontworld. The vehicles are manufactured in Aurskog, Norway and two children at the back.
ZAP, headquartered in Santa Rosa, California,are capable of a 190mi range.
The Venturi Fétish is a principal competitortwo-seater electric sports car produced by Venturi in electric cars, electric bicycles, electric scooters, seascooters, and other
electric products.
Powabyke, headquartered in Bath, United Kingdom, offersMonaco.
The Commuter Car T600 is a
widethree-wheeled $108,000 car with a range of
electric bikes in the UK and worldwide.
Our Portable Power System License Agreement
- -------------------------------------------
On October 21, 2003, the original Licensing Agreement between the
Company and Nu Age Electric Inc that we had entered into on June 27, 2003, was
terminated. This original Licensing Agreement covered the license to us, through
Nu Age Electric Inc., of certain of the products described below that we now
license directly from Lithium House. Each party to the amendment terminating
this licensing agreement agreed to indemnify the other party and hold it
harmless from and against any and all losses, damages, liabilities, costs and
expenses (including, but not limited to, any and all expenses reasonably
incurred in investigating or defending against any litigation commenced or
threatened or any claim whatsoever) which the indemnified Party may sustain or
incur resulting from actions of the indemnifying party in connection with that
licensing agreement or the breach80 miles manufactured by the indemnifying party of any material
representation, warranty, or covenant made by it in that licensing agreement.
On October 21, 2003, we entered into our current License Agreement with
RV Systems, Inc., a Nevada corporation, for the worldwide arena (with the
exception of India for the two- and three-wheeled vehicle technology) to sell,
distribute and/or manufacture (or arrange for the sale, distribution or
manufacture of) specified products utilizing the portable power systems (the
"Licensed Technologies"), developed by Lithium House, with principal offices
located in Van Nuys, California. Lithium House is an affiliate of RV Systems,
and has licensed all product development to RV Systems for the two-, three- and
four- wheel vehicles, watercraft, the solar house and a non-exclusive license
for battery power packs.
The License Agreement with RV Systems covers Licensed Technologies in
three separate product groups: two- and three-wheeled vehicles to be
manufactured and sold in all countries of the world except India; lawn and
garden equipment to be manufactured and sold in all countries of the world; and
Neighborhood Electric Vehicles to be manufactured and sold in all countries of
the world.
Two- and Three-Wheeled Vehicles
1. Motorcycle product - Identification/model: Stealth H (Harley type)
2. Two-Wheel Vehicle - Identification/model: Stealth V (Vespa-type
scooter)
3. Two-Wheel Bicycle - Recumbent style with motor in the front wheel and
batteries in the bicycle frame
4. Three-wheel bicycle or a three-wheel motorcycle, commonly referred to
as trikes or Tuk-Tuk's (as in the Thailand style three-wheel taxis).
Lawn and Garden Equipment
Lawn and garden will include two and four wheel electric mowers. It will also
include leaf blowers and any electric rotating lawn tool (e.g., edgers,
roto-tillers).
Neighborhood Electric Vehicles
Neighborhood electric vehicles include four wheel neighborhood electric vehicles
("NEV's")
Subject to the terms of this License Agreement, RV Systems, as
Licensor, has granted to us, during the term of the License Agreement, and upon
the terms and conditions set forth in the License Agreement, a non-assignable
right and license to market, sell, manufacture, and distribute the Licensed
Technologies in all countries of the world, with the exception of India for two-
and three-wheeled vehicles. We have the right, upon receipt of written approval
and due diligence by the Licensor, to sublicense any of the rights and licenses
granted in the License Agreement to or enter into distribution agreements with
third parties ("Sublicensees") with the written consent of Licensor to the
sublicense or distribution agreement and the approval of Licensor of the related
agreement or agreements with the particular Sublicensee, which consent or
approval shall not unreasonably be withheld.
The term of the License Agreement commenced on October 21, 2003, and
continues for a period of five License Years. NEV's were added to the Licensed
Technologies on November 14, 2003. The term is automatically renewed for three
succeeding License Years unless earlier terminated by either party upon not less
than 90 days prior written notice to the other of intent to terminate.
The Company is required to pay the Licensor the technology payments
(the "Technology Payments") (to be paid to Lithium House) as specified in the
License Agreement ($100,000 for two- and three-wheeled vehicles, and $50,000 for
lawn and garden equipment) to be paid on or before October 31, 2003. For NEV's
we are required to pay $250,000 no later than December 31, 2003, with a weekly
minimum of $15,000. We are also required to pay Licensor product development
payments of $400,000, on or before December 31, 2003, with a weekly minimum of
$15,000, for two- and three-wheeled vehicles; $200,000 for lawn and garden
equipment, on or before December 31, 2003, with a weekly minimum of $15,000; and
$1,000,000, payable no later than March 31, 2004, with a weekly minimum of
$35,000 for NEV's ("Product Development Payments"). We have signed additional
amendments to the License Agreement as of January 5 and February 2, 2004,
covering power systems for watercraft and solar houses, respectively. These
additional agreements require payments of approximately $2,000,000. As of April
30, 2004, we have paid an aggregate of $1,535,544 in license payments to RV
Systems, and are continuing weekly license fee payments of approximately
$35,000, as per a supplemental agreement with RV Systems.
As reimbursement to the Company, Licensor is required to pay to us the
proceeds from any sales by Licensor of product inventory manufactured with the
financing provided by the Product Development Payments as and when that product
inventory is sold by Licensor.
We (or our Sublicensees) are required to pay royalties to Licensor as
to be specified for each of the Licensed Technologies, or products or
applications utilizing such Licensed Technology, in the License Agreement
("Royalties"). The particular royalty payment levels are to be agreed upon when
we enter into sublicense agreements or commence manufacturing or distribution
operations ourselves. We are responsible for the collection of any Royalty
payments due from our Sublicensees and remittance of such royalty payments to
the Licensor, unless direct payment of royalties to Licensor by a Sublicensee is
provided for in the applicable Addendum to the License Agreement.
If the Company fails to make any payment due under the License
Agreement, (a) we are obligated to pay interest thereon from and including the
date such payment becomes due until the entire amount is paid in full at a rate
equal to three percent (3%) per annum over the prime rate charged by CitiBank,
N.A., New York as of the close of business on the date the payment first becomes
due, but in no event greater than the highest rate permitted by law; (b) if such
a default shall continue uncured for a period of sixty (60 days) after written
notice is received by the Company, the Licensor then shall have the right to
terminate the License Agreement immediately upon notification to us by the
Licensor to terminate. If such default is by a Sublicensee, we shall provide the
notice referred to above and shall follow Licensor's instructions as to
termination of the particular Sublicensee's rights as to the Licensed
Technologies.
We shall have the option of preventing the termination of the License
Agreement by taking corrective action that cures the default, if such corrective
action is taken prior to the end of the 60-day cure period and if there are no
other defaults during such time period. If the Licensor or the Company otherwise
fails to perform any of the material terms, conditions, agreements or covenants
in the License Agreement on its part to be performed (hereinafter referred to as
"other default") and such other default is not curable, or if such default is
curable but continues uncured for a period of sixty (60) days after notice
thereof has been given to the defaulting party in writing by the other party or
all reasonable steps necessary to cure such other default have not been taken by
the defaulting party within sixty (60) days after notice thereof has been given
to the defaulting party in writing by the other party or all reasonable steps
necessary to cure such other default have not been taken by the defaulting party
within such sixty (60) day period, the other party at its sole election may
terminate the License Agreement forthwith by written notice. If we file a
petition in bankruptcy, are adjudicated as bankrupt or file a petition or
otherwise seek relief under or pursuant to any bankruptcy, insolvency or
reorganization statute or proceeding or if a petition in bankruptcy is filed
against us, which is not vacated within sixty (60 ) days, or we become insolvent
or make an assignment for the benefit of its creditors or a custodian receiver
or trustee is appointed for us or a substantial portion of our business assets,
which is not discharged within sixty (60) days, the License Agreement by its
terms terminates automatically and forthwith. No assignee for the benefit of
creditors, custodian, trustee in bankruptcy or any official charged with taking
over custody of our assets or business shall have any right to continue the
License Agreement or to exploit or in any way use the Licensed Technologies if
the License Agreement terminates; provided, however, that a termination under
the License Agreement as to a particular Sublicensee and Licensed Technologies
to that Sublicensee would not affect the validity of the License Agreement or
our status under the License Agreement or that of other Sublicensees not in
default.
Subsidiaries
We are restructuring by putting in place three divisions, each a wholly
owned subsidiary of Whistler, incorporated after year end, and allocating the
licensing rights for the various applications into each applicable division.
Global Electric Corp will hold the licensing rights for all product development
other than four-wheeled vehicles. R-ElectricCommuter Car Co. will hold the licensing
rights for product development for all four-wheeled vehicles. Solium Power Corp
will hold the rights for the advanced Lithium/Solar Power System technology
developed by Mr. Chaz Haba, for application to residential and commercial
properties.
Corporation.
Employees
As of the date of this report, we do not have any35 employees, other thanincluding our President and CEO, Holly Roseberry.
Roseberry, and her assistants at the corporate office, as well as the conversion crew in Mooresville, North Carolina.
Research and Development Expenditures
- -------------------------------------
We incurred research and development expenditures of $20,268$1,009,483 in our fiscal year ended JanuaryJuly 31, 2004. We incurred no such expenditures2007, and of approximately $1,402,077 in our prior fiscal year.
year ended July 31, 2008.
Patents and Trademarks
Neither
The Company has filed provisional patent applications with the Company, nor Lithium House or RV Systems, owns, either
legally or beneficially, any patents or trademarks.U.S. Patent and Trademark Office (“USPTO”) for three of our inventions relating to our battery management system, cathode material and an ultracapacitor. We have filed a trademark application with the USPTO for “Hybrid Technologies”, and a revised filing in April 2007, which received an initial refusal office action by the USPTO staff in May 2007. We plan to appeal this decision.
Item 1A. Risk Factors
- ------------
Factors.
You should be particularly aware of the inherent risks associated with our business plan. These risks include but are not limited to:
General
WE ARE A DEVELOPMENT STAGE BUSINESS
We have had nominimal revenues from joint ventures orand sales of our products,
norproducts. We have wenot signed any definitive joint venture agreements to commercialize any of our products. As of April 23, 2004,July 31, 2008, we had cash on hand of $1,201,459. As of
January 31, 2004, Whistler's$101,095. At that same date our liabilities totaled $695,205 and primarily
consisted of a notes payable in the amount of $553,983 due to a stockholder in
connection with the acquisition of Azra Center and advances to the Company made
by that stockholder.$6,685,173. During the period since its inception on April 12, 2000 to JanuaryJuly 31, 2004, Whistler2008, we had incurred net operating losses from continuing operations totaling $5,728,483.$50,736,407. On JanuaryJuly 31, 2004, Whistler2008, we had a working capital deficiencydeficit of $525,777$78,640 and a stockholders' deficit of $90,933.
$4,127,965.
We expect that we will continue to incur operating losses in the future. Failure to achieve or maintain profitability may materially and adversely affect the future value of our common stock.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
Our current operating funds and revenues from converted vehicle sales are less than necessary to complete the
license payments to RV Systems for commercialization of our products, utilizing
Lithium House portable power systems under the License Agreement, and therefore we will need to obtain additional financing in order to complete our business plan. Our business plan will require substantial additional financing in
connection with the initial commercialization of the products under the License
Agreement.
We do not currently have any arrangements for financing and we may not be able to find such financing if required. Obtaining additional financing would
be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
WE HAVE BEEN
AND CONTINUE TO BE THE SUBJECT OF A GOING CONCERN OPINION FROM OUR INDEPENDENT AUDITORS, WHICH MEANS THAT WE MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS WE OBTAIN ADDITIONAL FUNDING
Our independent auditors have added an explanatory paragraph to their audit opinions, issued in connection with our financial statements, which states that our ability to continue as a going concern is uncertain. Our financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
WE ARE SUBJECT TO ALL OF THE RISKS OF A NEW BUSINESS
Because we have only recently commenced
Our business operations are relatively recent; therefore we face a highpotentially higher risk of business failure. We haveOur sales revenues are still not earned any revenuessignificant as of the date of this report. Potential investors should be aware of the difficulties normally encountered by newnewer companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the many problems including expenses, difficulties, complications, and delays encountered in connection with the commercialization of the products under the License Agreement. These potential
problems include, but are not limited to,our products. unanticipated problems relating to product development, problems arranging and negotiating arrangements with
sublicensees or joint venture partners, and additional costs and expenses that may exceed current estimates. We have nolimited history upon which to base any assumption as to the likelihood that our business will prove successful, and investors should be aware that there is a substantial risk that we wouldmay not generate any significant operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
Because we have only recently commenced business operations, we expect to incur operating losses for the foreseeable future
OUR MANAGEMENT HAS LIMITED EXPERIENCE IN PRODUCTS UTILIZING ELECTRIC BATTERY POWER AND WITH NEGOTIATING COMMERCIAL ARRANGEMENTS FOR SUCH PRODUCTS
Our management while experienced in business operations, has only limited experience in negotiating sublicenses orlicenses and joint ventures for and
commercializingto commercialize the types of products covered by the License Agreement.we are developing. As a result of this inexperience, there is a higherhigh risk of our beingwe may be unable to complete our business plan toand negotiate profitable sublicenseslicenses or joint ventures for our lithium ion battery powered products. Because of the intense competition in for our licensedplanned products, under the License Agreement, there is substantial risk that we will not successfully commercialize these products.
WE ARE CURRENTLY IN LITIGATION WITH A FORMER EMPLOYER OF CHAZ HABA
We are currently in litigation, having been served with a complaint
filed on October 15, 2003, by Michael McDermott, as a stockholder of Planet
Electric, Inc. and purportedly on behalf of Planet Electric in the United States
District Court for the Central District of California. Charles Haba, a
consultant to the Company, was one of the founders of Planet Electric and is
defendant in this case along with Lithium House and other entities. See "ITEM
3--Pending Legal Proceedings" for a description of this case.
OUR PRODUCTS WILL BE HIGHLY REGULATED
Our products in development, particularly the NEV's, are highly regulated. There isare special safety standards in effect for vehicles with a possibilitytop speed of up to 25 miles per hour. Marketing vehicles that compete with passenger cars, requires compliance with the regulatory reviewfull federal safety standards. Regulatory reviews and compliance process could consumehas already consumed significant time and resources and will continue to do so as we work towards obtaining a dealership license. This may adversely affect the timing of our bringing products to market, as well as the profitability of such products once regulatory approvals are obtained.
OUR ELECTRIC POWERED VEHICLE BUSINESS IS SUBJECT TO SUBSTANTIAL RISKS
The electric battery powered product market is extremely competitive and risky. We are competing against numerous competitors with substantially greater financial resources than us, and due to the difficulties of entry into these markets, we may be unsuccessful and not be able to complete our business plan.
ITEM
WE INTEND TO RELY ON LITHIUM ION BATTERIES WHICH, IF NOT PROPERLY MANAGED, MAY POSE A FIRE HAZARD.
Another manufacturer of electric motor vehicles has received five reports of the batteries overheating, three of which caught fire, though no injuries have been reported. Our battery management systems will need to lessen or eliminate the risk of fire from the use of lithium ion batteries as a power source. If we are not able to develop such systems our business will not develop as planned. If our battery management systems fail, we could be liable to those who are harmed as a result of such failure.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. DESCRIPTION OF PROPERTY.Properties.
We rent office space of approximately 1,500 square feet in Las Vegas, for which we pay $1,500 monthly, pursuant to a one-year lease expiring March 2009. Our mailing address is 5001 East Bonanza Road, Suite 144-145,4894 Lone Mountain #168, Las Vegas, Nevada 89110,89130, for which we pay $10$25 per month. month, on a month to month basis.
We also have an officepurchased, in May 2006, a 40,000 square foot facility at 7126 Sophia Ave, Van Nuys CA, for which we pay monthly rent of $2,000 and an
office at 595 Hornby St. Suite 603, Vancouver, BC. Canada, for which we also pay
monthly rent of $2,000.
ITEM158 Rolling Hill in Mooresville, North Carolina.
Item 3. LEGAL PROCEEDINGS.
Legal Proceedings.
Other than as described below, we are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated. At this time we have no bankruptcy, receivership or similar
proceedings pending.
Planet Electric, Inc. Stockholder Litigation
On
October 17, 2003,June 3, 2008, we were
served withnotified of a
complaintcase filed on
October
15, 2003,June 2, 2008, by
Michael McDermott, as a stockholder of Planet Electric, Inc. and
purportedly on behalf of Planet ElectricPeter Strojnik, Attorney at Law, in the
United States DistrictFederal Court for the
Central District of
California. Charles (Chaz) Haba was one ofArizona (Peter Strojnik, P.C. v. The Energy Bull et al.). On June 24, 2008, the
founders
of Planet Electric, and was associated with that company from until early 2002.
Theplaintiff amended the complaint
lists Charles Haba, other individuals, Lithium House, Inc.,
Nupow'r LLC, Nu Age Electric, Inc., Dynamic Concepts aka NPDI, and Whistler
Investments, Inc.to include the Company as
defendants.a defendant. The complaint seeks
an injunction prohibiting
certaindamages against The Energy Bull and other defendants
from continuing their business relationship and transferbased on transmission of
alleged Planet Electric trade secrets or processes and also seeks damages for:
patent infringement against Charles Haba, companies that Mr. Haba has been
associated with since his involvement with Planet Electric, and Whistler; breach
of fiduciary duty against Mr. Haba; breach of confidential relationship against
Mr. Haba; conversion against Mr. Haba and certain other individual defendants;
various business torts against Mr. Haba, Lithium House, NuPow'r and Nu Age;
trade secret misappropriation against all defendants.
The defendants in this action have retained counsel, and will move to
dismissunsolicited facsimiles illegally promoting the
complaint on the grounds that there is no evidence to support
plaintiffs' claims.
After consultation with Charles (Chaz) Haba, Lithium House and our
counsel, we are confident that this litigation does not pose any obstacle to
continuation of our activities in consortium with Mr. Haba, RV Systems and
Lithium House under the October 21, 2003 Distribution and Licensing Agreement
and to our commencing to implement and license the technologies covered by that
License Agreement worldwide. The lithium battery technologies licensed to us by
RV Systems were developed by Lithium House subsequent to Mr. Haba's association
with Planet Electric.
Charles Haba v. Planet Electric, Inc.
In this action, Charles Haba, is suing for breach of his employment
agreement and breach of a note against his former employer, Planet Electric,
Inc. in the Los Angeles County Superior Court. Planet Electric, Inc. has
requested leave to file a cross-complaint against same defendants as the
above-mentioned shareholder derivative suit, including Whistler Investments,
Inc. The proposed cross-complaint adds claims for conversion and conspiracy to
convert assets of Planet Electric, Inc. assets against Whistler Investments,
Inc. As the claims brought by Planet Electric, Inc. in this State Court action
are nearly identical to thosestock of the
shareholder derivative suit, it is not
likelyCompany to the plaintiff and members of the class that the
courts will allow bothplaintiff purports to
proceed to trial. In any event, we do
not believe there is any merit to the claims against Whistler Investments, Inc.
and will seek a dismissal at the earliest opportunity.
Whistler Investments, Inc. v. McLane, et al.
On March 12, 2004, Whistler Investments, Inc. filed suit in the Los
Angeles County Superior Court against Rod McLane, Meridian Capital Fund, LLC,
Andreas Behrens, International Business Consultants GmbH, Herb Perman, Steve
Lipman, Coventry Windsor, Inc., Chicago Investment Group, LLC, and Bill Fritts.
The lawsuit arises out of defendants taking of 1,125,000 shares of Whistler
Investments, Inc. to hold as security for a loan. Defendants never funded the
loan and have refused to return the shares.represent. The lawsuit seeks
a return of said
shares or a cancellation of such shares or monetary damages
or $14,850,000.00estimated in the complaint to be between $333 million and $3 billion, as well as
punitive damages. In addition, the lawsuit seeks $120,000 in damagesinjunctive relief for the
breachalleged sending of
unsolicited faxes. The Company denies these allegations and has filed a motion to dismiss to exclude the
loan agreement.
ITEMCompany from the lawsuit. The Company disclaims, and has continually disclaimed on its web site and its communications with the investing public, all responsibility for authorizing in any manner unsolicited facsimiles issued by The Raging Bull or other parties that seek to promote the Company’s stock.Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submittedSubmission of Matters to our security holders for a vote during the fourth
quarterVote of our fiscal year ending January 31, 2004.
Security Holders.
Not applicable.
PART II
ITEM
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
Our shares of common stock trade and have traded on the NASD OTC Bulletin Board since March 4, 2002. The OTC Bulletin Board is a network of security dealers who buy and sell stock. A computer network that provides information on current "bids" and "asks", as well as volume information, connects the dealers. The following table sets forth for our last two fiscal years by quarter the high and low closing prices of our common shares traded on the OTC Bulletin Board:
Period High Low
- ------ ---- ---
March 4, 2002 to April
| Period | | High | | Low | |
| | | | | | |
| August 1, 2006 to October 31, 2006 | | $ | 7.41 | | $ | 3.30 | |
| November 1, 2006 to January 31, 2007 (1) | | $ | 5.42 | | $ | 3.52 | |
| February 1, 2007 to April 30, 2007 (2)(3) | | $ | 4.77 | | $ | 4.11 | |
| May 1, 2007 to July 31, 2007 (4) | | $ | 4.35 | | $ | 2.50 | |
| August 1, 2007 to October 31, 2007 | | $ | 2.78 | | $ | 1.85 | |
| November 1, 2007 to January 31, 2008 (5) | | $ | 17.43 | | $ | 4.55 | |
| February 1, 2008 to April 30, 2008 | | $ | 5.15 | | $ | 2.05 | |
| May 1, 2008 to July 31, 2008 | | $ | 6.30 | | $ | 3.35 | |
| August 1, 2008 to October 14, 2008 | | $ | 3.35 | | $ | 1.12 | |
(1)A one-for-ten stock dividend was effective November 30, 2002 no trades
May 1, 2002 to July 31, 2002 $1.07 $0.20
August 1, 2002 to October 31, 2002 $1.01 $0.08
November 1, 2002 to2006.
(2)Following the one-for-twenty stock dividend effective January 31, 2003 $0.14 $0.08
February 1, 2003 to April2007.
(3)A one-for-twenty stock dividend was effective March 30, 2003 $0.30 $0.082007.
(4)A one-for-ten stock dividend was effective May 1, 2003 to July 10, 2003 $0.29 $0.08
July 11, 2003 to July 31, 2003* $4.00 $1.29
August 1, 2003 to October 31, 2003 $7.00 $3.65
November 1, 2003 to January 31, 2004 $8.50 $3.65
February 1, 2004 to March 9, 2004 $12.35 $7.90
March 10, 2004 to April 23, 2004** $7.39 $3.45
- -------------
* Following ten-for-one2007.
(5)A one-for-seven reverse split was effective July 11, 2003
** Following three-for-one forward split effective March 10, 2004
January 17, 2008.
The above quotations are taken from information provided by Canada StockwatchYahoo and reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders of Common Stock
As of April 12, 2004,October 15, 2008, we had 31104 holders of record of our common stock.
Dividends
Our current policy is to retain
any earnings in order to finance
the expansion
of our operations. Our board of directors will determine future declaration and payment of dividends, if any, in light of the then-current conditions they deem relevant and in accordance with the Nevada Revised Statutes.
Recent Sales of Unregistered Securities
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
Date Title and Amount Purchasers Principal Total Offering
- ---- ---------------- ---------- ---------- --------------
Underwriter Price/Underwriting Discounts
----------- ----------------------------
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
April 15, 2002 40,000,000 shares of Common Salim S. Rana NA NA
Stock issued to the vendor of Investments Corp.
the Azra Shopping Center.*
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
8/12/03 11,250,000 shares of Common International NA NA
Stock issued in escrow to in Business
connection with proposed Consultants GMBH
financing transaction*
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
12/09/03 1,250 shares of Common Stock* Consultant NA $1.12 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
12/09/03 1,250 shares of Common Stock* Consultant NA $1.12 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
1/14/03 2,5000 shares of Common Stock* Consultant NA $2.17 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
*These shares were issued pursuant to Section 4(2) of the Securities Act and are
restricted shares as defined in the Securities Act.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth as of July 31, 2008 information with respect to our common stock issued and available to be issued under outstanding options, warrants and rights.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
(a) (b) (c)
Plan category Number of securities to be Weighted-average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance under
warrants and rights rights equity compensation plans
(excluding securities
reflected in column (a))
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders 1,214,000 $.75 -0-
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 1,214,000 $.75 -0-
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
ITEM
| | | | | | | (c) | |
| | | | | | | Number of securities | |
| | | | | | | remaining available for | |
| | | | | | | future issuance under | |
| | | (a) | | (b) | | equity compensation | |
| | | Number of securities to be | | Weighted-average exercise | | plans (excluding | |
| | | issued upon exercise of | | price of outstanding | | securities | |
| | | outstanding options, | | options, warrants and | | reflected in | |
| Plan category | | warrants and rights | | rights | | column (a)) | |
| Equity compensation Plans approved by security holders | | | | | | | | | | |
| Equity compensation plans not approved by security holders | | | 1,019,000 | | $ | 2.90 | | | 2,575,000 | |
| Total | | | 1,019,000 | | $ | 2.90 | | | 2,575,000 | |
2003, 2005 and 2006 Restricted Stock Plans
On July 17, 2003, the Board of Directors of the Company adopted the 2003 Restricted Stock Plan (the "Plan"), pursuant to which 1,800,000 shares of common stock (split- adjusted) were reserved for issuance to eligible participants under the Plan. All shares have been issued under this plan, the provisions of which were similar to those of the 2005 Restricted Stock Plan described below.
On April 21, 2005, the Board of Directors of the Company adopted the 2005 Restricted Stock Plan (the "Plan"), pursuant to which 2,000,000 shares of common stock were reserved for issuance to eligible participants under the Plan. Such eligible participants include any person who is an employee of or consultant or advisor to Hybrid Technologies and who provides bona fide services for Hybrid Technologies, where the services are not in connection with the offer or sale of securities in a capital raising transaction and where the services do not directly or indirectly promote or maintain a market for Hybrid Technologies’ common stock. In no case may an award be made under the Plan where the common stock granted in the award is not eligible for registration pursuant to Form S-8 (or any successor form promulgated for the same general purposes by the Securities and Exchange Commission) under the Securities Act of 1933, as amended. All shares have been issued under this plan, with the exception of 14,500 shares subject to outstanding options.
The 2006 Restricted Stock Plan has been adopted by the board with 5,000,000 shares reserved. Options covering 2,000,000 shares were granted to Salim Rana, a shareholder of the Company, of which options covering 1,206,000 shares have been exercised. The Plan is administered by the Board of Directors of the Company. Subject to the express limitations of the Plan, the Board has authority in its discretion to determine the eligible persons to whom, and the time or times at which, restricted stock awards may be granted, the number of shares subject to each award, the time or times at which an award will become vested, the performance criteria, business or performance goals or other conditions of an award, and all other terms of the award. The Board also has discretionary authority to interpret the Plan, to make all factual determinations under the Plan, and to make all other determinations necessary or advisable for Plan administration. The Board may prescribe, amend, and rescind rules and regulations relating to the Plan. All interpretations, determinations, and actions by the Board are final, conclusive, and binding upon all parties.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis or Plan of Operations.
FORWARD LOOKING STATEMENTS
This annual report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this section.
Results Of Operations for the Year Ended JanuaryJuly 31, 2004
2008
We incurred a net loss from continuing operations of $4,829,599$6,064,840 for the year ended JanuaryJuly 31, 2004
including $4,394,0002008, and of approximately $9,866,877 for the year ended July 31, 2007, and in stock based compensation relating to our grant of stock
options to employees during the quarter, management fees of $178,996,year ended July 31, 2008, general and administrative costs of $97,515, professional fees of $87,635, $16,304 in
rent$3,477,077 and office costs, and $14,195 in depreciation expense relating to computer
equipment, furniture interest expense of $24,070, and fixtures.$231,114.
We had sales from continuing operations of $199,801 in the year ended July 31, 2008. Our net loss from continuing operations for the twelve-month period ended January 31, 2004 increased
substantially2008 decreased from the comparative periodfiscal 2007 (from $9,866,877 in fiscal 2003 (from $825,4932007 to approximately $6,064,840 in 2003
to $4,829,599 in 2004)2008). This was primarily due to general and administrative costs of $8,383,310 in fiscal 2007, as compared with approximately $3,477,077 in 2008. We also had increased interest expense in the previously mentionedtwelve months ended July 31, 2008 of $231,114, as compared with approximately $86,292 in the comparable period in 2007, and stock based compensation of $804,652 in 2004 recorded at $4,394,000,2008 as compared with none-0- in 2003,
and increases in administrative costs from $23,082 in 2003 to $97,515 in 2004,
and management and consulting fees from $11,500 in 2003 to $178,996 in 2004,
resulting from a general increase in our business activities. We also incurred
interest expense of $24,070 related to amounts owing on overdue notes payable to
related parties.
2007.
PLAN OF OPERATION
During the period since inception on April 12, 2000 to JanuaryJuly 31, 2004,2008, we havehad incurred net operating losses aggregating $5,728,483. At Januaryfrom continuing operations totaling $50,736,407. On July 31, 2004,2008, we had a working capital deficiencydeficit of $525,777$78,640 and a stockholders' deficit of $90,933.
$4,127,965.
The continuation of the Company as a going concern is dependent upon the continued financial support from our shareholders, and other related parties, our ability to obtain necessary equity financing to continue operations, and the attainment of profitable operations. Our auditors have expressed substantial doubt concerning our ability to continue as a going concern.
As of
JanuaryJuly 31,
2004,2008, we had cash on hand of
$169,428. Our liabilities at the$101,095. At that same date
our liabilities totaled
$695,205 and consisted primarily of accounts payable and
accrued liabilities of $133,017 and a related party payable of $553,983. The
related party payable consisted primarily of a payable due to SSRI, in
connection with our previous acquisition of the Azra shopping center and
advances to the Company by the related party. We anticipate that our
administrative costs and expenses to acquire the licenses from RV Systems, Inc.
over the next 12-month period will be in excess of $2,000,000, if we secure
rights to all licensed products.$6,685,173. We do not have sufficient cash on hand to
meet
these anticipated obligations.
Distributioncomplete commercialization of our current and Licensing Agreement planned products.
Electric Vehicle Operations
We convert vehicles in our developmental facility in Mooresville, North Carolina. Our team of highly qualified engineers oversee groups of electrical and mechanical staff. This 40,000 square foot facility has room for both conversions and storage with the potential for future growth, enabling us to work on many projects and vehicles concurrently.
With RV Systems, Inc.
On October 21, 2003,the license of our lithium battery technology described below, we are concentrating on sales of our vehicles. We have initiated several nationwide newspaper advertising campaigns which have generated orders for our vehicles, and we are also seeing as a result a significant increase in inquiries about our electric vehicle products.
Effective April 15, 2008, we entered into the newa License Agreement (the “License Agreement”) with RV
SystemsSuperlattice Power, Inc. (formerly our subsidiary, Zingo, Inc., “SPI”) providing for the worldwide arena (with the exceptionour license to SPI of Indiaour patent applications and technologies for the two-rechargeable lithium ion batteries for hybrid vehicles and three-wheeled vehicle technology) to sell, distribute and/or manufacture (or
arrange for the sale, distribution or manufacture of) specified products
utilizing the portable power systems (the "Licensed Technologies"), developed by
Lithium House. Lithium House is an affiliate of RV Systems, and has licensed all
product development to RV Systems for products andother applications of portable
power systems utilizing Lithium House's proprietary lithium battery technology.
The License Agreement with RV Systems covers (“Licensed Technologies in three
separate product groups: two- and three-wheeled vehicles to be manufactured and
sold in all countries of the world except India; lawn and garden equipment to be
manufactured and sold in all countries of the world; and NEV's to be
manufactured and sold in all countries of the world.
Subject to the terms ofProducts”). Under the License Agreement, RV Systems, as Licensor,
has granted to us, during the term of the License Agreement, and upon the terms
and conditions set forth in the License Agreement, a non-assignable right and
license to market, sell, manufacture, and distribute the Licensed Technologies
in all countries of the world, with the exception of India for two- and
three-wheeled vehicles. Wewe have the right upon receiptto purchase our requirements of written approvallithium ion batteries from SPI, and due diligenceour requirements of lithium ion batteries shall be supplied by SPI in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of SPI. Our cost for lithium ion batteries purchased from SPI shall be SPI’s actual manufacturing costs for such batteries for the Licensor,fiscal quarter of SPI in which our purchase takes place.
SPI has agreed to sublicense anyinvest a minimum of $1,500,000 in each of the rightsnext two years in development of the technology for the Licensed Products.
Effective April 16, 2008, SPI agreed to lease approximately 5,000 square feet of space (“Leased Space”) in our North Carolina facility, such Leased Space to be suitable for, and
licenses
granted inutilized by SPI for, SPI’s developmental and manufacturing operations for Licensed Products pursuant to the License
AgreementAgreement. The Leased Space is leased on a month-to-month basis at a monthly rental of $2,500, the monthly rental to
or enter into distribution agreements with
third parties ("Sublicensees"be escalated five (5%)
withpercent annually. Effective April 16, 2008, we also sold to SPI for the
written consentpurchase price of
Licensor to the
sublicense or distribution agreement$29,005, specified equipment and
the approval of Licensor of thesupplies related
agreement or agreements with the particular Sublicensee, which consent or
approval shall not unreasonably be withheld.
The term of the License Agreement commenced on October 21, 2003, and
continues for a period of five License Years. NEV's were added to the Licensed
Technologies on November 14, 2003. The term is automatically renewed for three
succeeding License Years unless earlier terminated by either party upon not less
than 90 days prior written notice to the other of intent to terminate.
The Company is required to pay the Licensor the technology payments
(the "Technology Payments") (to be paid to Lithium House) as specified in the
License Agreement ($100,000 for two- and three-wheeled vehicles, and $50,000 for
lawn and garden equipment) to be paid on or before October 31, 2003, which
payments have been made. For NEV's we are required to pay $250,000 no later than
December 31, 2003, with a weekly minimum of $15,000. We are also required to pay
Licensor product development payments of $400,000, on or before December 31,
2003, with a weekly minimum of $15,000, for two- and three-wheeled vehicles;
$200,000 for lawn and garden equipment, on or before December 31, 2003, with a
weekly minimum of $15,000; and $1,000,000, payable no later than March 31, 2004,
with a weekly minimum of $35,000 for NEV's ("Product Development Payments"). We
have signed additional amendments to the License Agreement as of January 5 and
February 2, 2004, covering power systems for watercraft and solar houses,
respectively. These additional agreements require payments of approximately
$2,000,000. As of April 30, 2004, we have paid an aggregate of $1,535,544 in
license payments to RV Systems, and are continuing weekly license fee payments
of approximately $35,000, as per a supplemental letter agreement with RV
Systems. As reimbursement to the Company, Licensor is required to pay to us the
proceeds from any sales by Licensor of product inventory manufactured with the
financing provided by the Product Development Payments as and when that product
inventory is sold by Licensor.
Field.
Commercial Initiatives
China
Upon invitation from Geely Corporation, we and Mr. Chaz Haba of Lithium
House have traveled to China and met with the Motorcycle Division and the
International Trade Division of Geely Corporation. We are currently in the
process of incorporating in China to position ourselves for pursuit of joint
ventures. We have signed an agreement with Geely for a proposed joint venture
and are now in the initial stages of drafting the formal joint venture
agreement.
India
We are currently in discussions with Loveson of Bombay India for the
manufacture of bicycles to be converted into electric bikes.
Powerski
On December 30, 2003 we announced that we started a joint venture with
Powerski International, to create another model of Powerski's flagship product,
the Powerski Jetboard(TM), powered with a Lithium-ion electric motor. We
anticipate testing this board during the second quarter of 2004. Upon
completion, our objective is for the board to travel at 30 to 40 MPH, for over 1
hour.
U.S. Navy
On February 5, 2004 we announced the initiation of a lithium-ion conversion project with the United States Navy.
The project will serve as a
trial, and the development and implementation of this project will take place
within our facilities in Van Nuys, California. We have funded the initial 3kw prototype for this project, and
we anticipate the prototype
will be readyhas been completed and delivered to the Navy. The NYC Taxi Commission agreed to test a PT Cruiser which was delivered January 2007. The converted PT Cruiser Taxi was driven for
testing by the Navytwo months in
the second quarter of 2004.
Electric Cars
We are working with California-based Cinema Vehicles to develop and
build what we have designated as the "R-Car". Cinema Vehicles is the oldest and
one of the largest motion picture vehicle service companies in the world. They
have worked on major Hollywood productions such as T3 and Austin Powers. The
anticipated use for the R-Car is for medium to long-range trips, as well as
neighborhood use.
The motor was balanced, matched to a 6-speed transmission, and tested
in April 2004. Mr. Haba and his engineers have been working closely with Cinema
Vehicles regarding the mechanical aspects of this development -- we are
anticipating that this vehicle will be able to travel at speeds up to 90 mph
with a range of up to 200 miles.New York City. The vehicle
is currently under testing.
Austin Energy
On March 1, 2004, we announced that a letter of understanding between
Whistler Investments, Inc.has been returned and the City of Austin had been executed in respect
to the conversion of vehicles for the City of Austin, TX, subsequent toproject is completed. Paratransit, Sacramento, California, a senior
level meeting between Mark Kapner, Senior Strategic Planner for the City of
Austin, Mr. Chaz Haba and representatives of Whistler, at their development
facility at Lithium house in Van Nuys, California.company providing community transportation services, purchased two converted PT Cruisers. We have purchasedsigned a 2004 Chrysler PT Cruiser -- we are commencing work
on the prototype for Austin Energy,Space Act agreement with NASA and hope to have it ready for testing in the
second quarter of this year.
Solium Power Corp.
Our Lithium Solar House ("LSH") project will be under the direction of
Chaz Haba and is to provide a test bed for an alternative source of power to the
home -- not connected to the power grid. The power source will be Solar Panels
for charging of the Lithium Ion Batteries, which are used for storage of the
power. The system will supply DC power for the home and all appliances (using
from 12 volts to 48 volts), lighting, heat, air, etc., and will involve a site
in Van Nuys, California. We have now received the approved plan and are
currently renovating this Solar House. Construction completion and testing is
anticipated by Summer 2004.
We believe that the keys to our success in the future will be to
aggressively pursue the most opportunistic market(s) and to concentrate our
resources on the market(s) that have the most return for the time and effort
expended. We are in negotiations with a municipal government agency in Canada.
We have also initiated a project aimed at converting pre-existing vehicles in
Latin America to electric propulsion units. Negotiations for the conversion of several vehicles are now underway. It is anticipated thatbeing tested by NASA at the first conversions
will be taxi cabs locatedKennedy Space Center in Mexico City. Mexico City has the world's worst air
pollution, according to the United Nations, due primarily to vehicle emissions.
The zero-emission vehicle projects are aimed at reducing harmful contaminants in
the city's air, while providing usable cost-efficient alternate energy sources
in public transit vehicles.
We are in discussions with several large chain stores, one in Europe
and several in the United States about carrying our products in their stores.Florida. We are also evaluating using infomercialsparticipating to showcase our technology in 2004a “green” home in Calgary, Alberta. We signed an agreement in June 2007, pursuant to promote saleswhich the Canadian Ministry of our products.
Transportation purchased a Smart Car and PT Cruiser, both of which have been delivered. The Smart Car was not suited to their needs, has been returned and we will be refunding the purchase price. In September 2007, we signed a contract to provide and delivered a PT Cruiser to Arcadis, a contractor to the U.S. Environmental Protection Administration.
5.2 Liquidity and Capital Resources
Since our incorporation, we have financed our operations almost exclusively
through the sale of our common shares to
investors.investors and borrowings. We expect to finance operations through the sale of equity in the foreseeable future as we
do not
receive
minimal revenue from our current business operations. There is no guarantee that we will be successful in arranging financing on acceptable terms.
On January 20, 2004, we announced agreement for a $10 million equity
line with Boston-based Dutchess Private Equities Fund, LP. We currently intend
to file the necessary registration documents with the SEC.
On February 24, 2004, we announced receipt of $1 million dollars of a
$3 million dollar non-recourse loan to be collateralized by stock. On April 14,
2004, we drew down an additional $1,000,000 on this loan, and on April 22, 2004,
we drew down the final $1,000,000 of the loan.
The Company intends to hold a special meeting of shareholders' upon
approval of the information circular we have filed with the Securities and
Exchange Commission, to increase our authorized common stock, so as to have
additional stock available for equity financing, if required.
We have raised equity capital through issuances of common stock and
debt.
During the year ended JanuaryJuly 31, 2004,2008, we received net proceeds of $589,500
from the exercise of stock options and $150,000$5,123,112 from the issuance of promissory notes for debt.
Wyndom Capital Loan Agreement
On October 29, 2007, we entered into a Loan Agreement with Wyndom Capital Investments, Inc. (referred to in this paragraph as the “Lender”). The Loan Agreement provides for loans to the Company of up to $4,000,000, with a minimum initial loan of $500,000 the disbursement of which to us took place in late October, 2007. The notes evidencing the installments of the loans bear interest payable monthly in arrears at the rate of 10% per annum, and mature and are due and payable three years from the date of issuance. The loans under the Loan Agreement are secured by shares of our common stock.
Atstock held by the Lender. We are required to issue shares as collateral at the rate of two and one half shares of our common stock for each dollar principal amount of the loan advanced to us. If there is a trading halt in our common stock or we file for bankruptcy or reorganization, the Lender has full recourse against the Company to collect the unpaid amounts owing under the Loan Agreement and notes issued pursuant thereto, including a first priority lien on all of our assets. In the event of the occurrence of another type of default, which we do not cure in a timely fashion, the Lender, as its sole recourse, is entitled to take possession for its sole benefit of the shares of common stock designated as collateral for the principal amount of the Loan that is in default. After the Lender has disbursed the first $1,000,000 principal amount of the Loan to us, the Lender is entitled to receive a certificate for the balance of the 7,500,000 shares of common stock representing the collateral for the $3,000,000 balance of the funds that may be disbursed under the Loan Agreement. To the extent the $3,000,000 balance of funds are not delivered, we are entitled to cancel such certificate, with the Lender retaining the appropriate number of shares as collateral for advances in excess of $1,000,000. Following disbursement of the first $1,000,000 of funds pursuant to the Loan Agreement, on November 19, 2007, we issued 10,000,000 shares of common stock as collateral to the Lender. Following the one-for-seven reverse split effective in January 2008, we issued 8,571,427 shares of common stock to Wyndom to bring the number of their collateral shares back up to 10,000,000, as required by the Wyndom Loan Agreement.
We have been disbursed loans in the aggregate amount of $3,971,150 under the Wyndom Capital Loan Agreement as of July 31, 2004,2008.
Crystal Capital Ventures Loan Agreement
On May 5, 2008, we had $169,428 cashentered into a Loan Agreement with Crystal Capital Ventures Inc. (referred to in this paragraph as the “Lender”). The Loan Agreement provides for loans to the Company of up to $3,000,000, with a minimum initial loan of $500,000 the disbursement of which to us took place on hand. Our abilityMay 19, 2008. The notes evidencing the installments of the loans bear interest payable monthly in arrears at the rate of 10% per annum, and mature and are due and payable three years from the date of issuance. The loans under the Loan Agreement are secured by shares of our common stock held by the Lender. We are required to raise
additional capitalissue shares as collateral at the rate of two and one half shares of our common stock for each dollar principal amount of the loan advanced to us. If there is affected by trendsa trading halt in our common stock or we file for bankruptcy or reorganization, the Lender has full recourse against the Company to collect the unpaid amounts owing under the Loan Agreement and uncertainties beyondnotes issued pursuant thereto, including a priority lien on all of our control.
assets. In the event of the occurrence of another type of default, which we do not cure in a timely fashion, the Lender, as its sole recourse, is entitled to take possession for its sole benefit of the shares of common stock designated as collateral for the principal amount of the Loan that is in default. After the Lender has disbursed the first $1,000,000 principal amount of the Loan to us, the Lender is entitled to receive a certificate for the balance of the 5,000,000 shares of common stock representing the collateral for the $2,000,000 balance of the funds that may be disbursed under the Loan Agreement. To the extent the $2,000,000 balance of funds are not delivered, we are entitled to cancel such certificate, with the Lender retaining the appropriate number of shares as collateral for advances in excess of $1,000,000. Following disbursement of the first $1,000,000 of funds pursuant to the Loan Agreement, on May 27, 2008, we issued 7,500,000 shares of common stock as collateral to the Lender.
We have been disbursed loans in the aggregate amount of $1,211,000 under the Crystal Capital Loan Agreement as of July 31, 2008, and received net advances of $62,505 from related parties in the year ended July 31, 2008.
Our current operating funds are less than necessary to complete the
license payments to RV Systems for commercialization of our planned products, utilizing
Lithium House portable power systems under the License Agreement, and therefore we will need to obtain additional financing in order to complete our business plan. Our business plan will require substantial additional financing in
connection with the initial commercialization of the products under the License
Agreement. We anticipate that our administrative costs and expensesup to acquire the licenses from RV Systems, Inc.$2,000,000 of additional working capital will be required over the next 12-month period12 months for market introduction of these products through joint venture partners or otherwise. We do not have sufficient cash on hand to meet these anticipated obligations.
Apart from the Wyndom Capital and Crystal Capital Loan Agreements, which may not furnish us with all of the capital that we will be in excess of $2,000,000, ifrequire, we secure rights to all licensed products.
We do not currently have any other arrangements for financing, and we may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
Our auditors are of the opinion that our continuation as a going concern is in doubt. Our continuation as a going concern is dependent upon continued financial support from our shareholders and other related parties.
ITEM 7. FINANCIAL STATEMENTS.
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
January 31,
CRITICAL ACCOUNTING ISSUES
The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Other Matters
Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which enhances existing guidance for measuring assets and liabilities using fair value. The new Statement provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. While SFAS No. 157 does not add any new fair value measurements, it does change current practice. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not believe that SFAS No. 157 will have a material impact on its financial statements.
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). The interpretation requires a two step approach for recognizing and measuring tax benefits based on a recognition threshold of "more likely than not." FIN 48 also requires explicit disclosures about uncertainties in tax positions including a detailed rollforward of tax benefits that do not qualify for financial statement recognition. The adoption of FIN 48 is effective for fiscal years beginning after December 15, 2006, The implementation of FIN 48 could have a material effect on the consolidated balance sheets and results of operations but the effect of such implementation is not determinable at this time.
In December 2004
Whistler Investments, Inc.
(A Development Stage Company)the FASB issued SFAS No. 153, an amendment of APB Opinion No. 29, "Exchange of Nonmonetary Assets." SFAS No. 153 amends APB Opinion No.29 by eliminating the exception under APB No. 29 for nonmonetary assets of similar productive assets and replaces it with a general exception for exchanges on nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS no. 153 is effective for fiscal years beginning after June 15, 2005. The adoption of SFAS No. 153 did not have a material effect on the Company's consolidated financial position or results of operations. New Financial Accounting Standards
In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157 “Fair Value Measurements,” (“SFAS 157”) which enhances existing guidance for measuring assets and liabilities using fair value. This standard provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not believe that SFAS 157 will have a material impact on its financial statements.
In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities,” (“SFAS 159”) providing companies with an option to report selected financial assets and liabilities at fair value. The standard’s objective is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. It also requires entities to display the fair value of those assets and liabilities for which the Company has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of this Statement on its financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141 (R)”) “Business Combinations”, which replaces SFAS 141 “Business Combinations”. This Statement improves the relevance, completeness and representational faithfulness of the information provided in financial reports about the assets acquired and the liabilities assumed in a business combination. This Statement requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the Statement. Under SFAS 141(R), acquisition-related costs, including restructuring costs, must be recognized separately from the acquisition and will generally be expensed as incurred. That replaces SFAS 141’s cost-allocation process, which required the cost of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair values. SFAS 141(R) shall be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual report period beginning on or after December 15, 2008. The Company will implement this Statement in 2009.
In December 2007, the FASB issued SFAS No. 160 “Non-Controlling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of non-controlling interests (minority interest) as equity in the consolidated financial statements and separate from parent’s equity. The amount of net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement. SFAS 160 clarifies that changes in a parent’s ownership in a subsidiary that does not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the non-controlling equity investment of the deconsolidation date. SFAS 160 also includes expanded disclosure requirements regarding the interest of the parent and its non-controlling interest. SFAS 160 is effective for fiscal years, and interim periods other than fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact of the adoption of this Statement on its financial statements.
In January 2008, Staff Accounting Bulletin (“SAB”) 110 “Share-Based Payment” (“SAB 110”), was issued. Registrants may continue, under certain circumstances, to use the simplified method in developing estimates of the expected term of share options as initially allowed by SAB 107, “Share-Based Payments”. The adoption of SAB 110 should have no effect on the financial position and results of operations of the Company.
INTANGIBLES
In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 specifies the financial accounting and reporting for acquired goodwill and other intangible assets. Goodwill and intangible assets that have indefinite useful lives are not amortized but rather they are tested at least annually for impairment unless certain impairment indications are identified.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk - Interest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are classified as cash and cash equivalents have original maturities of three months or less. Our interest income is sensitive to changes in the general level of U.S. interest rates. We do not have significant short-term investments, and due to the short-term nature of our investments, we believe that there is not a material risk exposure. Our debt is at fixed interest rates.
Credit Risk - Our accounts receivables are subject, in the normal course of business, to collection risks. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of collection risks. As a result we do not anticipate any material losses in this area.
Item 8. Financial Statements and Supplementary Data.
HYBRID TECHNOLOGIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2007 and 2008
TABLE OF CONTENTS
Page:
| Page |
| |
Report of Independent Auditors F-1
Balance Sheets
asRegistered Public Accounting Firm | 20 |
| |
| Consolidated balance sheet | 22 |
| |
Consolidated statements of January 31, 2004 and January 31, 2003 F-2
Statementsoperations | 23 |
| |
Consolidated statements of operations
for the years ended January 31, 2004 and January 31, 2003 F-3
Statementsstockholders’ equity | 24 |
| |
Consolidated statements of cash flows
for the years ended January 31, 2004 and January 31, 2003 F-4
Statement of changes in stockholders' deficit
for the period from Inception to January 31, 2004 F-5
| 25 |
| |
Notes to theconsolidated financial statements F-6
| 26 |
Independent Auditor's Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of Whistler Investments,Hybrid Technologies, Inc.
4894 Lone Mountain Rd., #168
Las Vegas, Nevada
NV 89110
We have audited the accompanyingconsolidated balance sheet of Whistler Investments,Hybrid Technologies, Inc. (aand Subsidiaries, a development stage company)company (collectively, the “Company”), as of JanuaryJuly 31, 2004,2008, and the related consolidated statements of operations, accumulated deficit,stockholders’ deficiency, and cash flows and stockholders' equity for the year then ended. These financial statements are the responsibility of the company'sCompany’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Whistler
Investments,Hybrid Technologies, Inc. as of JanuaryJuly 31, 2003,2007, were audited by other auditors whose report, dated April 29, 2003 was modified because of a going concern uncertainty.
November 7, 2007, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditingthe standards generally accepted
inof the United States of America.Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements of Hybrid Technologies, Inc. and Subsidiaries referred to above present fairly, in all material respects, the financial position of Whistler Investments,Hybrid Technologies, Inc. and Subsidiaries as of JanuaryJuly 31, 2004,2008, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the company will continue as a going concern. As shown in the consolidated financial statements, the Company incurred a net loss of $6,535,683 for the year ending July 31, 2008. As of July 31, 2008, current liabilities exceeded current assets by $128,640. The Company is a defendant in a lawsuit in which the plaintiff is seeking damages up to $3 billion. The Company will vigorously defend itself but should the plaintiff succeed in obtaining a judgment, the Company does not have sufficient funds to pay the judgment. These factors and uncertainties, and others discussed in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern.
These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
/s/ Wiener, Goodman & Company, P.C.
Eatontown, NJ
October 28, 2008
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Hybrid Technologies, Inc.
We have audited the accompanying consolidated balance sheets of Hybrid Technologies, Inc. (a development stage company) as of July 31, 2007 and 2006, and the related consolidated statements of operations, stockholders' equity and cash flows for the years ended July 31, 2007 and 2006, and from April 12, 2000 (Inception) through July 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the financial position of Hybrid Technologies, Inc. as of July 31, 2007 and 2006, and the results of consolidated operations and cash flows for the years ended July 31, 2007 and 2006, and from April 12, 2000 (Inception) through July 31, 2007, in conformity with U.S. generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussedshown in Note 1 to the consolidated financial statements, the Company has continued development stage losses,
negative working capital,incurred a net loss of $45,411,768 from April 12, 2000 (Inception) through July 31, 2007. This and stockholders' deficit. These conditionsother factors discussed in Note 2 raise substantial doubt about itsthe Company's ability to continue as a going concern. Management
plans regarding those matters also are describedThe consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
/s/ Haynie & Company
Littleton, CO
November 13, 2007
A Development Stage Company
Consolidated Balance Sheets
| | | July 31, | |
| | | 2008 | | 2007 | |
| ASSETS | | | | | |
| | | | | | |
| Current assets: | | | | | | | |
| Cash | | $ | 101,095 | | $ | 3,775 | |
| Marketable securities - restricted | | | - | | | 41,224 | |
| Accounts receivable, net of allowance for | | | | | | | |
| doubtful accounts of $0 and $139,003 | | | 13,601 | | | 1,994 | |
| Inventories | | | 287,310 | | | 425,775 | |
| Other current assets | | | 69,119 | | | 60,233 | |
| Due from related parties | | | - | | | 24,505 | |
Total current assets | | | 471,125 | | | 557,506 | |
| | | | | | | | |
| Property and equipment, net | | | 2,014,580 | | | 2,120,343 | |
| | | | | | | | |
| Other long term assets: | | | | | | | |
| Other assets | | | 51,600 | | | 51,600 | |
| Deferred patent costs | | | 19,903 | | | - | |
Total other long term assets | | | 71,503 | | | 51,600 | |
| | | | | | | | |
| | | $ | 2,557,208 | | $ | 2,729,449 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) | | | |
| | | | | | | | |
| Current liabilities: | | | | | | | |
| Current portion of long-term debt | | $ | 32,422 | | $ | 241,460 | |
| Accounts payable and accrued expenses | | | 330,183 | | | 489,788 | |
| | | | | | | | |
| Customer deposits | | | 149,160 | | | - | |
| Deferred revenue | | | - | | | 2,990 | |
| | | | | | | | |
| Advances from related parties | | | 38,000 | | | - | |
Total current liabilities | | | 549,765 | | | 734,238 | |
| | | | | | | | |
| Long-term debt - less current portion above | | | 6,135,408 | | | 803,258 | |
| | | | | | | | |
| Commitments and contingencies | | | - | | | - | |
| Minority interest | | | - | | | 2,377 | |
| Stockholders' equity (deficiency): | | | | | | | |
| Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued | | | - | | | - | |
| Common stock, $.001 par value, 35,714,285 authorized; outstanding 23,347,257 at July 31, 2008 and 39,500,511 at July 31, 2007, respectively | | | 23,347 | | | 39,501 | |
| Additional paid-in-capital | | | 47,790,509 | | | 46,569,703 | |
| | | | | | | | |
| Deficit accumulated during the development stage | | | (51,947,451 | ) | | (45,411,768 | ) |
| | | | | | | | |
| Cumulative other comprehensive income (loss) | | | 5,630 | | | (7,860 | ) |
Total stockholders' equity (deficiency) | | | (4,127,965 | ) | | 1,189,576 | |
| | | | | | | | |
| | | $ | 2,557,208 | | $ | 2,729,449 | |
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A Development Stage Company
Consolidated Statements of Operations
| | | | | | | INCEPTION | |
| | | YEAR ENDED | | (April 12,, 2000) | |
| | | JULY 31, | | THROUGH | |
| | | 2008 | | 2007 | | July 31, 2008 | |
| | | | | | | | |
| Sales | | $ | 199,801 | | $ | 48,750 | | $ | 1,969,054 | |
| | | | | | | | | | | |
| Costs and expenses: | | | | | | | | | | |
| Cost of sales | | | 384,267 | | | 124,301 | | | 2,533,563 | |
| General and administrative | | | 3,477,077 | | | 8,383,310 | | | 41,655,009 | |
| Research and development | | | 1,402,077 | | | 1,009,483 | | | 7,371,693 | |
| Compensatory element of stock issuances | | | 804,652 | | | - | | | 804,652 | |
| | | | 6,068,073 | | | 9,517,094 | | | 52,364,917 | |
| | | | | | | | | | | |
| Loss from continuing operations | | | (5,868,272 | ) | | (9,468,344 | ) | | (50,395,863 | ) |
| | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | |
| Interest expense | | | (231,114 | ) | | (86,292 | ) | | (972,551 | ) |
| Interest income | | | - | | | - | | | - | |
| Loss from sale of other assets | | | - | | | (314,381 | ) | | (314,381 | ) |
| Other income | | | 34,546 | | | 2,140 | | | 946,388 | |
| | | | | | | | | | | |
| Net loss from continuing operations | | | (6,064,840 | ) | | (9,866,877 | ) | | (50,736,407 | ) |
| | | | | | | | | | | |
| Provision for income tax | | | - | | | - | | | | |
| | | | | | | | | | | |
| Net loss from continuing operations | | | (6,064,840 | ) | | (9,866,877 | ) | | (50,736,407 | ) |
| | | | | | | | | | | |
| Discontinued operations: | | | | | | | | | | |
| Loss from discontinued operations | | | (563,289 | ) | | (752,880 | ) | | (1,320,313 | ) |
| Gain on disposal of discontinued operations | | | 90,069 | | | - | | | 90,069 | |
| Net loss on discontinued operations | | | (473,220 | ) | | (752,880 | ) | | (1,230,244 | ) |
| | | | | | | | | | | |
| Loss from continued and discontinued operations | | | (6,538,060 | ) | | (10,619,757 | ) | | (51,966,651 | ) |
| | | | | | | | | | | |
| Minority interest share of loss of consolidated subsidiaries from discontinued operations | | | 2,377 | | | - | | | 19,200 | |
| | | | | | | | | | | |
| Net loss | | | (6,535,683 | ) | | (10,619,757 | ) | | (51,947,451 | ) |
| | | | | | | | | | | |
| Other comprehensive income (loss): | | | | | | | | | | |
| Foreign currency translation | | | 13,490 | | | (7,860 | ) | | 5,630 | |
| | | | | | | | | | | |
| Net comprehensive loss | | $ | (6,522,193 | ) | $ | (10,627,617 | ) | $ | (51,941,821 | ) |
| | | | | | | | | | | |
| Net loss per share - basic and diluted - continuing operations | | $ | (0.35 | ) | $ | (0.35 | ) | | | |
| | | | | | | | | | | |
| Weighted shares outstanding - basic and diluted - continuing operations | | | 17,199,716 | | | 28,393,440 | | | | |
| | | | | | | | | | | |
| Net loss per share - basic and diluted - discontinued operations | | $ | (0.03 | ) | $ | (0.03 | ) | | | |
| | | | | | | | | | | |
| Weighted shares outstanding - basic and diluted - discontinued operations | | | 17,199,716 | | | 28,393,440 | | | | |
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Consolidated Statement of Stockholder's Equity (Deficiency)
| | | | | | | Deficit | | | | | | | |
| | | | | | | | | Accumulated | | | | Cumulative | | | |
| | | | | | | Additional | | During the | | | | Other | | | |
| | | Common stock | | | | Paid-in | | Development | | Subscription | | Comprehensive | | | |
| | | Shares | | Amount | | Capital | | Stage | | Receivable | | Income (loss) | | Total | |
| | | | | | | | | | | | | | | | |
| Balance April 12, 2000 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Issuance of stock for cash | | | 760,500 | | | 7,605 | | | 81,690 | | | - | | | - | | | - | | | 89,295 | |
| Net loss for the period | | | - | | | - | | | - | | | (7,773 | ) | | - | | | - | | | (7,773 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 31, 2001 | | | 760,500 | | | 7,605 | | | 81,690 | | | (7,773 | ) | | - | | | - | | | 81,522 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | - | | | - | | | - | | | (65,618 | ) | | - | | | - | | | (65,618 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 31, 2002 | | | 760,500 | | | 7,605 | | | 81,690 | | | (73,391 | ) | | - | | | - | | | 15,904 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Non-cash issuance of common stock | | | 3,600,000 | | | (3,244 | ) | | 403,249 | | | - | | | - | | | - | | | 400,005 | |
| Value of rent donated by a related party | | | - | | | - | | | 6,000 | | | - | | | - | | | - | | | 6,000 | |
| Net loss for the year | | | - | | | - | | | - | | | (825,493 | ) | | - | | | - | | | (825,493 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 31, 2003 | | | 4,360,500 | | | 4,361 | | | 490,939 | | | (898,884 | ) | | - | | | - | | | (403,584 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Non-cash issuance of stock | | | 1,012,500 | | | 1,013 | | | (1,013 | ) | | - | | | - | | | - | | | - | |
| Employee stock based compensation | | | - | | | - | | | 4,660,000 | | | - | | | - | | | (4,660,000 | ) | | - | |
| Exercise of options, split adjusted | | | 707,400 | | | 707 | | | 588,793 | | | - | | | - | | | - | | | 589,500 | |
| Expenses paid with stock | | | 2,250 | | | 2 | | | 8,748 | | | - | | | - | | | - | | | 8,750 | |
| Amortization of deferred stock compensation | | | - | | | - | | | - | | | - | | | - | | | 4,394,000 | | | 4,394,000 | |
| Issuance of common stock for cash and note | | | 42,533 | | | 42 | | | 199,958 | | | - | | | (50,000 | ) | | - | | | 150,000 | |
| Net loss for the year | | | - | | | - | | | - | | | (5,261,224 | ) | | - | | | - | | | (5,261,224 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 31, 2004 | | | 6,125,183 | | | 6,125 | | | 5,947,425 | | | (6,160,108 | ) | | (50,000 | ) | | (266,000 | ) | | (522,558 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Return of non-cash issuance | | | (1,012,500 | ) | | (1,013 | ) | | 1,013 | | | - | | | - | | | - | | | - | |
| Stock redemption | | | (900,000 | ) | | (900 | ) | | 900 | | | - | | | - | | | - | | | - | |
| Employee stock based compensation | | | - | | | - | | | 7,071,467 | | | - | | | - | | | - | | | 7,071,467 | |
| Exercise of options | | | 1,072,892 | | | 1,073 | | | 924,222 | | | - | | | - | | | - | | | 925,295 | |
| Stock re-issuance | | | 900,000 | | | 900 | | | (900 | ) | | - | | | - | | | - | | | - | |
| Amortization of deferred stock compensation | | | - | | | - | | | - | | | - | | | - | | | 266,000 | | | 266,000 | |
| Basis of assets acquired less then purchase price | | | - | | | - | | | (54,656 | ) | | - | | | - | | | - | | | (54,656 | ) |
| Stock dividend | | | 618,558 | | | 619 | | | (619 | ) | | - | | | - | | | - | | | - | |
| Collection of receivable | | | - | | | - | | | - | | | - | | | 50,000 | | | - | | | 50,000 | |
| Net loss for the year | | | - | | | - | | | - | | | (12,586,255 | ) | | - | | | - | | | (12,586,255 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 31, 2005 | | | 6,804,133 | | | 6,804 | | | 13,888,852 | | | (18,746,363 | ) | | - | | | - | | | (4,850,707 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuance | | | | | | | | | | | | | | | | | | | | | | |
| Exercise of options | | | 9,500 | | | 10 | | | 60,790 | | | - | | | - | | | - | | | 60,800 | |
| Sale of stock for cash | | | 4,000 | | | 4 | | | 19,996 | | | - | | | - | | | - | | | 20,000 | |
| Stock issued for related party advances | | | 500,000 | | | 500 | | | 3,384,094 | | | - | | | - | | | - | | | 3,384,594 | |
| Stock dividend | | | 365,882 | | | 366 | | | (366 | ) | | - | | | - | | | - | | | - | |
| Options issued for expenses | | | - | | | - | | | 250,000 | | | - | | | - | | | - | | | 250,000 | |
| Net loss for the period | | | - | | | - | | | - | | | (2,918,739 | ) | | - | | | - | | | (2,918,739 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance July 31, 2005 | | | 7,683,515 | | | 7,684 | | | 17,603,366 | | | (21,665,102 | ) | | | | | - | | | (4,054,052 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Value of stock options issued | | | - | | | - | | | 7,577,255 | | | - | | | - | | | - | | | 7,577,255 | |
| Exercise of options | | | 1,470,500 | | | 1,470 | | | 9,434,530 | | | - | | | - | | | - | | | 9,436,000 | |
| Stock issued for debt | | | 12,732,500 | | | 12,733 | | | 2,987,266 | | | - | | | - | | | - | | | 2,999,999 | |
| Stock dividend | | | 4,008,615 | | | 4,008 | | | (4,008 | ) | | - | | | - | | | - | | | - | |
| Net loss for the year | | | - | | | - | | | - | | | (13,126,909 | ) | | - | | | - | | | (13,126,909 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance July 31, 2006 | | | 25,895,130 | | | 25,895 | | | 37,598,409 | | | (34,792,011 | ) | | - | | | - | | | 2,832,293 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Value of stock options issued (valued at $1.05 per share) | | | - | | | - | | | 2,103,600 | | | - | | | - | | | - | | | 2,103,600 | |
| Exercise of options (valued at $3.55 per share) | | | 1,206,000 | | | 1,206 | | | 4,280,094 | | | - | | | - | | | - | | | 4,281,300 | |
| Value of stock issued for services (valued at $0.8387 per share) | | | 3,100,000 | | | 3,100 | | | 2,596,900 | | | - | | | - | | | - | | | 2,600,000 | |
| Stock dividends | | | 9,299,381 | | | 9,300 | | | (9,300 | ) | | - | | | - | | | - | | | - | |
| Net loss for the year | | | - | | | - | | | - | | | (10,619,757 | ) | | - | | | - | | | (10,619,757 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Foreign currency transactions | | | - | | | - | | | - | | | - | | | - | | | (7,860 | ) | | (7,860 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance July 31, 2007 | | | 39,500,511 | | | 39,501 | | | 46,569,703 | | | (45,411,768 | ) | | - | | | (7,860 | ) | | 1,189,576 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Stock issuances | | | | | | | | | | | | | | | | | | | | | | |
| Value of stock options issued (valued at $1.8933 per share) | | | - | | | | | | 804,652 | | | | | | | | | | | | 804,652 | |
| Common stock issued as collateral on loan | | | | | | | | | | | | | | | | | | | | | | |
| pre-reverse stock split | | | 10,000,000 | | | 10,000 | | | (10,000 | ) | | - | | | - | | | - | | | - | |
| Reverse stock split | | | (42,428,598 | ) | | (42,429 | ) | | 42,429 | | | - | | | - | | | - | | | - | |
| Common stock issued as collateral on loan post-reverse stock split | | | 16,071,427 | | | 16,071 | | | (16,071 | ) | | - | | | - | | | - | | | - | |
| Exercise of options post-reverse stock split (valued at $1.96 per share) | | | 203,917 | | | 204 | | | 399,796 | | | - | | | - | | | - | | | 400,000 | |
| Net loss for the year | | | - | | | - | | | - | | | (6,535,683 | ) | | - | | | - | | | (6,535,683 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Foreign currency transactions | | | - | | | - | | | - | | | - | | | - | | | 13,490 | | | 13,490 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance July 31, 2008 | | | 23,347,257 | | $ | 23,347 | | $ | 47,790,509 | | $ | (51,947,451 | ) | $ | - | | $ | 5,630 | | $ | (4,127,965 | ) |
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A Development Stage Company
Consolidated Statements of Cash Flows
| | | | | | | Inception | |
| | | | | | | (April 12,, 2000) | |
| | | YEAR ENDED | | through | |
| | | JULY 31, | | July 31, | |
| | | 2008 | | 2007 | | 2008 | |
| | | | | | | | |
| Cash provided (used in) Operating Activities: | | | | | | | | | | |
| Net (loss) | | $ | (6,535,683 | ) | $ | (10,619,757 | ) | $ | (51,947,451 | ) |
| Adjustments to reconcile net (loss) to cash | | | | | | | | | | |
| Depreciation and amortization | | | 103,407 | | | 130,476 | | | 819,966 | |
| Bad debt expense | | | 9,678 | | | 176,904 | | | 186,582 | |
| Gain/loss of sale of other assets | | | 788 | | | 314,381 | | | 315,169 | |
| Minority interest in income | | | (2,377 | ) | | - | | | - | |
| Non cash stock-based compensation | | | 804,652 | | | 4,703,599 | | | 24,550,293 | |
| (Increase) in accounts receivable | | | (21,285 | ) | | (156,278 | ) | | (200,183 | ) |
| (Increase) decrease in inventories | | | 138,465 | | | (142,806 | ) | | (287,310 | ) |
| (Increase) decrease in prepaid expenses and other assets | | | (8,886 | ) | | 1,566 | | | (69,119 | ) |
| (Increase) decrease in other assets | | | - | | | - | | | (50,000 | ) |
| Increase (decrease) in accounts payable and accrued expenses | | | (159,605 | ) | | 144,771 | | | 330,183 | |
| Increase in customer deposits | | | 149,160 | | | - | | | 149,160 | |
| (Increase) decrease in deferred revenue | | | (2,990 | ) | | 2,990 | | | - | |
| (Gain) on sale of subsidiary | | | (90,069 | ) | | - | | | (90,069 | ) |
| Loss from discontinued operations | | | 563,289 | | | - | | | 1,320,313 | |
Cash used in operating activities | | | (5,051,456 | ) | | (5,444,154 | ) | | (24,972,466 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Cash provided by (used in) Investing Activities: | | | | | | | | | | |
| Increase in other assets | | | - | | | (8,826 | ) | | (1,452,353 | ) |
| Proceeds from sale of other assets | | | - | | | 1,136,372 | | | 1,136,372 | |
| Proceeds from sale of subsidiary | | | 215,000 | | | - | | | 215,000 | |
| Decrease in marketable securities - restricted | | | 41,224 | | | 15 | | | - | |
| Purchase of property and equipment | | | (106,750 | ) | | (159,202 | ) | | (1,138,832 | ) |
| Proceeds from sale of property and equipment | | | 108,318 | | | - | | | 108,318 | |
| Investment in subsidiaries | | | (688,220 | ) | | - | | | (688,220 | ) |
| Increase in deferred patent costs | | | (19,903 | ) | | - | | | (19,903 | ) |
Cash provided by (used in) investing activities | | | (450,331 | ) | | 968,359 | | | (1,839,618 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Cash provided (used in) by Financing Activities: | | | | | | | | | | |
| Proceeds from the exercise of stock options | | | 400,000 | | | 4,281,300 | | | 15,692,895 | |
| Collection of stock receivable | | | - | | | - | | | 50,000 | |
| Proceeds from the issuance of debt | | | 6,194,713 | | | - | | | 9,114,713 | |
| Advances from related parties | | | 3,867,791 | | | 3,446,777 | | | 12,669,807 | |
| Payments of related party advances | | | (3,805,286 | ) | | (3,554,811 | ) | | (9,472,283 | ) |
| Payments of debt | | | (1,071,601 | ) | | (205,017 | ) | | (1,406,883 | ) |
| Proceeds from the issuance of common stock | | | - | | | - | | | 259,300 | |
Cash provided by financing activities | | | 5,585,617 | | | 3,968,249 | | | 26,907,549 | |
| | | | | | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | | 13,490 | | | (7,860 | ) | | 5,630 | |
| | | | | | | | | | | |
| Net increase (decrease) in cash | | | 97,320 | | | (515,406 | ) | | 101,095 | |
| | | | | | | | | | | |
| Cash at beginning of period | | | 3,775 | | | 519,181 | | | - | |
| | | | | | | | | | | |
| Cash at end of period | | $ | 101,095 | | $ | 3,775 | | $ | 101,095 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Supplemental information: | | | | | | | | | | |
| Cash paid during the year for: | | | | | | | | | | |
| Interest paid | | $ | 231,114 | | $ | 63,800 | | | | |
| Income taxes paid | | $ | - | | $ | - | | | | |
| Non - cash financing activities: | | | | | | | | | | |
| Fixed assets acquired by the issuance of debt | | $ | - | | $ | - | | $ | 1,300,000 | |
| Shares issued for related party advances | | $ | - | | $ | - | | $ | 3,000,000 | |
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Note 1. Financial statement presentation
The summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are the representations of management. These accounting policies conform to accounting policies generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
History and Nature of Business
Hybrid Technologies, Inc. (formerly Whistler Investments, Inc.) was incorporated under the laws of the State of Nevada on April 12, 2000. Hybrid Technologies, Inc.'s (the “Company”) original business was the exploration and development of mineral interests. The Company abandoned these interests in 2003.
The Company is currently pursuing the development and marketing of electric powered vehicles and products based on the advanced lithium battery technology it has developed. At July 31, 2008 the Company deems itself a development stage company as planned principal operations are minimal in its primary line of business.
On April 16, 2008, the Company sold their controlling interest of approximately 69% of the outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc., “SPI”). Prior to April 16, 2008, SPI was a related party who provided telecommunication services to business and residential customers utilizing VOIP technology and currently is researching and developing rechargeable lithium ion batteries.
Effective April 15, 2008, the Company entered into a license agreement with SPI providing for their license to SPI of their patent applications and technologies for rechargeable lithium ion batteries for hybrid vehicles and other applications (“licensed products”). Under the license agreement, the Company has the right to purchase their requirements of lithium ion batteries from SPI, and their requirements of lithium ion batteries shall be supplied by SPI in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for other customers of SPI. The Company’s cost for lithium ion batteries purchased from SPI shall be SPI’s actual manufacturing costs for such batteries for the fiscal quarter of SPI in which the Company’s purchase takes place.
SPI has agreed to invest a minimum of $1,500,000 in each of the next two years in development of the technology for the Licensed Products. To date, investments have been made in the amount of $24,500. If the SPI does not make the required investments, it will be in default under the license agreement; Hybrid would have the right to terminate the license agreement.
Basis of presentation
The Company’s financial statements for the year ended July 31, 2008 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company had $800,104 of revenue for the year ending July 31, 2008, of which $600,303 was from discontinued operations and as of July 31, 2008, there was a stockholders’ deficiency of approximately $4.1 million. Management recognized that the Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.
The Company’s business is subject to most of the risks inherent in the establishment of a new business enterprise. The likelihood of success of the Company must be considered in light of the expenses, difficulties, delays and unanticipated challenges encountered in connection with the formation of a new business, rising operating and development capital, and the marketing of a new product. There is no assurance the Company will ultimately achieve a profitable level of operations.
The Company presently does not have sufficient liquid assets to finance its anticipated funding needs and obligations. The Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and achieve a level of sales adequate to support its cost structure. Management is actively seeking additional capital to ensure the continuation of its current activities and complete its proposed activities. However, there is no assurance that additional capital will be obtained. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Mason Russell West, LLC
Littleton, Colorado
April 15, 2004
F-1
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in US Dollars)
January 31, January 31,
2004 2003
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ 169,428 $ 104
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 169,428 104
PROPERTY AND EQUIPMENT (Note 3) 3,219 5,639
INTANGIBLE ASSETS
Licensing fees (Notes 4 and 7) 431,625 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 604,272 $ 5,743
============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT
Accounts payable and accrued liabilities $ 133,017 $ 30,467
Due to related parties (Note 5) 553,983 378,860
Advances payable (Note 8) 8,205 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 695,205 409,327
- ----------------------------------------------------------------------------------------------------------------------------
Contingencies and Commitments (Notes 1 and 7)
STOCKHOLDERS' EQUITY (DEFICIT)
PREFERRED STOCK, $0.001 par value per share
Authorized - 5,000,000 shares
Issued - Nil - -
COMMON STOCK, $0.001 par value per share
Authorized - 21,000,000 shares
Issued - 20,416,677 shares (Fiscal 2003 - 14,535,000) 20,417 14,535
ADDITIONAL PAID IN CAPITAL 5,933,133 480,765
SUBSCRIPTION RECEIVABLE (Note 6(a)) (50,000) -
DEFERRED COMPENSATION (Note 6(b)) (266,000) -
DEFICIT (5,728,483) (898,884)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' DEFICIT (90,933) (403,584)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 604,272 $ 5,743
============================================================================================================================
F-2
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in US Dollars)
Accumulated from
April 12, 2000
Year Ended Year Ended (Date of Inception)
January 31, January 31, to January 31,
2004 2003 2004
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES
Depreciation and amortization $ 14,195 $ 1,864 $ 18,586
Management and consulting fees (Note 5(a)) 178,996 11,500 192,996
General and administrative 97,515 23,082 122,648
Professional fees 87,635 20,358 162,069
Rent and office 16,304 6,620 36,450
Write-off of mineral property - 5,150 5,150
Research and development 20,268 - 20,268
Stock-based compensation (Note 2(i)) 4,394,000 - 4,394,000
- ----------------------------------------------------------------------------------------------------------------------------
4,808,913 68,574 4,952,167
INTEREST EXPENSE 24,070 - 24,070
OTHER (INCOME) (3,384) (105) (4,778)
- ----------------------------------------------------------------------------------------------------------------------------
NET LOSS BEFORE DISCONTINUED OPERATIONS (4,829,599) (68,469) (4,971,459)
LOSS FROM DISCONTINUED OPERATIONS (Note 9) - (757,024) (757,024)
- ----------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD $ (4,829,599) $ (825,493) $ (5,728,483)
============================================================================================================================
Net Loss Before Discontinued Operations $ (0.29) $ (0.01)
Loss from Discontinued Operations $ - $ (0.06)
Net Loss Per Share - Basic and Diluted $ (0.29) $ (0.07)
Weighted average number of common shares outstanding 16,689,000 12,036,000
F-3
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in US Dollars)
Accumulated from
April 12, 2000 (Date
Year Ended Year Ended of Inception) to
January 31, January 31, January 31,
2004 2003 2004
- -----------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period $ (4,829,599) $ (825,493) $ (5,728,483)
Adjustments to reconcile net loss to cash
Depreciation and amortization 14,195 1,864 18,586
Donated rent - 6,000 6,000
Write-off of mineral property - 5,150 5,150
Stock-based compensation 4,394,000 - 4,394,000
Loss from discontinued operations - 757,024 757,024
Expenses settled with the issuance of common stock 8,750 - 8,750
Changes in operating assets and liabilities
Increase in accounts payable and accrued liabilities 102,551 22,385 133,018
Increase in advances payable 8,205 - 8,205
Increase in amounts due to related parties 175,122 21,836 196,958
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Operating Activities (126,776) (11,234) (200,792)
- -----------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of licensing rights (443,400) - (443,400)
Purchase of mineral properties - - (5,150)
Purchase of property and equipment - - (10,030)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities (443,400) - (458,580)
- -----------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from exercise of stock options 589,500 - 589,500
Proceeds from issuance of common stock 150,000 - 239,300
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activities 739,500 - 828,800
- -----------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH 169,324 (11,234) 169,428
CASH, BEGINNING OF PERIOD 104 11,338 -
- -----------------------------------------------------------------------------------------------------------------------------
CASH, END OF YEAR $ 169,428 $ 104 $ 169,428
=============================================================================================================================
NON-CASH FINANCING AND INVESTING ACTIVITIES
Issuance of common stock for financing agreement 3,375,000 - 3,375,000
Issuance of common stock - 400,000 400,000
Assumption of mortgage payable - 377,960 377,960
Promissory note payable - 20,396 20,936
Expenses settled with issuance of common stock 8,750 - 8,750
SUPPLEMENTAL DISCLOSURES
Interest paid - - -
Income taxes paid - - -
F-4
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in US Dollars)
Additional
Common Stock Paid In Subscription Deferred Accumulated
Shares Amount Capital Receivable Compensation Deficit Total
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, April 12, 2000 (Date of
Inception) - $ - $ - $ - - $ - $ -
Issuance of stock for cash 2,535,000 2,535 86,765 - - - 89,300
Net loss for the period - - - - - (7,773) (7,773)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2001 2,535,000 2,535 86,765 - - (7,773) 81,527
Net loss for the year - - - - - (65,618) (65,618)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2002 2,535,000 2,535 86,765 - - (73,391) 15,909
Non-cash issuance of common stock
(Note 9) 12,000,000 12,000 388,000 - - - 400,000
Net loss for the year - - - - - (814,343) (814,343)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2003 14,535,000 14,535 474,765 - - (887,734) (398,434)
Prior Period Adjustment (Note 11) - - 6,000 - - (11,150) (5,150)
- ---------------------------------------------------------------------------------------------------------------------------
Restated 14,535,000 14,535 480,765 - - (898,884) (403,584)
Non-cash issuance of common stock 3,375,000 3,375 (3,375) - - - -
Issuance of common stock for cash 141,177 141 199,859 (50,000) - - 150,000
Issuance of common stock from
exercise of stock options 2,358,000 2,358 587,142 - - - 589,500
Expenses settled with common stock 7,500 8 8,742 - - - 8,750
Non-employee stock-based compensation - - 4,660,000 - (4,660,000) - -
Amortization of deferred stock
compensation - - - - 4,394,000 - 4,394,000
Net loss for the year - - - - - (4,829,599) (4,829,599)
- ----------------------------------------------------------------------------------------------------------------------------
Balance, as at January 31, 2004 20,416,667 $20,417 $5,933,133 $ (50,000) $ (266,000) $(5,728,483)$ (90,933)
============================================================================================================================
F-5
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 1 - NATURE OF OPERATIONS
The Company was incorporated in the State of Nevada, USA on April 12, 2000 under
the name Whistler Investments, Inc. The Company's principal business was the
exploration and development of mineral resources; however, during the period the
Company abandoned its mineral property and currently does not have an operating
business (see Note 9).
These financial statements have been prepared on a going concern basis, which
implies the Company will continue to realize its assets and discharge its
liabilities in the normal course of business. The Company has neither a history
of earnings nor has it paid any dividends and it is unlikely to pay dividends or
enjoy earnings in the immediate or foreseeable future. During the period since
inception on April 12, 2000 to January 31, 2004, the Company has incurred
operating losses aggregating $5,728,483. At January 31, 2004, the Company has a
working capital deficiency of $525,777 and a stockholders' deficit of $90,933.
The continuation of the Company as a going concern is dependent upon the
continued financial support from its shareholders and other related parties, the
ability of the Company to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. There is no assurance
that the Company will successfully acquire businesses or assets that will
produce a profit. Moreover, if a potential business or asset is identified which
warrants acquisition or participation, additional funds may be required to
complete the acquisition or participation and the Company may not be able to
obtain such financing on terms which are satisfactory to the Company. There is
substantial doubt concerning the Company's ability to continue as a going
concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessaryuncertainties should the Company be unable to continue as a going concern.
On January 19, 2004, HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The consolidated financial statements included the accounts and records of the Company entered into an Investment Agreement and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company does not have any special purpose entities.
Where the Company’s ownership is less than 100 percent, the minority ownership interests are reported in the Consolidated Balance Sheets as a Registration Rights Agreement ("liability. The Company record minority interest expense which reflects the Agreement") with Dutchess Private Equities
Fund, L.P. (Dutchess). Pursuantportion of the earnings (loss) of majority owned operations which are applicable to the Agreement, the Company may periodically
"put" or require Dutchess to purchase shares of common stock at below market
prices in exchange for the utilization of a ten million dollar equity line of
financing.minority interest partners. The Agreement requires the Company to file an SB-2 Registration
Statement with the Securities and Exchange Commission to register for resale by
Dutchess the shares of common stock purchased. The Registration Statement must
be filed within 30 daysminority ownership of the issuanceCompany’s earnings is classified as “Minority interest share of (earnings) loss of consolidated subsidiaries” from discontinued operations in the Consolidated Statements of Operations.
The following is a listing of the Company's audited financial
statements for the fiscal year ended January 31, 2004.
Subsequent to year-end, the Company received one million dollars of a three
million dollar financing from Sterling Capital, Inc. for the development of
specific products for various customers (see Note 12(b)).
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
a) Cashsubsidiaries and Cash Equivalents
Cash equivalents consist of highly liquid investments, which are readily
convertible into cash with maturities of three months or less when
acquired.
b) Use of its ownership interests:
| Global Electric, Corp. | | | 67.57 | % |
| R Electric Car, Co. | | | 67.57 | % |
| Solium Power, Corp. | | | 67.57 | % |
| Hybrid Technologies USA Distributing Inc. | | | 100.00 | % |
| Hybrid Electric Vehicles India Pvt. Ltd. | | | 100.00 | % |
Estimates
The preparation of financial statements prepared in conformityaccordance with the accounting standards generally accepted in the United States generally accepted accounting principlesof America requires management to make estimates and assumptions that affect the reported amounts 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 period.statements. Actual results could differ from those estimates.
c) Intangible Assets
Intangible assets consist
Financial instruments
The fair value of a Product Licensing Agreement,accounts receivables, accounts payable and accrued expenses and advances from related parties approximates fair value based on their short maturities. The fair value of notes payable approximate fair value based the value of other notes having the same or similar terms, interest rates and collateral.
Accounts receivables
The Company provides credit to customers in the normal course of business. An allowance for accounts receivable is estimated by management based in part on the aging of receivables and historical transactions. Periodically management reviews accounts receivable for accounts that appear to be uncollectible and writes off these uncollectible balances against the allowance accordingly.
Inventories
Inventories are stated at the lower of cost or market. Cost is based on the specific identification method.
Property and equipment
Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment are accounted for by accelerated methods over the following estimated useful lives:
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
| | Lives | | Methods | |
| Building improvements | | | 39 years | | | Straight line | |
| Furniture and fixtures | | | 10 years | | | Accelerated | |
| Software | | | 3-5 years | | | Straight line | |
| Computers | | | 5 years | | | Straight line | |
Deferred patent costs
The Company capitalizes costs directly incurred in pursuing patent applications as deferred patent costs. When such applications result in an issued patent, the related costs are amortized over the remaining legal life of the patents, which is amortizedassumed to be 17 years, using the straight-line method. On a quarterly basis, the Company reviews the issued patents and pending patent applications and if the Company determines to abandon a patent application, or an issued patent no longer has economic value, the unamortized balance in deferred patent costs relating to that patent is immediately expensed. As of July 31, 2008 there were only pending patent applications.
Stock based compensation
The Company issues stock options to employees and other certain service providers under stockholder approved stock option programs that provide the right to purchase the Company’s stock pursuant to stock purchase programs. The Company also issued common stock for services performed. The fair value of the stock options issued is estimated on a straight-line basis over five years.the date of grant using the Black Scholes Option Pricing Model. The fair value of common stock issued for services is estimated on the date of issuance based on the value of the stock issued or the consideration received. See Note 8 of Notes to Consolidated Financial Statements for further disclosures and discussions.
Revenue recognition
The Company recognizes revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" and other relevant accounting literature. Revenue is recognized when the product has been delivered and title and risk of loss have passed to the customer, collection of the resulting receivable is deemed reasonably assured by management, persuasive evidence of an arrangement exists and the sale price is fixed and determinable.
Shipping and handling
Shipping and handling costs related to services and product sales are expensed as incurred.
Advertising
Advertising costs are expensed as incurred and are included in general and administrative expenses. Total advertising expenditures for the years ended July 31, 2008 and 2007 and inception to July 31, 2008 date amounted to approximately $755,000, $282,000 and $1,778,000, respectively.
Concentration of risk
The Company maintains cash deposit accounts and certificates of deposits which at times may exceed federally insured limits. These accounts have not experienced any losses and the Company believes it is not exposed to any significant credit risk related to cash.
Income taxes
The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.
The principal item giving rise to deferred taxes is the net operating loss carry forward.
Effective August 1, 2007, uncertain tax positions are accounted for in accordance with FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes." See Note 11 for further discussion.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Long-lived assets
The Company accounts for long-lived assets in accordance with Statement of Financial Accounting Standard No. 144 (SFAS 144) "Accounting for Long-Lived Assets". The carrying value of
the License is evaluated annually to determine if there were events or
circumstances, which would indicate a possible inability to recover the
carrying amount. Where an impairment loss has been determined the carrying
amount is written-down to fair market value.
F-6
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Long-Lived Assets
In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
of Long Lived Assets", the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts orand circumstances that may suggest impairment. The Company recognizes an
impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are
measured as the excess of the carrying amountThe write down of the asset over its
estimated fair value.
e) Property and Equipment
Capital assets consist of computer equipment and furniture and fixtures,
are recorded at cost and are depreciated over their estimated useful life
on a declining balance basis at a rate of 30% and 20% respectively per
annum.
f) is charged to the period in which the impairment occurs.
Foreign Currency Translation
currency translation
The financial statements are presented in United States dollars in
accordance with Financial Accounting Standards Board ("FASB") Statement of
Financial Accounting Standard ("SFAS") No. 52, "Foreign Currency
Translation". Foreign denominated monetary assetsfunctional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated to United States dollars using foreign exchange rates in effect
at the balance sheet date. Non-monetarydate rates of exchange and income, expense and cash flow items are translated at historicalthe average exchange rates, exceptrate for items carried at market value, which are
translated at the rate of exchange in effect at the balance sheet date.
Revenues and expenses are translated at average rates of exchange during the period. ExchangeTranslation adjustments in future periods will be recorded in Cumulative Other Comprehensive Income. The translation gains or losses arising on foreign currency
translation are included in the determination of operating resultswere not material for the period.
g) Basicyears ended July 31, 2008 and Diluted Net Income (Loss) Per Share
2007.
Comprehensive loss
The Company computes net income (loss) per sharereports comprehensive loss in accordance with the requirements of SFAS No. 128, "Earnings130. For the years ended July 31, 2008 and 2007, the difference between net loss and comprehensive loss is foreign currency translation.
Loss per Share" (SFAS 128). SFAS 128 requires presentation of
both basic and diluted earningsShare
Basic loss per common share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common stockholders (numerator)loss by the weighted average number of common shares outstanding (denominator) during the specified period. Diluted EPS gives
effect to all dilutiveloss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares outstandingduring the specified period. All potentially dilutive securities, which include options and warrants convertible into 1,019,000 and 794,000 common shares at July 31, 2008 and 2007, respectively, have been excluded from the computations, as their effect is anti-dilutive.
Discontinued Operations
In April 2008, the Company completed the sale of SPI. The operations of SPI were accounted for as discontinued operations in the consolidated financial statements for the years presented herein. The divestiture resulted in a loss of $473,220 and $752,880, respectively, for the years ended July 31, 2008, and 2007, and $1,320,313 from inception (August 12, 2000) through July 31, 2008.
Summarized combined statement of loss for discontinued operations is as follows:
| | | YEAR ENDED July 31, | |
| | | | 2008 | | | 2007 | |
| Net sales | | $ | 600,303 | | $ | 1,330,062 | |
| Loss before income tax | | | (1,163,592 | ) | | (2,082,942 | ) |
| Provision for income taxes | | | - | | | - | |
| Loss from operations -net tax | | | (563,289 | ) | | (752,880 | ) |
| Gain on sale of discontinued operations | | | 90,069 | | | - | |
| Provision for income taxes | | | - | | | - | |
| Loss from discontinued operations - net of tax | | $ | (473,220 | ) | $ | (752,880 | ) |
Reclassification
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. These reclassifications have had no impact on the net. The reclassification consisted of other assets being reclassified as marketable securities. The Company reclassified certain continuing operations to discontinued operations for the year ended July 31, 2007 in the Company’s Consolidated Statements of Operations.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Recently issued accounting pronouncements
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141(R), “Business Combinations.” This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquired and the goodwill acquired. This statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for us for acquisitions made after November 30, 2009. We are evaluating the impact of this standard and do not expect the adoption of SFAS 141(R) to have a material impact on its financial statements.
In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty in tax positions. This interpretation requires that we recognize in our financial statements the benefit of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 become effective as of the beginning of our 2008 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. We adopted FIN 48 as of January 1, 2007 and do not feel that FIN 48 will have an impact on our financial statements.
In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements" (FAS 157), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of FAS 157 become effective as of the beginning of our 2009 fiscal year. We do not expect the adoption of SFAS No. 157 to have a material impact on it consolidated financial position, results of operations or cash flows.
In September 2006, the FASB issued Statement No. 158, "Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans - an Amendment of FASB Statements No. 87, 88, 106, and 132(R)" (FAS 158). FAS 158 requires that employers recognize the funded status of their defined benefit pension and other postretirement plans on the balance sheet and recognize as a component of other comprehensive income, net of tax, the plan-related gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost. We do not feel the implementation of this will have a significant impact on our financial statements.
In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including stock options, usingan amendment of FASB Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The provisions of FAS 159 become effective as of the treasury stock method,beginning of our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will have on our financial statements.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to establish accounting and convertible preferred stock, using the if-converted method. In computing
Diluted EPS, the average stock pricereporting standards for the periodnoncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the Consolidated Financial Statements. SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the non-controlling interest on the face of the consolidated statement of income.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Under SFAS No. 160, the accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation must be accounted for as equity transactions for the difference between the parent’s carrying value and the cash exchanged in the transaction. In addition, SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated (except in the case of a spin-off), and requires expanded disclosure in the Consolidated Financial Statements that clearly identify and distinguish between the interests of the parent’s ownership interest and the interests of the noncontrolling owners of a subsidiary. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company will adopt SFAS No. 160 on January 1, 2009, as required, and is currently evaluating the impact of such adoption on its financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No. 161”). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company does not believe that SFAS No. 161 will have a material impact on its financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in determiningthe preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. This Statement is effective sixty days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The Company is currently evaluating the potential impact, if any, of the adoption of SFAS No. 162 on its financial statements.
Note 2. Inventories
Inventories consist of the following:
| | | July 31, | |
| | | 2008 | | 2007 | |
| Raw materials | | $ | 134,456 | | $ | 323,170 | |
| Work in progress | | | 117,124 | | | - | |
| Finished goods | | | 35,730 | | | 102,605 | |
| | | $ | 287,310 | | $ | 425,775 | |
Raw materials, work in progress and finished goods for the year ended July 31, 2008, is related to the Company’s planned sales of electric powered vehicles. For the year ended July 31, 2007, raw materials relate to the Company’s planned sales of electric powered vehicles and finished goods related to its telecommunication operations that were sold in April 2008.
Note 3. Property and equipment
Property and equipment consists of:
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
| | | July 31, | |
| | | 2008 | | 2007 | |
| Building and improvements | | $ | 1,272,352 | | $ | 1,270,637 | |
| Furniture and fixtures | | | 19,548 | | | 115,944 | |
| Office equipment | | | 137,030 | | | 114,825 | |
| Machinery and equipment | | | 19,026 | | | 27,389 | |
| Vehicles | | | 60,979 | | | 73,203 | |
| Software costs | | | 11,874 | | | 19,993 | |
| Land | | | 700,000 | | | 700,000 | |
| | | | 2,220,809 | | | 2,321,991 | |
| Less accumulated depreciation | | | (206,229 | ) | | (201,648 | ) |
| | | $ | 2,014,580 | | $ | 2,120,343 | |
For the years ended July 31, 2008, and 2007 and inception to date, depreciation amounted to $103,407, $130,476 and $819,966, respectively.
Note 4. Other assets
Other assets consist of:
| | | July 31, | |
| | | 2008 | | 2007 | |
| Deposits | | $ | 1,600 | | $ | 1,600 | |
| Other notes receivable - net | | | 50,000 | | | 50,000 | |
| | | $ | 51,600 | | $ | 51,600 | |
On June 28, 2006, the Company executed two $50,000 notes, one bearing interest at 6% and the other non-interest bearing note, to a contractor, as compensation for monies paid by the Company for purchasing a patent, and $50,000 for inventory that was either missing or damaged.
On August 19, 2008, the non-interest bearing note in the amount of $50,000 was repaid. The note is included in other current assets on the Company's balance sheet at July 31, 2008.
The interest bearing note is due June 23, 2011 and the Company is holding the patent as collateral which the Company believes to be worth more than the note. The Company is currently in negotiations regarding the repayment of the note.
Note 5. Advances from related parties and related party transactions
During the years ended July 31, 2008 and 2007, the Company received and repaid additional advances from Del Mar Ventures Corp, a company owned by Aarif Jamani (a Company stockholder) of approximately $9,940 and $10,000, respectively in 2008, and $2,334,000 and $2,418,000, respectively in 2007. As of July 31, 2008 and 2007, the balance was $0 and $60, respectively.
The Company received and repaid additional advances from SSRI (owned by a Company stockholder) for the years ended July 31, 2008 and 2007 in amounts of approximately $3,732,000 and $3,592,000, respectively for 2008 and $109,000 and $210,000, respectively for 2007. As of July 31, 2008 and 2007, the amount due to SSRI was $38,000 and $0, respectively.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
During the years ended July 31, 2008 and 2007 the Company received additional advances from Salim Rana (a Company stockholder) of approximately $0 and $563,000, respectively and repaid $83,000 and $480,000, respectively. As of July 31, 2008 and 2007, the amount due to Salim Rana was $0 and $83,000, respectively.
During the years ended July 31, 2008 and 2007, the Company received advances from A & S Holding (owned by a previous Company president) of approximately $11,000 and $436,000, respectively, and repaid $0 and $447,000 for 2007. As of July 31, 2008 and 2007, the amount due to the Company was $0 and $11,000, respectively.
The Company received advances from Greg Navone (a Director of the Company) for the years ended July 31, 2008 and 2007 in amounts of $115,000 and $5,000, respectively, and repaid $120,000 and $-0-, respectively. As of July 31, 2008 and 2007, the amount due by the Company was $0 and $5,000, respectively.
Due from related parties and advances from related parties are reported as current assets or liabilities. These advances are not subject to written agreements and have no specific repayment terms but are deemed due on demand and are not interest bearing notes except for the Greg Navone note.
Note 6. Long-term debt
Long-term debt consists of:
| | | July 31, | |
| | | 2008 | | 2007 | |
| Note payable to Richard Howard, | | | | | | | |
| paid in full in November 2007 (1) | | $ | - | | $ | 1,044,718 | |
| | | | | | | | |
| 10.875% note payable to Bayview Loan | | | | | | | |
| Servicing, LLC, payable in monthly | | | | | | | |
| installments of approximately $11,388 including | | | | | | | |
| interest, collateralized by real property | | | | | | | |
| due in full on or before December 2022 (1) | | | 984,204 | | | - | |
| | | | | | | | |
| 10% note payable to Wyndom Capital | | | | | | | |
| Investments, Inc., payable in October 2010 | | | | | | | |
| collateralized by 10,000,000 shares of | | | | | | | |
| the Company's common stock (2) | | | 3,971,150 | | | | |
| | | | | | | | |
| 10% note payable to Crystal Capital | | | | | | | |
| Ventures, payable in May 2011 | | | | | | | |
| collateralized by 7,500,000 shares of | | | | | | | |
| the Company's common stock (3) | | | 1,211,000 | | | - | |
| | | | | | | | |
| 15.8% note payable to Allegiance | | | | | | | |
| Direct Bank, payable in monthly | | | | | | | |
| installments of approximately $525, | | | | | | | |
| due in full on October 2008 (4) | | | 1,476 | | | | |
| | | | 6,167,830 | | | 1,044,718 | |
| Less current portion | | | (32,422 | ) | | (241,460 | ) |
| | | $ | 6,135,408 | | $ | 803,258 | |
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Principal maturities on continuing operations are as follows as of July 31, 2008:
| 2009 | | $ | 32,422 | |
| 2010 | | | 4,004,972 | |
| 2011 | | | 1,249,807 | |
| 2012 | | | 43,245 | |
| 2013 | | | 48,189 | |
| Thereafter | | | 789,194 | |
| | | $ | 6,167,830 | |
(1) In November 2007, the Company refinanced a loan on a building. The Company paid the remainder of the loan to Richard Howard, with $50,000 in cash and $1,000,000 from the new loan proceeds. The new loan with Bayview Loan Servicing, LLC is $1,000,000. The loan has an initial interest rate at 10.875% per annum with a monthly payment of $11,388, including interest. The loan is due on December 1, 2022. After the first 24 months, the interest rate adjusts to Prime plus 4.875%. Interest rate changes are limited to 2% increase or decrease in any annual adjustments. Interest expense to Richard Howard was $-0- for the year ended July 31, 2008 due to the advance payment, $63,200 for the year ended July 31, 2007, and $63,200 from inception (August 12, 2000) through July 31, 2008. Interest expense for the years ended July 31, 2008 and 2007 for Bayview Loan Servicing, LLC is approximately $63,900 and $0, respectively, and $65,239 from inception (August 12, 2000) through July 31, 2008.
(2) In October 2007, the Company entered into a loan agreement with Wyndom Capital Investments, Inc. (“Wyndom”). The Company issued 10,000,000 pre-reverse stock split shares (computes to 1,428,573 post-reverse stock split shares) of outstanding stock as collateral for the above note and 8,571,427 post reverse stock split shares of outstanding stock as collateral to total 10,000,000 post reverse stock split shares. The agreement provides loans of up to $4,000,000 with interest payable monthly at a rate of 10% per annum and due in full in October of 2010. Loans under the agreement are secured by the Company’s shares of common stock at a rate of two and one half shares to each dollar of principal. As of July 31, 2008, the Company has borrowed approximately $3,971,000 under the loan agreement. The Company paid interest to Wyndom of approximately $397,000 for the year ended July 31, 2008 and $0 for the year ended July 31, 2007, respectively and $397,000 from inception (August 12, 2000) through July 31, 2008. If Wyndom were to declare default and take possession of the collateral, the number of shares assumedis sufficient to be purchasedmake Wyndom the controlling shareholder.
(3) On May 5, 2008, the Company entered into a loan agreement with Crystal Capital Ventures Inc. (“Crystal Capital”). The loan agreement provides for loans to the Company of up to $3,000,000, with a minimum initial loan of $500,000 taking place on May 19, 2008. The notes bear interest payable monthly in arrears at the rate of 10% per annum; and mature and are due and payable May 4, 2011. The loans under the loan agreement are secured by shares of the Company’s common stock held by Crystal Capital. The Company is required to issue shares as collateral at the rate of two and one half shares of the Company’s common stock for each dollar principal amount of the loan advanced to the Company. Following disbursement of the first $1,000,000 of funds pursuant to the loan agreement, on May 27, 2008, the Company issued 7,500,000 shares of common stock as collateral to Crystal Capital.
As of July 31, 2008, the Company has borrowed $1,211,000 under the loan agreement. The Company paid interest to Crystal Capital of approximately $121,000 for the year ended July 31, 2008 and $0 for the year ended July 31, 2007, respectively, and $121,000 from inception (August 12, 2000 through July 31, 2008)..
(4) On January 31, 2008 the Company financed a workman’s compensation policy with Allegiance Direct Bank for the period January 31, 2008 to January 31, 2009 for $6,396. The Company was required to make a down payment of approximately $1,966 in January 2008 and monthly payments including interest of 15.8%. The interest expense for the year ended July 31, 2008 and inception (August 12, 2000) through July 31, 2008, was $195.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Note 7. Stockholders' equity (deficit)
In December 2007, the Company’s shareholders approved a 1:7 reverse stock split. Except for the presentation of common shares authorized and issued on the consolidated balance sheet and shares presented in the consolidated statement of stockholders’ equity (deficit), all shares and par share information has been revised to give retroactive effect to the reverse stock split. Authorized shares were 50,000,000 and were increased to 250,000,000 on December 24, 2007 (computes to 35,714,285 post-reverse stock split authorized shares). Wyndom Capital Investments, Inc. currently holds 10,000,000 post reverse stock split shares as collateral for a loan of up to $4,000,000 and Crystal Capital Ventures Inc. holds 7,500,000 post reverse stock split shares as collateral for a loan up to $3,000,000 as discussed in Note 6.
During the year ended July 31, 2007:
The Company issued stock options valued in the amount of $2,103,600.
The Company issued 1,206,000 shares of stock upon the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive.
h) Financial Instruments
The fair value of cash, accounts payable, accrued liabilities, and amounts
due to related parties approximates their carrying values due to the
immediate or short-term maturity of these financial instruments.
i) Stock Based Compensation
options.
The Company accountsissued 3,100,000 shares for services valued in the amount of $260,000.
The Company declared stock dividends totaling 9,299,381 shares.
During the year ended July 31, 2008:
The Company issued stock options valued in the amount of $804,652.
10,000,000 shares of common stock were issued in escrow as collateral pre-reverse stock split.
The Company had a 1:7 reverse stock split.
16,071,427 shares of common stock were issued in escrow as collateral post-reverse stock split. As of July 31, 2008, the total amount of post-reverse stock split shares held as collateral totaled 17,500,000 shares.
The Company issued 203,917 shares of stock upon the exercise of stock options.
Note 8. Stock options and deferred stock-based awardscompensation
Prior to August 1, 2006, the Company accounted for its share-based compensation plans using the intrinsic value method of accounting in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). Under the
intrinsic value method of accounting, compensation expense is recognized if
the exercise price of the Company's employee stock options is less than the
market price of the underlying common stock on the date of grant.Employees," and related Interpretations, as permitted by Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation,Compensation." (SFAS 123), established a fair value based
method of accounting for stock-based awards. UnderEffective August 1, 2006, we adopted the provisions of SFAS No. 123(R), "Share-Based Payment." The adoption of SFAS No. 123(R) resulted in the recording of compensation expense for employee stock options and employee stock purchase rights in our financial statements. Such compensation expense is recognized over the requisite service period based on the fair value of the options or rights on the date of grant.
Using the modified-prospective transition method, the compensation cost recognized during the year ended July 31, 2007, included (i) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, companies that electand (ii) compensation cost for all share-based payments granted subsequent to account for stock-based awardsJanuary 1, 2006, based on the grant date fair value estimated in accordance with the provisions of APB 25 are requiredSFAS No. 123(R). Results for prior periods have not been restated.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to discloseConsolidated Financial Statements
On November 10, 2005, the pro forma net
income (loss) that would have resulted fromFASB issued FASB Staff Position No. FAS 123R-3, "Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards." The Company has elected to adopt the usealternative transition method provided in the FASB Staff Position for calculating the tax effects of share-based compensation pursuant to SFAS No. 123(R).
The following table reflects the
fairassumptions utilized to value
based
methodthe 2006 stock option plan for the year ended July 31, 2008 and 2007 under SFAS
123.
F-7
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
i) Stock Based Compensation (continued)
During123R and using the year, the Company adopted the disclosure requirements of
Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure an Amendment of FASB
Statement No. 123" (SFAS 148), to require more prominent disclosures in
both annual and interim financial statements regarding the method of
accounting for stock-based employee compensation and the effect of the
method used on reported results.
The pro forma information is as follows:
Year Ended
January 31,
2004 2003
$ $
Net loss -- as reported (4,829,599) (825,493)
Add: Stock-based compensation expense included in net loss -- as
reported 4,394,000 -
Deduct: Stock-based compensation expense determined under fair
value method (4,439,960) -
Net loss -- pro forma (4,875,559) (825,493)
Net loss per share (basic and diluted) -- as reported (0.29) (0.07)
Net loss per share (basic and diluted) -- pro forma (0.29) (0.07)
Black-Scholes valuation model. Among other factors, the Black-ScholesBlack Scholes model considers the expected life of the option and the expected volatility of the Company's stock price in arriving at an option valuation. For pro forma purposes, the estimated fair
valueThe risk-free interest rate is based upon U.S. Treasury Rates for instruments with similar terms. The expected term of the Company's stock-based awards is amortized overgrants were estimated based upon the vesting
period of the underlying instruments. For the year ended January 31, 2004,
the fair value of options granted using Black-Scholes was determined using
the following weightedCompany’s prior average assumptions.
Expected dividend yield 0%
Risk-free interest rate 1-5%
Expected volatility 100%
Expected life from the vesting date (in years) 1.0
j) New Accounting Pronouncements
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances).experience. The requirements of SFAS No. 150 apply to issuers'
classification and measurement of freestanding financial instruments,
including those that comprise more than one option or forward contract.
SFAS No. 150 does not apply to features that are embedded in a financial
instrument that is not a derivative in its entirety. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatory redeemable
financial instruments of non-public entities. It is to be implemented by
reporting the cumulative effect of a change in an accounting principle for
financial instruments created before the issuance date of SFAS No. 150 and
still existing at the beginning of the interim period of adoption.
Restatement is not permitted. The adoption of this standard did not have a
material effect on the Company's results of operations or financial
position.
F-8
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
k) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for
the reporting and display of comprehensive loss and its components in the
financial statements. As at January 31, 2004 and 2003, the Company has no
items that represent comprehensive loss and, therefore, has not included a
schedule of comprehensive loss in the financial statements.
l) Research and Development
The Company expenses research and development costs as incurred.
NOTE 3 - PROPERTY AND EQUIPMENT
January 31, January 31,
2004 2003
Accumulated Net Book Net Book
Cost Amortization Value Value
---------------------------------------------------------------------
Furniture and fixtures $ 4,819 $ 2,815 $ 2,004 $ 3,084
Computer equipment 5,211 3,996 1,215 2,555
---------------------------------------------------------------------
$ 10,030 $ 6,811 $ 3,219 $ 5,639
=====================================================================
NOTE 4 - INTANGIBLE ASSET
January 31, January 31,
2004 2003
Accumulated Net Book Net Book
Cost Amortization Value Value
---------------------------------------------------------------------
License fees (See Note 7) $443,400 $ 11,775 $431,625 $153,075
=====================================================================
NOTE 5 - RELATED PARTY TRANSACTIONS
a) The Company incurred management fees of $19,365 (2003 - $11,500) to an
officer during the years ended January 31, 2004 and 2003,respectively.
b) The Company agreed to assume debt in the amount of $377,960 owing to a
related party as part of a share purchase agreement (see Note 9). The debt
is non-interest bearing and was to be repaid as to $200,000 on January 31,
2003 and $200,000 on January 31, 2004. Late payments are subject to simple
interest payable on the overdue principal at a fixed rate of 10% per annum,
calculated in advance monthly commencing on the day after a principal
payment is due. The Company recorded interest expense of $24,070 for the
year ended January 31, 2004.
NOTE 6 - STOCKHOLDERS' EQUITY
a) Common Shares
i) During the quarter ended October 31, 2003, the Company issued 3,375,000
(split adjusted) restricted common shares to RS International
Consultants GMBH ("RS"), an international business consulting company,
pursuant to a $5,000,000 financing agreement. The financing agreement
has not closed and the Company has not obtained any financingpaid cash dividends to date and does not plan to pay cash dividends in the near future. The volatility assumptions were derived from RS.
The Company is actively pursuinghistorical volatilities of competitors whose shares are traded in the return of the restricted common
shares.
F-9
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 6 - STOCKHOLDERS' EQUITY (continued)
a) Common Shares (continued)
ii) During the final quarter ended January 31, 2004, the Company issued
141,177 common shares at $1.42 per share for total proceeds of
$200,000. A balance of $50,000 was uncollected as of January 31, 2004public markets and is recorded as a reduction of stockholders' equity.
iii) During the year ended January 31, 2004 the Company issued 2,358,000
common shares resulting from the exercise of stock options for total
proceeds of $589,500.
iv) During the final quarter ended January 31, 2004, the Company issued
7,500 common shares for consulting services with a fair value of
$8,750.
v) During the quarter ended July 31, 2003 the Company's Board of Directors
approved a one for ten reverse stock split of common shares that was
effective July 11, 2003. All share amounts have been retroactivelyare adjusted to reflect anticipated behavior specific to the reverse stock split.
b) Deferred Compensation
In connection with the grant of certain stock options to employees during
the year ended January 31, 2004, the Company recorded deferred stock
compensation of $4,660,000, representing the difference between the fair
value of common stock for accounting purposes and the option exercise price
of the respective stock options at the date of grant. The deferred
compensation is presented as a reduction of stockholders' equity and
amortized over the vesting period of stock options on a straight-line
basis. During the year ended January 31, 2004, the Company amortized
$4,394,000 of deferred compensation that has been recorded as stock based
compensation and charged to operations.
c) 2003 Stock Option Plan
Company. | Expected dividend yield | | | 0 | % |
| Risk-free interest rate | | | 1 -5 | % |
| Expected volatility | | | 100 | % |
| Expected life from the vesting date | | | 0.4 - 1 year | |
The Company established the 2003 Restricted Stock Plan ("the
Plan'Plan") during the year
ended January 31, 2004 as well as the 2006 Restricted Stock Plan established during the year ended July 31, 2006, and filed an S-8 Registration Statement with the
U.S. Securities and Exchange Commission that was declared effective. The
planPlan allows the Company's Board of Directors to issue up to
2,000,0001,800,000 common shares
and options for common shares for the 2003 Restricted Stock Plan and 5,000,000 common shares and options for common shares for the 2006 Restricted Stock Plan pursuant to the Plan as compensation for services
rendered to the Company. The Company's Board of Directors has
the discretion to set the price, term vesting schedules and other terms and conditions for options granted under the plan.
A summary of the Company's stock option activity is as follows:
Weighted
average
exercise
Number of price
shares $
---------------------------------------------------------------------------------------------------------------
Balance, January 31, 2003 - -
Options granted 3,285,000 0.25
Options exercised (2,358,000) 0.25
Options cancelled/expired - -
---------------------------------------------------------------------------------------------------------------
Balance, January 31, 2004 927,000 0.25
---------------------------------------------------------------------------------------------------------------
Exercisable at end of year 399,900 0.25
---------------------------------------------------------------------------------------------------------------
F-10
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 6 - STOCKHOLDERS' EQUITY (continued)
c)All 2003 Restricted Stock Option Plan (continued)
Additional information regarding options outstanding as at January 31, 2004
is as follows:
Outstanding Exercisable
-------------------------------------------------- ----------------------------------
Weighted
average Weighted
remaining average Weighted average
Exercise prices Number of contractual exercise price exercise price
$ shares life (years) $ Number of shares $
0.25 927,000 4.5 0.25 399,900 0.25
---------------------------------------------------------------------------------------
The fair value for options granted was estimated at the date of grant using
the Black-Scholes option-pricing model. Under the Black-Scholes
option-pricing model, the weighted average fair value of stock options
granted during the year was $1.43. There was no dilutive impact of
potential commoncommons shares associated with stock options, by application of
the treasury stock method, for the year ended January 31, 2004, as the
Company had a net loss.
NOTE 7 - COMMITMENTS
On October 21, 2003 the Company terminated the licensing agreement with NuAge
Electric Inc. in which the Company acquired 100% of the licensing rights related
to the manufacture and sale of electric vehicles and products using proprietary
technology, subject to a 20% royalty.
On the same date the Company entered into a new Distribution and Licensing
Agreement ("the Agreement") with RV Systems, Inc. ("RV"), a Nevada corporation,
to sell, distribute and/or manufacture specified products and applications of
portable power systems (the "Licensed Technologies"). The Licensed Technologies
were developed by Lithium House, Inc., an affiliate of RV, and has licensed all
product development to RV for products and applications of portable power
systems. The term of the Agreement commenced on October 21, 2003, and continues
for a period of five years and is automatically renewed for three years unless
terminated by either party with a minimum of ninety days written notice. have been issued.
The Company
was required to make license payments to Lithium House as specifiedestablished the 2005 Restricted Stock Plan ("the 2005 Plan") in
the Agreement. The Company made required payments totalling $150,000 as of
October 31, 2003April, 2005 and
was required to pay for specified licensed products
$250,000 no later than December 31, 2003, with a weekly minimum of $15,000. Also
pursuant to the Agreement the Company was required to pay Product Development
Payments of $400,000, on or before December 31, 2003, with a weekly minimum of
$15,000, for two- and three-wheeled vehicles; $200,000 for lawn and garden
equipment, on or before December 31, 2003, with a weekly minimum of $15,000; and
$1,000,000, payable no later than March 31, 2004, with a weekly minimum of
$35,000 for neighbourhood electric vehicles. As reimbursement to the Company,
the Licensor was required to pay proceeds from any sales of product inventory
manufacturedfiled an S-8 Registration Statement with the
financing provided by the Product Development Payments.
On February 3, 2004, the CompanySecurities and
RV agreed to an amendment to the Agreement
requiring minimum weekly payments of $35,000 towards all license payments owing
to date. As a result the Company is not in default of its payment obligations to
RV.
F-11
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 7 - COMMITMENTS (continued)
Annual obligations under the Agreement are as follows:
Year Ended January 31,Exchange Commission that was declared effective. The 2005 1,820,000
2006 1,820,000
2007 1,820,000
2008 1,820,000
2009 1,820,000
---------
9,100,000
=========
Litigation
On October 17, 2003, the Company was served with a complaint filed on October
15, 2003, by Michael McDermott, as a stockholder of Planet Electric, Inc. and
purportedly on behalf of Planet Electric in the United States District Court for
the Central District of California. Lithium House, Inc. was founded by Charles
Haba who was also involved in the founding of Planet Electric, Inc., and was
associated with that company until early 2002. The complaint lists the Company,
Charles Haba, Lithium House, Inc., and other individuals and entities as
defendants. The complaint seeks an injunction prohibiting certain defendants
from continuing their business relationship and transfer of alleged Planet
Electric trade secrets or processes and also seeks damages for patent
infringement against Charles Haba, companies that Mr. Haba has been associated
with since his involvement with Planet Electric, and Whistler Investments, Inc.
The complaint also alleges breach of fiduciary duty against Mr. Haba; breach of
confidential relationship against Mr. Haba; conversion against Mr. Haba and
certain other individual defendants; various business torts against Mr. Haba,
Lithium House, and other individuals and entities and trade secret
misappropriation against all defendants.
The Company believes the claim is without merit and will vigorously defend the
action. The Company believes that this litigation will not impede the
continuation of our activities with Mr. Haba, RV Systems, Inc. and Lithium
House, Inc. under the October 21, 2003 Distribution and Licensing Agreement and
to our commencing to implement and license the technologies covered by that
Agreement worldwide.
Global Electric Motorcars ("GEM") has indicated an intent to file a complaint
against the Company for trademark violation, unfair competition and possibly
patent infringement relating to the content and web domain address of
globalelectric.com owned and operated by Whistler Investments, Inc. Such an
action would seek injunctive relief requesting the discontinuance of the use of
the name Global Electric and for damages. GEM has also objected to the use of
"globalelectric.com" as a domain address. The Company believes the claim is
without merit and will vigorously defend any complaint or action brought against
the Company.
NOTE 8 - ADVANCES PAYABLE
An unrelated company advanced funds to the Company to finance operations, which
are non-interest bearing, unsecured and payable on demand.
F-12
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 9 - DISCONTINUED OPERATIONS
Discontinued operations consist of the Company's activities in the commercial
real estate industry. By an agreement dated April 10, 2002, the Company acquired
a 100% interest in the real property and all buildings and improvements situated
thereon, known as the Azra Shopping Center, located in Las Vegas, Nevada. The
purchase price was $4,150,000 payable as follows: a promissory note to the
vendor in the amount of $600,000; the issuance of 12,000,000 common shares
(split adjusted) at a deemed price of $0.033 per share; the Assumption of a
first mortgage in the amount of $3,150,000. The transaction closed April 15,
2002, with operations transferring effective May 1, 2002. The Company had
purchased the property through a wholly owned subsidiary, Whistler Commercial
Holding, Inc. ("WCHI").
On January 1, 2003 the Company sold all the issued and outstanding shares of
WCHI to an unrelated party for the sum of $100. As part of the Share Purchase
Agreement, the Company agreed to assume debt in the amount of $377,960 owed to a
related party by WCHI.
The results of discontinued operations are summarized as follows:
Year Ended Accumulated from
January 31, 2004 Year Ended April 20, 2000 (Date
January 31, of Inception) to
2003 January 31, 2004
- --------------------------------------------------------------------------------------------------------------------
Revenues $ - $ - $ 286,330
====================================================================================================================
Net Operating Loss - (92,251) (92,251)
Loss on disposal - (664,773) (664,773)
- --------------------------------------------------------------------------------------------------------------------
Loss from discontinued operations $ - $ (757,024) $ (757,024)
====================================================================================================================
NOTE 10 - INCOME TAX
Potential benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted Statement of
Financial Accounting Standards No. 109 ("SFAS 109") as of its inception. The
Company has approximately $535,000 of net operating loss carryforwards to reduce
taxable income of future years. These net operating loss carryfowards commence
expiring in 2015. Pursuant to SFAS 109 the Company is required to compute tax
asset benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.
F-13
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 10 - INCOME TAX (continued)
The components of the net deferred tax asset at January 31, 2004 and 2003, and
the statutory tax rate, the effective tax rate and the elected amount of the
valuation allowance are scheduled below:
2004 2003
$ $
Net Operating Loss 404,000 65,618
Statutory Tax Rate 34% 34%
Effective Tax Rate - -
Deferred Tax Asset 137,360 22,310
Valuation Allowance (137,360) (22,310)
- ------------------------------------- - ----------------- -- -----------------
Net Deferred Tax Asset - -
- ------------------------------------- - ----------------- -- -----------------
NOTE 11 - PRIOR PERIOD ADJUSTMENT
The accompanying financial statements for 2003 have been restated due to
correction of errors relating to the write-off of mineral properties of $5,150
and the recording of donated rent of $6,000. Donated rent has been recorded as
Additional Paid in Capital in the Statement of Stockholders' Equity. The total
amount of $11,150 has been charged to operations in the prior year. The
Company's prior year net loss increased from $814,343 to $825,493. There was no
effect on basic and diluted net loss per share resulting from the restatement.
NOTE 12 - SUBSEQUENT EVENTS
a) Subsequent to year-endPlan allows the Company's Board of Directors approved a three
for one split ofto issue up to 2,000,000 common shares which become effective March 10, 2004.
Stockholderspursuant to the 2005 Plan as compensation for services to the Company. The Company's Board of record were entitledDirectors has the discretion to threeset the price, vesting schedules and other terms and conditions for options granted under the 2005 Plan. All 2005 Restricted Stock Plan common shares have been used.
During the years ended July 31, 2008 and 2007, the Company granted 425,000 and 2,000,000 options, respectively with an option price of common stock for
each share held on that date. All$1.89 and $3.55 per share amountsfor July 31, 2008 and 2007, respectively, to various consultants. During the years ended July 31, 2008 and 2007, 425,000 and 2,000,000 options, respectively, were vested at the fair market value of which was determined under the Black-Scholes formula to be approximately $804,000 and $2,104,000 in July 31, 2008 and 2007 and is included in general and administrative expenses. During the years ended July 31, 2008 and 2007, 200,000 and 1,206,000 options were exercised, respectively valued at $1.96 and $3.55 per share.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
A summary of the Company’s Restricted Stock Plans follows:
| | Number of Shares | |
| Authorized options but ungranted: | | | | |
| Balance July 31, 2006 | | | - | |
| Options authorized (2006 Plan) | | | 5,000,000 | |
| Options granted (2006 Plan) | | | (2,000,000 | ) |
| Options cancelled/expired (2006 Plan) | | | - | |
| Balance July 31, 2007 | | | 3,000,000 | |
| Options authorized (2006 Plan) | | | - | |
| Options granted (2006 Plan) | | | (425,000 | ) |
| Options cancelled/expired (2006 Plan) | | | - | |
| Balance July 31, 2008 (2006 Plan) | | | 2,575,000 | |
| | | Number of shares | | Weighted average exercise price/share | |
| Options granted but unexercised: | | | | | | | |
| Balance July 31, 2006 | | | 14,500 | | $ | 6.40 | |
| Options cancelled during the year ended July 31, 2007 (2005 Plan) | | | (14,500 | ) | $ | 6.40 | |
| Options granted during the year ended July 31, 2007 (2006 Plan) | | | 2,000,000 | | $ | 3.55 | |
| Options exercised during the year ended July 31, 2007 (2006 Plan) | | | (1,206,000 | ) | $ | 3.55 | |
| Balance July 31, 2007 | | | 794,000 | | $ | 3.55 | |
| Options cancelled during the year ended July 31, 2008 (2006 Plan) | | | - | | | | |
| Options granted during the year ended July 31, 2008 (2006 Plan) | | | 425,000 | | $ | 2.00 | |
| Options exercised during the year ended July 31, 2008 (2006 Plan) | | | (200,000 | ) | $ | 3.55 | |
| Unexercised options at July 31, 2008 | | | 1,019,000 | | $ | 2.90 | |
During the years ended July 31, 2008 and 2007, total cash and related advances relieved in return for the exercise of options under the plan amounted to approximately $400,000 and $4,300,000, respectively.
| Range of | | Options Outstanding | | Weighted | | Options Exercisable | | Weighted | |
| Exercisable | | Outstanding at | | Average | | Exercisable at | | Average | |
| Prices | | July 31, 2008 | | Exercise Price | | July 31, 2008 | | Exercise Price | |
| $2.00 - $3.55 | | | 1,019,000 | | $ | 2.90 | | | 1,019,000 | | $ | 2.90 | |
The weighted average remaining contractual life of options outstanding at July 31, 2008 was approximately five years.
The aggregated intrinsic value of options outstanding and exercisable at July 31, 2008, was de minimus. The aggregate intrinsic value represents the total pre-tax value (the difference between the Company’s closing stock price on the last trading day of July 31, 2008 and the exercise price, multiplied by the number of in-the money options) that would have been received by the option holders had all option holders exercised their options on July 31, 2008. The amount of aggregate intrinsic value will change based on the fair-market value of the Company’s common stock.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Note 9. Segment information
FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by management. The Company is organized by line of business and geographical area. The Company has two businesses, telecommunication services and the development and sale of electric powered vehicles.
The following is financial information relating to the Company’s business segments from continuing operations:
| | | YEAR ENDED JULY 31, | |
| | | 2008 | | 2007 | |
| | | | | | | | |
| Revenues from external customers: | | | | | | | |
| Telecommunication services | | | | | | | |
| United States | | $ | - | | $ | - | |
| India | | | - | | | - | |
| Canada | | | - | | | - | |
| Electric powered vehicle sales | | | | | | | |
| United States | | | 199,801 | | | 48,750 | |
| Hong Kong | | | - | | | - | |
| India | | | - | | | - | |
| Total revenues from continuing operations | | $ | 199,801 | | $ | 48,750 | |
| | | | | | | | |
| Loss from continuing operations: | | | | | | | |
| Telecommunication services | | | | | | | |
| United States | | $ | - | | $ | - | |
| India | | | - | | | - | |
| Canada | | | - | | | - | |
| Electric powered vehicle sales | | | | | | | |
| United States | | | (5,787,742 | ) | | (9,468,312 | ) |
| Hong Kong | | | (2,119 | ) | | (32 | ) |
| India | | | (78,411 | ) | | - | |
| Total loss from continuing operations | | $ | (5,868,272 | ) | $ | (9,468,344 | ) |
| | | | - | | | | |
| Long-lived assets: | | | | | | | |
| Telecommunication services | | | | | | | |
| United States | | $ | - | | $ | - | |
| India | | | - | | | - | |
| Canada | | | - | | | - | |
| Electric powered vehicle sales | | | | | | | |
| United States | | | 71,503 | | | 51,600 | |
| Hong Kong | | | - | | | - | |
| India | | | - | | | | |
| Total long-lived assets | | $ | 71,503 | | $ | 51,600 | |
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
| | | YEAR ENDED JULY 31, | |
| | | 2008 | | 2007 | |
| Capital expenditures: | | | | | | | |
| Telecommunication services | | | | | | | |
| United States | | $ | - | | $ | 6,365 | |
| India | | | 7,985 | | | 34,510 | |
| Canada | | | - | | | - | |
| Electric powered vehicle sales | | | | | | | |
| United States | | | 93,970 | | | 118,327 | |
| Hong Kong | | | - | | | - | |
| India | | | 4,795 | | | - | |
| Total capital expenditures | | $ | 106,750 | | $ | 159,202 | |
| | | | | | | | |
| Depreciation and amortization: | | | | | | | |
| Telecommunication services | | | | | | | |
| United States | | $ | 16,532 | | $ | 41,495 | |
| India | | | 10,276 | | | 3,495 | |
| Canada | | | - | | | - | |
| Electric powered vehicle sales | | | | | | | |
| United States | | | 76,013 | | | 85,486 | |
| Hong Kong | | | - | | | - | |
| India | | | 586 | | | - | |
| Total depreciation and amortization | | $ | 103,407 | | $ | 130,476 | |
Note 10. Contingencies
Hybrid Electric Vehicles India Pvt. Ltd. entered into an 11 month lease agreement. It is expected that in the financial
statements have been retroactively adjustednormal course of business the lease will be continued or replaced by a similar arrangements.
Future minimum payments under this lease are approximately $950. Total rent expense for the year ended July 31, 2008 and 2007, amounted to reflectapproximately $3,455 and $0, respectively.
Effective April 16, 2008, SPI agreed to lease approximately 5,000 square feet of space in the Company’s North Carolina facility. The leased space will be suitable for, and utilized by SPI for, SPI’s developmental and manufacturing operations for licensed products pursuant to the license agreement. The leased space is leased on a month-to-month basis at a monthly rental of $2,500, the monthly rental to be escalated five (5%) percent annually. Although the lease was signed, the space is only 80% completed as of October 12, 2008. Also, effective April 16, 2008, the Company sold specified equipment and supplies related to the licensed agreement to SPI for the purchase price of $29,005.
Total rent income for the year ended July 31, 2008 and 2007 amounted to approximately $6,500 and $0, respectively.
Legal proceedings
Other than as described below, the Company is not a party to any material legal proceedings and to the Company's knowledge; no such proceedings are threatened or contemplated. At this time the Company has no bankruptcy, receivership or similar proceedings pending.
On June 3, 2008, the Company was notified of a case filed on June 2, 2008, by Peter Strojnik, Attorney at Law, in the Federal Court for the District of Arizona (Peter Strojnik, P.C. v. The Energy Bull et al.). On June 24, 2008, the plaintiff amended the complaint to include the Company as a defendant. The complaint seeks damages against The Energy Bull and other defendants based on transmission of unsolicited facsimiles illegally promoting the stock split.
b) On February 24, 2004,of the Company received oneto the plaintiff and members of the class that the plaintiff purports to represent. The lawsuit seeks damages estimated in the complaint to be between $333 million dollars of a three
million dollar financing from Sterling Capital, Inc.and $3 billion, as well as injunctive relief for the developmentalleged sending of specific productsunsolicited faxes. The Company denies these allegations and has filed a motion to dismiss to exclude the Company from the lawsuit. The Company disclaims, and has continually disclaimed on its web site and its communications with the investing public, all responsibility for various customers.authorizing in any manner unsolicited facsimiles issued by The amount received isRaging Bull or other parties that seek to promote the Company’s stock.
HYBRID TECHNOLOGIES, INC.
A Development Stage Company
Notes to Consolidated Financial Statements
Letter of credit
The Company, through its subsidiary, purchased a letter of credit in the
formamount of
$40,000 from a
non-recourse loan collateralized byfinancial institution to guarantee certain creditor payments. The financial institution required the
Company's common shares.
F-14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
ITEM 8A.Company to maintain deposits totaling $40,000 to be kept on deposit as collateral for the letter of credit and related fees. This restricted was included in other assets as of July 31, 2007. In connection with the sale of the subsidiary in 2008, the obligation for the letter of credit and the restricted cash are transferred to the purchaser.
Note 11. Income taxes
The Company adapted the provisions of FASB Interpretation No 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), on August 1, 2007. The implementation of FIN 48 did not impact the total amount of the Company’s liabilities for uncertain tax position.
The Company recorded no provisions for income taxes for the years ended July 31, 2008 and 2007.
A reconciliation of taxes on income computed at federal statuary rate to the amount provided is as follows:
| | | July 31, | |
| | | 2008 | | 2007 | |
| Tax provision computed at federal statuary rate of 35% continuing operations | | $ | (2,122,694 | ) | $ | (3,453,410 | ) |
| | | | | | | | |
| Increase (decrease) in taxes resulting from: unused operating losses | | | 2,122,694 | | | 3,453,410 | |
| | | $ | - | | $ | - | |
Components of deferred income tax assets are as follows:
| | | July 31, | |
| | | 2008 | | 2007 | |
| | | Tax effect | | Tax effect | |
| Deferred tax assets - current: | | | | | | | |
| | | | | | | | |
| United States net operating loss | | $ | 18,182,000 | | $ | 17,000,000 | |
| | | | | | | | |
| Valuation allowances | | | (18,182,000 | ) | | (17,000,000 | ) |
| | | $ | - | | $ | - | |
The net operating loss carry forward as of July 31, 2008 is approximately $51.2 million and will expire in years through 2023.
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A (T). Controls and Procedures
Within the 90 days prior to the filing dateProcedures.
As supervised by our board of this Form 10-KSB, the
Company carried out an evaluation, under the supervisiondirectors and with the
participationour principal executive and principal financial officers, management has established a system of the Company's management, including the Company's Chief
Executive Officer and Chief Financial and Accounting Officer, of the
effectiveness of the design and operation of the Company's disclosure controls and procedures and has evaluated the effectiveness of that system. The system and its evaluation are reported on in the below Management's Annual Report on Internal Control over Financial Reporting. Our principal executive and financial officer has concluded that our disclosure controls and procedures (as defined in the 1934 Securities Exchange Act Rule 13a-15(e)) as of July 31, 2008, are effective, based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15.
Management's Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-1413a-15(f) of the Securities Exchange Act of 1934.
Based upon1934 (the "Exchange Act"). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Management assessed the effectiveness of internal control over financial reporting as of July 31, 2008. We carried out this assessment using the criteria of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm, pursuant to temporary rules of the Securities and Exchange Commission that evaluation, the Chief Executive Officer and Principal Financial
and Accounting Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting thempermit us to material information
relating to the Company (including its consolidated subsidiaries) required to be
includedprovide only management's report in this Annual Report on Form 10-KSB. annual report. Management concluded in this assessment that as of July 31, 2008, our internal control over financial reporting is effective.
There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Company'sExchange Act) during the fourth quarter of our 2008 fiscal year that have materially affected, or are reasonably likely to materially affect, our internal controls or in other factors which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.
control over financial reporting.
Item 9B. Other Information.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
Item 10. Directors, Executive Officers, and Corporate Governance.
Our executive officers and directors and their respective ages as of May 1, 2003October , 2008 are as follows:
Name Age Office
- -------------------- ----- ------
Holly Roseberry 51
| Name | | Age | | Position |
| | | | |
| Holly A. Roseberry | | 56 | | Chief Executive Officer, President Chief Executive
Officer and Director
Mehboob Charania 48 Secretary, Treasurer, Chief
Financial Officer and Director |
| | | | |
| Mehboob Charania | | 52 | | Director, Treasurer and Secretary |
| | | | |
| Brian Newman | | 57 | | Director |
| | | | |
| Greg Navone | | 61 | | Director |
Our Board of Directors now consists of four directors. The following describesinformation with respect to the principal occupation or employment of each officer and director, the principal business of the corporation or other organization in which such occupation or employment is carried on, and such person's business experience of our directorsduring the past five years, has been furnished to the Company by the respective officers and executive
officers, including other directorships held in reporting companies:
Ms. Holly Roseberrydirector:
HOLLY A. ROSEBERRY was appointed as our secretary, treasurer and chief financial officer on February 20, 2002. On November 15, 2002, she resigned from these positions and was appointed as our president, chief executive officer and as a director. From 2001 to the present,2003, she has acted as manager for 24/7
Drycleaning Laundromat, a private Las Vegas business.the Azra Shopping Center. She obtained a Bachelor of Arts degree from Sacred Heart University in Bridgeport, Connecticut in 1973. Ms. Roseberry was employed from 1993 to 1996 as human resources manager, and from 1997 to 1999 as business office manager, of the Las Vegas location of Wards Department Store. Ms. Roseberry was not employed from 1999-2001.
Mr. Mehboob Charaniahas held the positions of President, Chief Executive Officer and a Director of our majority-owned subsidiary, Zingo, Inc. August 30, 2005 to June 4, 2008.
MEHBOOB CHARANIA has acted as our secretary
and treasurer, and
chief financial
officerhas been a director, since November 15, 2002. Since June 2001, Mr. Charania has been the owner and operator of Infusion Bistro, a restaurant located in Calgary, Alberta. From 1998 to 2001, he acted as a manager at IBM's Calgary office.
Mr. Charania has held the position of Secretary and a Director of our former majority-owned subsidiary, Zingo, Inc. (now Superlattice Power, Inc.) since August 30, 2005.
BRIAN NEWMAN, age 55, graduated with a Bachelor of Commerce degree from the University of Calgary in 1978, and received a degree as a Chartered Accountant from the Institute of Chartered Accountants in Alberta in 1982. He has been a director and President of Brian Newman Professional Corporation, a public accounting firm located in Calgary, Alberta for the past 25 years. Mr. Newman has served since September 2004 to the present as a director of Olympia Financial Group, and since September 2004 to the present has also served as a director of Albury Resources Ltd. Both of these companies are publicly traded in Canada, but neither is a reporting company under the Securities Exchange Act of 1934.
GREGORY NAVONE, age 59, graduated from St. Mary’s College in Morgan, California, in 1968, with a Bachelor of Arts degree. For the past two years, Mr. Navone has been the owner and President of First Interstate Mortgage, a mortgage banking firm. Since 1987, Mr. Navone has been the owner and President of First Capital Financial. Both these firms are located in Las Vegas, Nevada. Mr. Navone was appointed a director of the Company shortly following its incorporation in April 2000, and served as a director until February, 2002. He returned to our Board of Directors in May 2005.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Committees
We do not have an audit committee, although we intend to establish such a
committee, with Brian Newman, an independent "financial"audit committee financial expert" member as defined in the rules of the Securities and Exchange Commission.
Commission, as sole member.
Corporate Code of Conduct
We are reviewing a proposed corporate code of conduct, which would provide for internal procedures concerning the reporting and disclosure of corporate matters that are material to our business and to our stockholders. The corporate code of conduct would include a code of ethics for our officers and employees as to workplace conduct, dealings with customers, compliance with laws, improper payments, conflicts of interest, insider trading, company confidential information, and behavior with honesty and integrity.
Significant Employees
We have no significant employees other than the officers and directors described above.
Salim R. Rana, although not a director, officer or employee of the Company, has
worked extensively with our management and Lithium House on developing and
commercializing our electric powered vehicles and products, as well on our
negotiations with potential joint venture partners.
Section 16(A) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Exchange Act requires the
Company'sCompany’s executive officers and directors, and persons who beneficially own more than ten percent of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based on its review of the copies of such forms received by it, the Company believes that during the fiscal year ended
JanuaryJuly 31,
20032008 all such filing requirements applicable to its officers and directors were complied
with exception that
reports were filed late by the following persons:
Number Transactions Known Failures
Of late Not Timely To File a
Name and principal position Reports Reported Required Form
- --------------------------- ----------- ------------ --------------
Holly Roseberry 3 3 0
President, C.E.O., and Director
Mehboob Charania 0 0 0
Secretary, Treasurer and C.F.O.
Salim S. Rana Investments Corp. 33 33
10% Stockholder
- -----------------------------------------------------------------------------
ITEM 10. EXECUTIVE COMPENSATION
with.
Item 11. Executive Compensation.
The following table sets forth certain information as to the Company's highest paid executive officers and directors for the Company's fiscal yearyears ended JanuaryJuly 31, 2004.2008 and 2007. No other compensation was paid to any such officer or directorsdirector other than the cash and stock option compensation set forth below.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------- ----------------------------
AWARDS PAYOUTS
--------------------------------------
Other Securities All
Annual Underlying Other
Salary Compen- Restricted Options/ LTIP Compen-
Name Title Year Bonus sation Stock Awarded SARs payouts sation
- --------------------------------------------------------------------------------------
Holly President 2003 0 0 0 0 0 0
Roseberry CEO and 2004 $6,225 45,000*
Director
- --------------------------------------------------------------------------------------
Stacey Former 2003 0 $11,500 0 0 0 0
Fling President
CEO, &
Director
- --------------------------------------------------------------------------------------
- -----------------
Name and Principal Position** | | Year * | | Salary ($) | | Bonus ($) | | Stock Awards ($) | | Option Awards ($) | �� | Non-Equity Incentive Plan Compensation ($) | | Change in Pension Value and Nonquali- fied Deferred Compensation Earnings ($) | | All Other Compen- Sation | | Total ($) | |
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | |
| Holly | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Roseberry | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| President | | | 2007 | | $ | 60,500 | | | | | | | | | | | | | | | | | | | | $ | 60,500 | |
| | | | 2008 | | $ | 64,720 | | | | | | | | | | | | | | | | | | | | $ | 64,720 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Mehboob | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Charania, | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Director | | | 2007 | | $ | 1,827 | | | | | | | | | | | | | | | | | | | | $ | 1,827 | |
* The numberYears ended July 31, 2008 and July 31, 2007.
** Holly Roseberry has held the office of
shares reflectsPresident since November 15, 2002. Ms. Roseberry's functions as President have included, in addition to accounting and regulatory filing oversight, management and the
three-for-one forward splitsale of the Azra shopping center, general management of our
common
stock effective March 10, 2004
day-to-day operations, working with the attorneys and accountants for the Company, general oversight of the agreements with and oversight of consultants to the Company and correspondence with the Company's transfer agent. Ms. Roseberry, as President and Chief Executive Officer, received management fees of $1,100 per week through December 31, 2006 and $1,210 per week thereafter in our 2007 fiscal year. Her compensation for 2007 included $12,000 of directors fees paid by one of our subsidiaries, which fees are not reflected in the above table.
Option/SAR Grants in Last Fiscal Year
Individual Grants
(a) (b) (c) (d) (e)
Number of % of
Securities Total
Under- Options/
Lying SAR's
Options/ Granted to Exercise
SAR's Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date
- ------------- ------------ ----------- --------- ----------
Holly Roseberry 45,000* 100% $.25 7/18/08
* The number
There were no grant of shares reflects the three-for-one forward split ofoptions to purchase our common stock effective March 10, 2004
EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES
FISCAL YEAR-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Option/
Options/SARS At SARs at Fiscal
Fiscal Year-End (#) Year-End ($)
Exercisable/ Exercisable/
Shares Acquired on Unexercisable Unexercisable
Name Exercise (#) Value Realized ($)
- ------------------------- ---------------------- --------------------- ------------------------ ----------------------
Holly Roseberry 45,000* NA NA
* The numberto our officers or directors in fiscal 2008, and there were no exercises of shares reflectssuch options during or options held at the three-for-one forward splitend of such fiscal year by officers or directors.
Directors’ Compensation
Commencing June 1, 2006, we have paid Brian Newman, Gregory Navone and Shaffiq Kotadia directors’ fees of $1,000 per month. Ms. Roseberry is compensated as Chief Executive Officer, and receives no additional directors fees from the Company for acting as a director. In our
common
stock effective March 10, 2004
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
fiscal year ended July 31, 2007, Ms. Roseberry received $12,000 in directors fees from Zingo, Inc. (now Superlattice Power, Inc.), a former majority-owned subsidiary.
DIRECTOR COMPENSATION
| Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) | |
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | |
| Mehboob Charania | | | 32,144 | | | | | | | | | | | | | | | | | | 39,750 | |
| Brian Newman | | | 12,000 | | | | | | | | | | | | | | | | | | 12,000 | |
| Gregory Navone | | | 12,000 | | | | | | | | | | | | | | | | | | 12,000 | |
| Shaffiq Kotadia* | | | 2,581 | | | | | | | | | | | | | | | | | | 2,581 | |
*Shaffiq Kotadia resigned as a director on October 19, 2007.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of
April 23, 2004September 11, 2008 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors, and (iii)officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
All share information in the following table reflects the three for one forward
split of out common stock effective March 10, 2004.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock
(1)
- ------------- ------------------- ---------------- -----------
Common Stock Salim S. Rana Investments Corp. 8,473,995 42.19%
5001 E. Bonanza Rd., Suite 144-145
Las Vegas, Nevada 89110
Common Stock Holly Roseberry 45,000 *
President, CEO, Director
5001 E. Bonanza Rd., Suite 144-145
Las Vegas, Nevada 89019
Common Stock All Officers and Directors 45,000 *
as a Group that consists of
two people
- -------------------------
| | | Name and address | | Number of Shares | | Percentage of | |
| Title of class | | of beneficial owner | | of Common Stock | | Common Stock (1) | |
| Common Stock | | Holly Roseberry | | | | | | | |
| | | President, CEO, Director | | | | | | | |
| | | 4894 Lone Mountain Rd. #168 | | | | | | | |
| | | Las Vegas, Nevada 89130 | | | 555 | | | | * |
| | | | | | | | | | |
| | | All Officers and Directors | | | | | | | |
| | | Directors as a Group that | | | | | | | |
| | | Consists of four persons | | | 555 | | | | * |
| | | | | | | | | | |
| | | Crystal Capital Ventures Inc. | | | | | | | |
| | | 1274 Sundial Ave. Coral Grove | | | | | | | |
| | | PO Box 2135 | | | | | | | |
| | | Belize City, Belize | | | 7,500,000 | (2) | | | % |
| | | | | | | | | | |
| | | Wyndom Capital Investments | | | | | | 42.83 | % |
| | | 35 New Road #2112 | | | | | | | |
| | | Belize City, Belize | | | 10,000,000 | (3) | | | |
* Less than 1%
(1) As of April 23, 2004, there were 20,083,683 shares of our common stock
issued and outstanding.
| (1) | As of September 11, 2008, there were 23,347,257 shares of our common stock issued and outstanding. |
| (2) | Held as collateral pursuant to Loan Agreement with the Company dated May 5, 2008. |
| (3) | Held as collateral pursuant to Loan Agreement with the Company dated October 29, 2007. |
CHANGE IN CONTROL
We are not aware of any arrangement that might result in a change in control in the future.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By an agreement dated May 1, 2000, we previously paid $500 per month in
consideration of office rent to Dewey Jones, our former president
Item 13. Certain Relationships and director.
On February 20, 2002, our president, Stacey Fling purchased 3,800,000 shares of
common stock from our former president, Dewey Jones, for $3,800. On January 28,
2003, Ms. Fling purchased 50,000 shares of common stock from Joyce Messer in a
private transaction. The aggregate price for the shares was $2,500.
AcquisitionRelated Transactions, and Disposition of Azra Shopping Center
By an agreement dated April 10, 2002, we acquired from Salim S. Rana
Investments Corp., a private Nevada company, a 100% interest in the real
property and all buildings and improvements situated thereon, known as the Azra
Shopping center, located in Las Vegas, Nevada. The purchase price was $4,150,000
and was paid as follows:
1. We issued 40,000,000 shares of common stock for $0.01 per share;
2. We assumed a first mortgage on the Azra Shopping Center for $3,150,000;
and
3. We issued a promissory note for $600,000 to Salim S. Rana Investments,
Corp.
We completed the acquisition through our wholly-owned subsidiary,
Whistler Commercial Holding, Inc., on April 15, 2002, with operations
transferring effective May 1, 2002.
On January 1, 2003, we sold 100% of the issued and outstanding
capital of Whistler Commercial Holding, Inc. to an unrelated party for $100. As
part of the agreement, we agreed to assume debt in the amount of $377,960 that
Whistler Commercial Holding, Inc. owed to Salim S. Rana Investments Corp., our
majority stockholder. We incurred a loss of $757,024 during the fiscal year from
these discontinued operations.
DuringDirector Independence.
In our fiscal year ended JanuaryJuly 31, 2004, Salim S. Rana Investments
Corp. advanced approximately $175,000 additionally to2007, Ms. Roseberry received $12,000 in directors fees from Zingo, Inc., our former majority-owned telecommunications subsidiary. In fiscal year ended July 31, 2008, Ms. Roseberry received $11,000 in consulting fees from Zingo, Inc. (now Superlattice Power, Inc.) as she worked with their new officers throughout the Company. We havechangeover period following the sale of the Company’s controlling stock interest in Zingo, Inc. She is no longer receiving any compensation from Superlattice.
The Company received advances from Greg Navone (a Director of the Company) for the years ended July 31, 2008 and 2007 in amounts of $115,000 and $5,000, respectively, and repaid
this debt$120,000 and
all subsequent advances$-0-, respectively. As of July 31, 2008 and 2007, the amount due by
this stockholder as of February
25, 2004.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index.the Company was $0 and $5,000, respectively. Item 14. Principal Accountant Fees and Services.
| (1) | Aggregate fees for the last two years: | 2008-$30,000 | 2007-$20,000 |
| | | |
| (2) | Audit related fees: | 2008- NA | 2006- NA |
| | | |
| (3) | Tax fees: | 2008- NA | 2006- NA |
| | | |
| (4) | All other fees. | NA | |
| | | |
| (5) | Audit committee pre-approval processes, percentages of services approved by audit committee, percentage of hours spent on audit engagement by persons other than principal accountant's full time employees. NA |
Item 15. Exhibits - --------
and Financial Statement Schedules.
- -------------------- -----------------------------------------------------------------------------------------------------
| Exhibit No. | | Description
- -------------------- -----------------------------------------------------------------------------------------------------
|
| | |
| 3.1 | | Articles of Incorporation of the Company. (Incorporated(Incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form SB-2, filed with the Commission on May 29, 2001.) |
| | |
| 3.1a | | Certificate of Amendment to Articles of Incorporation filed October 27, 2004. (Incorporated by reference to Exhibit 3.1a to the Company’s Current Report on Form 8-K, filed with the Commission on November 2, 2004.) |
| | |
| 3.1b | | Form of Restatement of Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1a to the Company’s Quarterly Report on Form 10-QSB, filed with the Commission on December 15, 2004.) |
| | |
| 3.1c | | Certificate of Amendment to Articles of Incorporation, filed effective March 9, 2005. (Incorporated by reference to Exhibit 3.1c to the Company’s Annual Report on Form 10-KSB, filed with the Commission on May 23, 2005.) |
| | |
| 3.1d | | Certificate of Change, filed effective January 17, 2008. (Incorporated by reference to Exhibit 3.1d to the Company’s Current Report on Form 8-K, filed with the Commission on January 16, 2008.) |
| | |
| 3.1e | | Certificate of Amendment to Articles of Incorporation, filed effective December 24, 2007, filed herewith. |
| | |
| 3.2 | | By-Laws of the Company. (Incorporated herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form SB-2 filed with the Commission on May 29, 2001).
2001.) |
| | |
| 4.1 | | Specimen Common Stock Certificate. (Incorporated herein by reference to Exhibit 44.1 to the Company's Registration
StatementCompany’s Annual Report on Form SB-210-KSB, filed with the Commission on May 29,
2001.November 8, 2006.) |
| | |
| 4.2 | | Whistler Investments, Inc. 2003 Restricted Stock Plan. (Incorporated herein by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 filed with the Commission on July 18, 2003.) |
| | |
| 4.3 | | Hybrid Technologies, Inc. 2005 Restricted Stock Plan. (Incorporated herein by reference to Exhibit 4. to the Company's Registration Statement on Form S-8 filed with the Commission on April 22, 2005.) 4.4 Promissory Note, dated December 3, 2004, payable to Trade Winds Telecom, LLC. (Incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on May 23, 2005.) |
| | |
| 10.1 | | Mineral Claim dated October 2, 2000. (Incorporated(Incorporated herein by reference to Exhibit 10.1 to the Company's Registration Statement on Form SB-2 filed with the Commission on May 29, 2001.) |
| | |
| 10.2 | | Mineral Property Staking and Sales agreement, dated September 19, 2000, between Mr. Edward McCrossan and the Company. (Incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form SB-2 filed with the Commission on May 29, 2001.) |
| 10.3 | | Office Services Agreement, dated May 1, 2000, between the Company and Dewey Jones. (Incorporated herein by reference to Exhibit 10.3 to the Company's Registration Statement on Form SB-2 filed with the Commission on May 29, 2001.) |
| | |
| 10.4 | | Asset Purchase Agreement dated April 10, 2002 between Salim S. Rana Investments Corp. and Whistler Investments, Inc. (Incorporated by reference to Exhibit No. 10.1 to the Company's Annual Report on Form 10-KSB, filed with the Commission on May 6, 2002.) |
| | |
| 10.5 | | Agreement dated January 1, 2003 between Whistler Investments, Inc. and Kim Larsen respecting the disposition of Azra Shopping Center. (Incorporated by reference to Exhibit 10.1 to the Company's Amendment No. 1 to the Company'sits Annual Report on Form 10-KSB filed May 8, 2003.) |
| | |
| 10.6 | | Amendment to Licensing Agreement, dated October 21, 2003, between Nu Age Electric Inc. and Whistler Investments, Inc. (Incorporated herein by reference to Exhibit No. 10.3 to the Company's Current Report on Form 8-K, filed with the Commission on November 21, 2003.) |
| | |
| 10.7 | | Agreement,dated October 21, 2003,21,2003, by and between RV Systems, Inc. and Whistler Investments, Inc. (Incorporated herein by reference to Exhibit No. 10.4 to the Company's Current Report on Form 8-K, filed with the Commission on November 21, 2003.) |
| | |
| 10.8 | | Investment Agreement, dated as of January 19, 2004, by and between Whistler Investments, Inc. and Dutchess Private Equities Fund, L.P. (Incorporated by reference to Exhibit No. 10.5 to the Company's Current Report on Form 8-K, filed with the Commission on January 23, 2004.) |
| | |
| 10.9 | | Registration Rights Agreement,dated as of January 19, 2004, by and between Whistler Investments, Inc. and Dutchess Private Equities Fund, L.P. (Incorporated by reference to Exhibit No. 10.6 to the Company's Current Report on Form 8-K, filed with the Commission on January 23, 2004.)
31.1 |
| | |
| 10.10 | | Stock Redemption and Reissuance Agreement, dated as of February 10, 2004, Between Whistler Investments, Inc. and Salim S. Rana Investments, Inc. (Incorporated by reference to Exhibit 10.10 to Amendment No. 1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 4, 2004.) |
| | |
| 10.11 | | Letter from City of Austin, Texas, dated February 27, 2004. (Incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 4, 2004.) |
| | |
| 10.12 | | Memorandum of Understanding, dated March 15, 2004, between Shanghai Geely Metop International and the Global Electric subsidiary of Whistler Investments, Inc. (Incorporated by reference to Exhibit 10.12 to Amendment No. 1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 4, 2004.) |
| 10.13 | | Loan Agreement, made as of the 20th day of February, 2004, among Sterling Capital Inc. and Whistler Investments, Inc. (Incorporated by reference to Exhibit 10.13 to Amendment No. 1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 4, 2004.) |
| | |
| 10.14 | | Letter Agreement, dated February 3, 2004, between Whistler Investments, Inc. and RV Systems, Inc. (Incorporated by reference to Exhibit 10.14 to Amendment No. 1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 4, 2004.) |
| | |
| 10.15 | | Purchase and Sale Agreement, made effective as of the 3rd day of December, 2004, between WhistlerTel, Inc. and Trade Winds Telecom, LLC. (Incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K, filed with the Commission on December 8, 2004.) |
| | |
| 10.16 | | Bill of Sale and Assignment, dated as of December 3, 2004, between Trade Winds Telecom LLC and Whistlertel, Inc. (Incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K, filed with the Commission on December 8, 2004.) |
| | |
| 10.17 | | Agreement and Plan of Reorganization, dated as of August 18, 2005, among the Company, Whistlertel, Inc. and Javakingcoffee, Inc. (Incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K, filed with the Commission on August 24, 2005.) |
| | |
| 10.18 | | Notice, dated July 2, 2005, from Hybrid Technologies, Inc. To RV Systems, Inc. (Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on October 26, 2005.) |
| 10.19 | | Nonreimbursable Space Act Agreement between National Aeronautics and Space Administration, John F. Kennedy Space Center and Hybrid Technologies, Inc. (Incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-QSB, filed with the Commission on March 17, 2006. |
| | |
| 10.20 | | Agreement dated March 30, 2006 between Paratransit, Inc. and the Company. (Incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on November 8, 2006.) |
| | |
| 10.21 | | Request for Pilot Approval, submitted May 31, 2006, to New York City Taxi and Limousine Commission by the Company. (Incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on November 8, 2006.) |
| 10.22 | | Consulting Agreement, dated March 26, 2007, between Hybrid Technologies, Inc. and Griffen Trading Company. (Incorporated by reference to Exhibit 10.22 to the Company’s Quarterly Report on Form 10-QSB, filed with the Commission on June 19, 2007.) |
| | |
| 10.23 | | Loan Agreement, dated as of October 29, 2007, between Wyndom Capital Investments, Inc. and the Company. (Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on November 13, 2007.) |
| | |
| 10.24 | | Form of Note issuable pursuant to the Loan Agreement, dated October 29, 2007, between Wyndom Capital Investments, Inc. and the Company, filed herewith. (Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on November 13, 2007.) |
| | |
| 10.25 | | Stock Purchase Agreement, dated as of April 15, 2008, between the Company and Blue Diamond Investments, Inc. (Incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form 8-K, filed with the Commission on April 21, 2008.) |
| | |
| 10.26 | | License Agreement, dated April 15, 2008, between the Company and Zingo, Inc. (now Superlattice Power, Inc.). (Incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form 8-K, filed with the Commission on April 21, 2008.) |
| | |
| 10.27 | | Loan Agreement, dated as of May 5, 2008, between Crystal Capital Ventures Inc. and the Company. (Incorporated by reference to Exhibit 10.27 to the Company’s Current Report on Form 8-K, filed with the Commission on June 6, 2008.) |
| | |
| 10.28 | | Form of Note issuable pursuant to the Loan Agreement, dated May 5, 2008, between Crystal Capital Ventures Inc. and the Company. (Incorporated by reference to Exhibit 10.28 to the Company’s Current Report on Form 8-K, filed with the Commission on June 6, 2008.) |
| | |
| 23 | | Consent of Independent Registered Public Accounting Firm, filed herewith. |
| | |
| 31 | | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith.
31.2 Certification of Chiefand Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1 |
| | |
| 32 | | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2 Certification of Chiefand Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
(b) Reports on Form 8-K: The Company filed a Current Report on Form 8-K, on
January 23, 2004, during the fiscal quarter ended January 31, 2004.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(1) Aggregate fees for the last two years: 2003-$5,849 2004-$16,450
(2) Audit related fees: 2003-$5,849 2004-$16,450
(3) Tax fees: 2002- NA 2003- NA
(4) All other fees. NA
(5) Audit committee pre-approval processes, percentages of services
approved by audit committee, percentage of hours spent on audit engagement by
persons other than principal accountant's full time employees. NA
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WHISTLER INVESTMENTS,
EV INNOVATIONS, INC.
By: /s/ Holly Roseberry
---------------------------------
Holly Roseberry
President and Chief Executive Officer
Director
Date: April 29, 2004
| By: | /s/ Holly Roseberry |
| Holly Roseberry |
| Chief Executive Officer and Principal Financial Officer |
| |
| Date: April 16, 2008 |
In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Holly Roseberry
-------------------
Holly Roseberry
President and C.E.O.
(Principal Executive Officer)
Director
Date: April 29, 2004
By: /s/ Mehboob Charania
--------------------
Mehboob Charania
Secretary, Treasurer & C.F.O.
(Principal Financial Officer)
Director
Date: April 29, 2004
| By: | /s/ Holly Roseberry |
| Holly Roseberry |
| President and C.E.O. |
| (President, Chief Executive Officer |
| Principal Financial Officer and Director) |
| |
| |
| By: | /s/ Brian Newman |
| Brian Newman |
| (Director) |
| |
| |
| By: | |
| Gregory Navone |
| (Director) |
| |
EXHIBIT INDEX
31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 31.1
CERTIFICATION
I, Holly Roseberry, certify that:
1. I have reviewed this annual report on Form 10-KSB of Whistler
Investments, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's intternal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting;
April 29, 2004 By: /s/ Holly Roseberry
-------------------
Holly Roseberry
President and C.E.O.
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, Mehboob Charania, certify that:
1. I have reviewed this annual report on Form 10-KSB of Whistler
Investments, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's intternal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting;
Date: April 29, 2004 /s/Mehboob Charania
------------------------------
Mehboob Charania
Secretary, Treasurer and C.F.O.
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Whistler Investments, Inc. (the
"Company") on Form 10-KSB for the year ended January 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Holly
Roseberry, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Holly Roseberry
---------------------
Holly Roseberry
Chief Executive Officer
April 29, 2004
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Whistler Investments, Inc. (the
"Company") on Form 10-KSB for the year ended January 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Mehboob
Charania, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/Mehboob Charania
---------------------
Mehboob Charania
Chief Financial Officer
April 29, 2004
| 31 | Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. |
| |
| 32 | Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |