U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K/A


x
            Annual
      Report Pursuant To Section 13 Or 15(d) Of The SecuritiesExchange
      Act Of 1934





For the
fiscal year ended July
31, 2008





 ̈
            Transition
      Report Under Section 13 Or 15(d) Of The Securities ExchangeAct
      Of 1934





For the
transition period from





COMMISSION
FILE NUMBER:    000-33391





EV
Innovations, INC.


(Exact
Name of Registrant as Specified in Its Charter)





NEVADA
            
            88-0490890(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)








4894
      Lone Mountain #168, Las Vegas NV
            
            89130(Address
      of principal executive offices)
            
            (Zip
      Code)





(702)
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





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 registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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   ̈ No




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and 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-K
or any amendment to this Form 10-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 companyx


(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 as of the last business day of the registrant’s most recently
completed second fiscal quarter was $27,988,214.




Number of
shares of Common Stock outstanding as 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, WEARE FILING THIS AMENDMENT NO.
1TO OUR FORM 10-K FOR THE
YEAR ENDEDJULY 31,
2008(THE “2008 FORM 10-K”)THIS AMENDMENT NO.
1AMENDSTHE 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 SETFORTHIN THE 2008FORM 10-K AS OFNOVEMBER 12, 2008, THE DATE ON WHICH THE 2008 10-KWAS FILED, NO ATTEMPTEXCEPT AS DESCRIBED ABOVE HAS BEEN MADE
IN THIS AMENDMENT NO.1TO 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-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 2008, and beyond, to differ
materially from those expressed in any forward-looking statements made by or on
our behalf.




Item 1. Business.





Background





Hybrid
Technologies, Inc. ("we", “us", the "Company" or "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
evaluated various business opportunities including a 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;
oil and gas properties in California; and a medical software product company. We
did not pursue several of these opportunities, and none of these business
opportunities produced meaningful revenue. Following the sale of the Azra
shopping center and our determination 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.





Recent
Developments





Effective
April 15, 2008, we entered into two material agreements with respect to our
subsidiary Zingo, Inc., the name of which was subsequently changed to
Superlattice 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 80,000,000 shares of common stock of
Superlattice held by us to the 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 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.


1


License Agreement for Our Lithium
Ion Battery Technology





Effective
April 15, 2008, we entered into a License Agreement (the “License Agreement”)
with 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”).





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 invest a minimum 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 be
suitable for, and utilized by Superlattice for, Superlattice’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.
Effective April 16, 2008, we also sold to Superlattice for the purchase price of
$29,005, specified equipment and supplies related to the Licensed
Field.





Liquidity
and Capital Resources





As of
July 31, 2008, we had cash on hand of $101,095. At that same date our
liabilities totaled $6,685,173. During
the period since inception on April 12, 2000 to July 31, 2008, we had incurred
net operating losses from continuing operations totaling $50,736,407. On July
31, 2008, we had a working capital deficit of $78,640 and a stockholders'
deficit of $4,127,965.





We had
23,347,257 shares of common stock issued and outstanding as of October 15, 2008.
Our common stock is traded on the OTC Bulletin Board.





General





We are a
early stage technology company. We are developing and marketing electric powered
vehicles and products.





Our Electric Battery Pack
and Vehicle Technology





After the
termination of all licensing relationships 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 have purchased in
Mooresville, North Carolina. We have commenced marketing conversions of
four-wheel vehicles in 2007 and 2008.


2


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 gasoline power systems with all electric power
systems and battery management systems. We also convert some large and
small ATV's, electric bicycles and electric scooters. We are converting
three-wheeled vehicles, such as small ATV's and vehicles for handicapped
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
chargers. We are also setting up a battery lab that Superlattice will use of
approximately 5,000 square feet, which is 80% completed.





The
Battery Packs We Would Use





The
electric vehicles’ battery pack performs the same function as the gas tank in a
conventional vehicle: it stores the energy needed to operate the vehicle. We use
battery packs created in-house from Kokam cells in our converted vehicles. We
anticipate using cells created by Superlattice by late 2009.





Electric
Motors





We are
using a variety of electric motors in our 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 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.


3


Products Under
Development





We have
products under development in the following categories.





We have
converted golf carts , a type
of neighborhood electric vehicle (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’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.





ATV's and
Lawn and Garden Equipment





We have
converted ATV's, including four small two-passenger ATV's and a four-wheel
drive, two-passenger ATV with a truck bed. We also developed what we view as a
next generation ATV with four-wheel independent 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;


4


Current Joint Venture
Activities or Negotiations in Progress





U.S.
Navy





On
February 5, 2004 we announced the initiation of a lithium-ion conversion project
with the United States Navy. We have funded the initial 3kw prototype for this
project, and the prototype has 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 run 24 hours a day, seven days a week. Daily down
time is required to charge the vehicle. The vehicle has been returned and the
project is completed.





Paratransit





Paratransit,
Sacramento, California, a company providing community transportation services,
purchased two converted PT Cruisers. The two vehicles were delivered in November
2006.





NASA





We have
signed a Space Act agreement with NASA and several vehicles are being tested by
NASA at the Kennedy Space Center in Florida.





Solar
House




We are
also participating to showcase our technology in a “green” home in Calgary,
Alberta.





California
Highway Patrol





Hybrid
Technologies funded a lithium-powered bike to honor officers killed in the line
of 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 signed
an agreement in June 2007, pursuant to which the Canadian 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.


5


Holiday
2007





Hybrid
was featured as Sam’s Club’s once in a lifetime package and a Smart Car with a
trip to 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





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
Lightning GT is a battery powered sports car manufactured by the UK company
British Lightning Car Company that is scheduled to go on sale in 2009. 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 2010.





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 of yet deliveries have not
commenced.





The Th!nk
City is the only crash tested and highway certified electric car in the
world.  The vehicles are manufactured in Aurskog, Norway and are capable of
a 190mi range.





The
Venturi Fétish is a two-seater electric sports car produced by Venturi in
Monaco.





The
Commuter Car T600 is a three-wheeled $108,000 car with a range of 80 miles
manufactured by Commuter Car Corporation.





Employees





As of the
date of this report, we have 35 employees, including our President and CEO,
Holly 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 $1,009,483 in our fiscal year
ended July 31, 2007, and of approximately $1,402,077 in our fiscal year ended
July 31, 2008.


6


Patents and
Trademarks





The
Company has filed provisional patent applications with the 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.





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 minimal revenues from joint ventures and sales of our products. We have not
signed any definitive joint venture agreements to commercialize any of our
products . As of
July 31, 2008, we had cash on hand of $101,095. At that same date our
liabilities totaled $6,685,173. During the period since inception on April 12,
2000 to July 31, 2008, we had incurred net operating losses from continuing
operations totaling $50,736,407. On July 31, 2008, we had a working capital
deficit of $78,640 and a stockholders' deficit of $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 for commercialization of our products, and therefore we will need to
obtain additional financing to complete our business plan. We do not currently
have arrangements for financing and we may not find such financing if required.
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 our
ability to continue as a going concern is uncertain.





WE ARE
SUBJECT TO ALL OF THE RISKS OF A NEW BUSINESS





Our
business operations are relatively recent; therefore we face a potentially
higher risk of business failure. Our sales revenues are still not significant as
of the date of this report. Potential investors should be aware of the
difficulties normally encountered by newer 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,
delays encountered in connection with the commercialization of our products.
unanticipated problems relating to product development, arranging and
negotiating with joint venture partners, additional costs and expenses that may
exceed current estimates. We have limited 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 may 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.


7


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 has limited experience in negotiating licenses and joint
ventures to commercialize the types of products we are developing. As a result
of this inexperience, there is a high risk we may be unable to complete our
business plan and negotiate profitable licenses or joint ventures for our
lithium ion battery powered products. Because of the intense competition for our
planned products, there is substantial risk that we will not successfully
commercialize these products.





OUR
PRODUCTS WILL BE HIGHLY REGULATED





Our
products are highly regulated. There are special safety standards in effect for
vehicles with a top speed of up to 25 miles per hour. Marketing vehicles that
compete with passenger cars, requires compliance with the full federal safety
standards. Regulatory reviews and compliance has 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 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 competitive and risky. We are
competing against numerous competitors with 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.





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.


8


Item 2.
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 4894 Lone
Mountain #168, Las Vegas , Nevada 89130 , for
which we pay $25 per month, on a month to month basis.





We
purchased, in May 2006, a 40,000 square foot facility at 158 Rolling Hill in
Mooresville, North Carolina.




Item 3. 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.





On June
3, 2008, we were 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 of the Company to 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 and
$3 billion, as well as injunctive relief for the alleged sending of unsolicited
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 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.





Not
applicable.


9


PART II




Item 5. 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
            
            LowAugust
      1, 2006 to October 31, 2006
            
            $
            7.41
            
            $
            3.30November
      1, 2006 to January 31, 2007 (1)
            
            $
            5.42
            
            $
            3.52February
      1, 2007 to April 30, 2007 (2)(3)
            
            $
            4.77
            
            $
            4.11May
      1, 2007 to July 31, 2007 (4)
            
            $
            4.35
            
            $
            2.50August
      1, 2007 to October 31, 2007
            
            $
            2.78
            
            $
            1.85November
      1, 2007 to January 31, 2008 (5)
            
            $
            17.43
            
            $
            4.55February
      1, 2008 to April 30, 2008
            
            $
            5.15
            
            $
            2.05May
      1, 2008 to July 31, 2008
            
            $
            6.30
            
            $
            3.35August
      1, 2008 to October 14, 2008
            
            $
            3.35
            
            $
            1.12







(1)A
one-for-ten stock dividend was effective November 30, 2006.


(2)Following
the one-for-twenty stock dividend effective January 31, 2007.


(3)A
one-for-twenty stock dividend was effective March 30, 2007.


(4)A
one-for-ten stock dividend was effective May 31, 2007.


(5)A
one-for-seven reverse split was effective January 17, 2008.





The above
quotations are taken from information provided by Yahoo 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
October 15, 2008, we had 104 holders of record of our common stock.





Dividends





Our
current policy is to retain earnings in order to finance 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.


10


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.





(c)Number of securitiesremaining available forfuture issuance under(a)
            
            (b)
            
            equity compensationNumber of securities to be
            
            Weighted-average exercise
            
            plans (excludingissued upon exercise of
            
            price of outstanding
            
            securitiesoutstanding options,
            
            options, warrants and
            
            reflected inPlan category
            
            warrants and rights
            
            rights
            
            column (a))Equity
      compensation Plans approved by security holdersEquity
      compensation plans not approved by security holders
            
            
            1,019,000
            
            $
            2.90
            
            
            2,575,000Total
            
            
            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.


11


Item 6. 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 July 31, 2008





We
incurred a net loss from continuing operations of $6,064,840 for the year ended
July 31, 2008, and of approximately $9,866,877 for the year ended July 31, 2007,
and in the year ended July 31, 2008, general and administrative costs of
$3,477,077 and interest expense of $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 2008 decreased from fiscal 2007
(from $9,866,877 in 2007 to approximately $6,064,840 in 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 twelve 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 2008 as compared with -0- in 2007.





PLAN OF
OPERATION





During
the period since inception on April 12, 2000 to July 31, 2008, we had incurred
net operating losses from continuing operations totaling $50,736,407. On July
31, 2008, we had a working capital deficit of $78,640 and a stockholders'
deficit of $4,127,965.





The
continuation of the Company as a going concern is dependent upon the continued
financial support from our shareholders, 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.


12


As of
July 31, 2008, we had cash on hand of $101,095. At that same date our
liabilities totaled $6,685,173. We do not have sufficient cash on hand to
complete commercialization of our current and 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 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 a License Agreement (the “License Agreement”)
with Superlattice Power, Inc. (formerly our subsidiary, Zingo, Inc., “SPI”)
providing for our license to SPI of our patent applications and technologies for
rechargeable lithium ion batteries for hybrid vehicles and other applications
(“Licensed Products”). Under the License Agreement, we have the right to
purchase our requirements of lithium ion batteries from SPI, and our
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
fiscal quarter of SPI in which our 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.





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 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. Effective April 16,
2008, we also sold to SPI for the purchase price of $29,005, specified equipment
and supplies related to the Licensed Field.





Commercial
Initiatives





On
February 5, 2004 we announced the initiation of a lithium-ion conversion project
with the United States Navy. We have funded the initial 3kw prototype for this
project, and the prototype has 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 two months in New York City. The
vehicle has been returned and the project is completed. Paratransit,
Sacramento, California, a company providing community transportation services,
purchased two converted PT Cruisers. We have signed a Space Act agreement with
NASA and several vehicles are being tested by NASA at the Kennedy Space Center
in Florida. We are
also participating to showcase our technology in a “green” home in
Calgary, Alberta. We signed an agreement in June 2007, pursuant to which the
Canadian Ministry of 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.


13


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 and borrowings. We expect to finance
operations through the sale of equity in the foreseeable future as we receive
minimal revenue from our current business operations. There is no guarantee that
we will be successful in arranging financing on acceptable terms.





During
the year ended July 31, 2008, we received net proceeds of $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 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, 2008.


14




Crystal Capital Ventures Loan
Agreement





On May 5,
2008, we entered 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 May 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 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
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 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 for commercialization of our
planned products, and therefore we will need to obtain additional financing in
order to complete our business plan. We anticipate that up to $2,000,000 of
additional working capital will be required over the next 12 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 require, 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.





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.


15


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 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.


16


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.


17


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.


18


Item 8. Financial Statements and
Supplementary Data.




HYBRID TECHNOLOGIES,
INC.




CONSOLIDATED FINANCIAL
STATEMENTS


July 31, 2007 and
2008





TABLE OF
CONTENTS




PageReport
      of Independent Registered Public Accounting Firm
            20Consolidated
      balance sheet
            22Consolidated
      statements of operations
            23Consolidated
      statements of stockholders’ equity
            24Consolidated
      statements of cash flows
            25Notes
      to consolidated financial statements
            26





19




REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors of Hybrid Technologies, Inc.


4894 Lone
Mountain Rd., #168


Las
Vegas, NV 89110





We have
audited the consolidated balance sheet of Hybrid Technologies, Inc. and
Subsidiaries, a development stage company (collectively, the “Company”), as
of July 31, 2008, and the related consolidated statements of operations,
stockholders’ deficiency, and cash flows for the year then ended. 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. The financial statements of Hybrid Technologies, Inc. as of July 31,
2007, were audited by other auditors whose report, dated November 7, 2007,
expressed an unqualified opinion on those statements.





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 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 Hybrid Technologies, Inc. and Subsidiaries as of July 31,
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





20


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 shown in the consolidated
financial statements, the Company incurred a net loss of $45,411,768 from April
12, 2000 (Inception) through July 31, 2007. This and other factors discussed in
Note 2 raise substantial doubt about the Company's ability to continue as a
going concern. The 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


21


HYBRID TECHNOLOGIES,
INC.


A Development Stage
Company




Consolidated Balance
Sheets





July 31,2008
            
            2007ASSETSCurrent
      assets:Cash
            
            $
            101,095
            
            $
            3,775Marketable
      securities - restricted
            
            
            -
            
            
            41,224Accounts
      receivable, net of allowance fordoubtful
      accounts of $0 and $139,003
            
            
            13,601
            
            
            1,994Inventories
            
            
            287,310
            
            
            425,775Other
      current assets
            
            
            69,119
            
            
            60,233Due
      from related parties
            
            
            -
            
            
            24,505Total current
      assets
            
            
            471,125
            
            
            557,506Property
      and equipment, net
            
            
            2,014,580
            
            
            2,120,343Other
      long term assets:Other
      assets
            
            
            51,600
            
            
            51,600Deferred
      patent costs
            
            
            19,903
            
            
            -Total other long term
      assets
            
            
            71,503
            
            
            51,600$
            2,557,208
            
            $
            2,729,449LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIENCY)Current
      liabilities:Current
      portion of long-term debt
            
            $
            32,422
            
            $
            241,460Accounts
      payable and accrued expenses
            
            
            330,183
            
            
            489,788Customer
      deposits
            
            
            149,160
            
            
            -Deferred
      revenue
            
            
            -
            
            
            2,990Advances
      from related parties
            
            
            38,000
            
            
            -Total current
      liabilities
            
            
            549,765
            
            
            734,238Long-term
      debt - less current portion above
            
            
            6,135,408
            
            
            803,258Commitments
      and contingencies
            
            
            -
            
            
            -Minority
      interest
            
            
            -
            
            
            2,377Stockholders'
      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
            
            
            39,501Additional
      paid-in-capital
            
            
            47,790,509
            
            
            46,569,703Deficit
      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


22


HYBRID TECHNOLOGIES,
INC.


A Development Stage
Company





Consolidated Statements of
Operations





INCEPTIONYEAR ENDED
            
            (April 12,, 2000)JULY 31,
            
            THROUGH2008
            
            2007
            
            July 31, 2008Sales
            
            $
            199,801
            
            $
            48,750
            
            $
            1,969,054Costs
      and expenses:Cost
      of sales
            
            
            384,267
            
            
            124,301
            
            
            2,533,563General
      and administrative
            
            
            3,477,077
            
            
            8,383,310
            
            
            41,655,009Research
      and development
            
            
            1,402,077
            
            
            1,009,483
            
            
            7,371,693Compensatory
      element of stock issuances
            
            
            804,652
            
            
            -
            
            
            804,6526,068,073
            
            
            9,517,094
            
            
            52,364,917Loss
      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
            
            
            946,388Net
      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
            
            
            -
            
            
            90,069Net
      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
            
            
            -
            
            
            19,200Net
      loss
            
            
            (6,535,683
            )
            
            (10,619,757
            )
            
            (51,947,451
            )Other
      comprehensive income (loss):Foreign
      currency translation
            
            
            13,490
            
            
            (7,860
            )
            
            5,630Net
      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
            
            
            28,393,440Net
      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


23


HYBRID TECHNOLOGIES,
INC.


A Development Stage
Company





Consolidated Statement of
Stockholder's Equity (Deficiency)





DeficitAccumulated
            
            
            
            CumulativeAdditional
            
            During the
            
            
            
            OtherCommon stock
            
            
            
            Paid-in
            
            Development
            
            Subscription
            
            ComprehensiveShares
            
            Amount
            
            Capital
            
            Stage
            
            Receivable
            
            Income (loss)
            
            TotalBalance April 12,
      2000
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Stock
      issuancesIssuance
      of stock for cash
            
            
            760,500
            
            
            7,605
            
            
            81,690
            
            
            -
            
            
            -
            
            
            -
            
            
            89,295Net
      loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,773
            )
            
            -
            
            
            -
            
            
            (7,773
            )Balance January 31,
      2001
            
            
            760,500
            
            
            7,605
            
            
            81,690
            
            
            (7,773
            )
            
            -
            
            
            -
            
            
            81,522Net
      loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            (65,618
            )
            
            -
            
            
            -
            
            
            (65,618
            )Balance January 31,
      2002
            
            
            760,500
            
            
            7,605
            
            
            81,690
            
            
            (73,391
            )
            
            -
            
            
            -
            
            
            15,904Stock
      issuancesNon-cash
      issuance of common stock
            
            
            3,600,000
            
            
            (3,244
            )
            
            403,249
            
            
            -
            
            
            -
            
            
            -
            
            
            400,005Value
      of rent donated by a related party
            
            
            -
            
            
            -
            
            
            6,000
            
            
            -
            
            
            -
            
            
            -
            
            
            6,000Net
      loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            (825,493
            )
            
            -
            
            
            -
            
            
            (825,493
            )Balance January 31,
      2003
            
            
            4,360,500
            
            
            4,361
            
            
            490,939
            
            
            (898,884
            )
            
            -
            
            
            -
            
            
            (403,584
            )Stock
      issuancesNon-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
            
            
            -
            
            
            -
            
            
            -
            
            
            589,500Expenses
      paid with stock
            
            
            2,250
            
            
            2
            
            
            8,748
            
            
            -
            
            
            -
            
            
            -
            
            
            8,750Amortization
      of deferred stock compensation
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            4,394,000
            
            
            4,394,000Issuance
      of common stock for cash and note
            
            
            42,533
            
            
            42
            
            
            199,958
            
            
            -
            
            
            (50,000
            )
            
            -
            
            
            150,000Net
      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
      issuancesReturn
      of non-cash issuance
            
            
            (1,012,500
            )
            
            (1,013
            )
            
            1,013
            
            
            -
            
            
            -
            
            
            -
            
            
            -Stock
      redemption
            
            
            (900,000
            )
            
            (900
            )
            
            900
            
            
            -
            
            
            -
            
            
            -
            
            
            -Employee
      stock based compensation
            
            
            -
            
            
            -
            
            
            7,071,467
            
            
            -
            
            
            -
            
            
            -
            
            
            7,071,467Exercise
      of options
            
            
            1,072,892
            
            
            1,073
            
            
            924,222
            
            
            -
            
            
            -
            
            
            -
            
            
            925,295Stock
      re-issuance
            
            
            900,000
            
            
            900
            
            
            (900
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Amortization
      of deferred stock compensation
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            266,000
            
            
            266,000Basis
      of assets acquired less then purchase price
            
            
            -
            
            
            -
            
            
            (54,656
            )
            
            -
            
            
            -
            
            
            -
            
            
            (54,656
            )Stock
      dividend
            
            
            618,558
            
            
            619
            
            
            (619
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Collection
      of receivable
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            50,000
            
            
            -
            
            
            50,000Net
      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
      issuanceExercise
      of options
            
            
            9,500
            
            
            10
            
            
            60,790
            
            
            -
            
            
            -
            
            
            -
            
            
            60,800Sale
      of stock for cash
            
            
            4,000
            
            
            4
            
            
            19,996
            
            
            -
            
            
            -
            
            
            -
            
            
            20,000Stock
      issued for related party advances
            
            
            500,000
            
            
            500
            
            
            3,384,094
            
            
            -
            
            
            -
            
            
            -
            
            
            3,384,594Stock
      dividend
            
            
            365,882
            
            
            366
            
            
            (366
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Options
      issued for expenses
            
            
            -
            
            
            -
            
            
            250,000
            
            
            -
            
            
            -
            
            
            -
            
            
            250,000Net
      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
      issuancesValue
      of stock options issued
            
            
            -
            
            
            -
            
            
            7,577,255
            
            
            -
            
            
            -
            
            
            -
            
            
            7,577,255Exercise
      of options
            
            
            1,470,500
            
            
            1,470
            
            
            9,434,530
            
            
            -
            
            
            -
            
            
            -
            
            
            9,436,000Stock
      issued for debt
            
            
            12,732,500
            
            
            12,733
            
            
            2,987,266
            
            
            -
            
            
            -
            
            
            -
            
            
            2,999,999Stock
      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
            )
            
            -
            
            
            -
            
            
            2,832,293Stock
      issuancesValue
      of stock options issued (valued at $1.05 per share)
            
            
            -
            
            
            -
            
            
            2,103,600
            
            
            -
            
            
            -
            
            
            -
            
            
            2,103,600Exercise
      of options (valued at $3.55 per share)
            
            
            1,206,000
            
            
            1,206
            
            
            4,280,094
            
            
            -
            
            
            -
            
            
            -
            
            
            4,281,300Value
      of stock issued for services (valued at $0.8387 per share)
            
            
            3,100,000
            
            
            3,100
            
            
            2,596,900
            
            
            -
            
            
            -
            
            
            -
            
            
            2,600,000Stock
      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
            )
            
            1,189,576Stock
      issuancesValue
      of stock options issued (valued at $1.8933 per share)
            
            
            -
            
            
            
            
            
            804,652
            
            
            
            
            
            
            
            
            
            
            
            804,652Common
      stock issued as collateral on loanpre-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
            
            
            -
            
            
            -
            
            
            -
            
            
            400,000Net
      loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            (6,535,683
            )
            
            -
            
            
            -
            
            
            (6,535,683
            )Foreign
      currency transactions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            13,490
            
            
            13,490Balance 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


24


HYBRID TECHNOLOGIES,
INC.


A Development Stage
Company





Consolidated Statements of Cash
Flows





Inception(April 12,, 2000)YEAR ENDED
            
            throughJULY 31,
            
            July 31,2008
            
            2007
            
            2008Cash
      provided (used in) Operating Activities:Net
      (loss)
            
            $
            (6,535,683
            )
            $
            (10,619,757
            )
            $
            (51,947,451
            )Adjustments
      to reconcile net (loss) to cashDepreciation
      and amortization
            
            
            103,407
            
            
            130,476
            
            
            819,966Bad
      debt expense
            
            
            9,678
            
            
            176,904
            
            
            186,582Gain/loss
      of sale of other assets
            
            
            788
            
            
            314,381
            
            
            315,169Minority
      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
            
            
            330,183Increase
      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
            
            
            -
            
            
            1,320,313Cash 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
            
            
            1,136,372Proceeds
      from sale of subsidiary
            
            
            215,000
            
            
            -
            
            
            215,000Decrease
      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
            
            
            -
            
            
            108,318Investment
      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
            
            
            15,692,895Collection
      of stock receivable
            
            
            -
            
            
            -
            
            
            50,000Proceeds
      from the issuance of debt
            
            
            6,194,713
            
            
            -
            
            
            9,114,713Advances
      from related parties
            
            
            3,867,791
            
            
            3,446,777
            
            
            12,669,807Payments
      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
            
            
            -
            
            
            -
            
            
            259,300Cash provided by financing
      activities
            
            
            5,585,617
            
            
            3,968,249
            
            
            26,907,549Effect
      of exchange rate changes on cash and cash equivalents
            
            
            13,490
            
            
            (7,860
            )
            
            5,630Net
      increase (decrease) in cash
            
            
            97,320
            
            
            (515,406
            )
            
            101,095Cash
      at beginning of period
            
            
            3,775
            
            
            519,181
            
            
            -Cash
      at end of period
            
            $
            101,095
            
            $
            3,775
            
            $
            101,095Supplemental
      information:Cash
      paid during the year for:Interest
      paid
            
            $
            231,114
            
            $
            63,800Income
      taxes paid
            
            $
            -
            
            $
            -Non
      - cash financing activities:Fixed
      assets acquired by the issuance of debt
            
            $
            -
            
            $
            -
            
            $
            1,300,000Shares
      issued for related party advances
            
            $
            -
            
            $
            -
            
            $
            3,000,000





SEE NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


25


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 these
uncertainties should the Company be unable to continue as a going
concern.




26


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 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 liability. The Company
record minority interest expense which reflects the portion of the earnings
(loss) of majority owned operations which are applicable to the minority
interest partners. The minority ownership of the Company’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 subsidiaries and 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 accordance with the accounting
standards generally accepted in the United States of 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. Actual results could differ from those
estimates.





Financial
instruments


The fair
value of 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:


27


HYBRID TECHNOLOGIES,
INC.
 A Development Stage
Company
 
 Notes to Consolidated Financial
Statements
 
 Lives
              
              MethodsBuilding
      improvements
              
              
              39
      years
              
              
              Straight
      lineFurniture
      and fixtures
              
              
              10
      years
              
              
              AcceleratedSoftware
              
              
              3-5
      years
              
              
              Straight
      lineComputers
              
              
              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 assumed 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 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.
 
 28





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 long-lived assets is reviewed on a regular basis for the
existence of facts and circumstances that may suggest impairment. The Company
recognizes impairment when the sum of undiscounted future cash flows is less
than the carrying amount of the asset. The write down of the asset is charged to
the period in which the impairment occurs.





Foreign currency
translation


The
functional currency for some foreign operations is the local currency. Assets
and liabilities of foreign operations are translated at balance sheet date rates
of exchange and income, expense and cash flow items are translated at the
average exchange rate for the period. Translation adjustments in future periods
will be recorded in Cumulative Other Comprehensive Income. The translation gains
or losses were not material for the years ended July 31, 2008 and
2007.





Comprehensive
loss


The
Company reports comprehensive loss in accordance with the requirements of SFAS
No. 130. For the years ended July 31, 2008 and 2007, the difference between net
loss and comprehensive loss is foreign currency translation.





Loss per Share


Basic
loss per common share is computed by dividing net loss by the weighted average
number of common shares outstanding during the specified period. Diluted loss
per common share is computed by dividing net loss by the weighted average number
of common shares and potential common shares during 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
              
              
              2007Net
      sales
              
              $
              600,303
              
              $
              1,330,062Loss
      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.


29


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 an 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 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 reporting standards for the noncontrolling (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.


30


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 the 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
              
              2007Raw
      materials
              
              $
              134,456
              
              $
              323,170Work
      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:


31


HYBRID TECHNOLOGIES,
INC.
 A Development Stage
Company
 
 Notes to Consolidated Financial
Statements
  July 31,2008
              
              2007Building
      and improvements
              
              $
              1,272,352
              
              $
              1,270,637Furniture
      and fixtures
              
              
              19,548
              
              
              115,944Office
      equipment
              
              
              137,030
              
              
              114,825Machinery
      and equipment
              
              
              19,026
              
              
              27,389Vehicles
              
              
              60,979
              
              
              73,203Software
      costs
              
              
              11,874
              
              
              19,993Land
              
              
              700,000
              
              
              700,0002,220,809
              
              
              2,321,991Less
      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
              
              2007Deposits
              
              $
              1,600
              
              $
              1,600Other
      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.


32


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
              
              2007Note
      payable to Richard Howard,paid
      in full in November 2007 (1)
              
              $
              -
              
              $
              1,044,71810.875%
      note payable to Bayview LoanServicing,
      LLC, payable in monthlyinstallments
      of approximately $11,388 includinginterest,
      collateralized by real propertydue
      in full on or before December 2022 (1)
              
              
              984,204
              
              
              -10%
      note payable to Wyndom CapitalInvestments,
      Inc., payable in October 2010collateralized
      by 10,000,000 shares ofthe
      Company's common stock (2)
              
              
              3,971,15010%
      note payable to Crystal CapitalVentures,
      payable in May 2011collateralized
      by 7,500,000 shares ofthe
      Company's common stock (3)
              
              
              1,211,000
              
              
              -15.8%
      note payable to AllegianceDirect
      Bank, payable in monthlyinstallments
      of approximately $525,due
      in full on October 2008 (4)
              
              
              1,4766,167,830
              
              
              1,044,718Less
      current portion
              
              
              (32,422
              )
              
              (241,460
              )$
              6,135,408
              
              $
              803,258




33





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
              
              $
              32,4222010
              
              
              4,004,9722011
              
              
              1,249,8072012
              
              
              43,2452013
              
              
              48,189Thereafter
              
              
              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 is sufficient to make 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.


34


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.





The
Company issued 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 compensation





Prior to
August 1, 2006, the Company accounted for its share-based compensation plans
using the intrinsic value method in accordance with the provisions of Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations, as permitted by Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." Effective 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, and (ii) compensation cost for all share-based payments granted
subsequent to January 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of SFAS No. 123(R). Results for prior periods
have not been restated.


35


HYBRID TECHNOLOGIES,
INC.
 A Development Stage
Company
 
 Notes to Consolidated Financial
Statements
  On
November 10, 2005, the FASB 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 alternative 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 assumptions utilized to value the 2006 stock option
plan for the year ended July 31, 2008 and 2007 under SFAS 123R and using
the Black-Scholes valuation model. Among other factors, the Black 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. The risk-free interest
rate is based upon U.S. Treasury Rates for instruments with similar terms. The
expected term of the grants were estimated based upon the Company’s prior
average experience. The Company has not paid cash dividends to date and does not
plan to pay cash dividends in the near future. The volatility assumptions were
derived from historical volatilities of competitors whose shares are traded in
the public markets and are adjusted to reflect anticipated behavior specific to
the 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") 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 Securities and Exchange Commission that was declared effective. The
Plan allows the Company's Board of Directors to issue up to 1,800,000 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 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. All
2003 Restricted Stock Plan commons shares have been issued.





The
Company established the 2005 Restricted Stock Plan ("the 2005 Plan") in April,
2005 and filed an S-8 Registration Statement with the Securities and Exchange
Commission that was declared effective. The 2005 Plan allows the Company's Board
of Directors to issue up to 2,000,000 common shares pursuant to the 2005 Plan as
compensation for services to the Company. The Company's Board of Directors has
the discretion to set 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 $1.89 and $3.55 per
share for 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.


36


HYBRID TECHNOLOGIES,
INC.
 A Development Stage
Company
 
 Notes to Consolidated Financial
Statements
  A summary
of the Company’s Restricted Stock Plans follows:




Number
      of
                SharesAuthorized
      options but ungranted:Balance July 31, 2006
              
              
              -Options
      authorized (2006 Plan)
              
              
              5,000,000Options
      granted (2006 Plan)
              
              
              (2,000,000
              )Options
      cancelled/expired (2006 Plan)
              
              
              -Balance July 31,
      2007
              
              
              3,000,000Options
      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/shareOptions
      granted but unexercised:Balance July 31, 2006
              
              
              14,500
              
              $
              6.40Options
      cancelled during the year ended July 31, 2007 (2005 Plan)
              
              
              (14,500
              )
              $
              6.40Options
      granted during the year ended July 31, 2007 (2006 Plan)
              
              
              2,000,000
              
              $
              3.55Options
      exercised during the year ended July 31, 2007 (2006 Plan)
              
              
              (1,206,000
              )
              $
              3.55Balance July 31, 2007
              
              
              794,000
              
              $
              3.55Options
      cancelled during the year ended July 31, 2008 (2006 Plan)
              
              
              -Options
      granted during the year ended July 31, 2008 (2006 Plan)
              
              
              425,000
              
              $
              2.00Options
      exercised during the year ended July 31, 2008 (2006 Plan)
              
              
              (200,000
              )
              $
              3.55Unexercised 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
              
              WeightedExercisable
              
              Outstanding at
              
              Average
              
              Exercisable at
              
              AveragePrices
              
              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.


37


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
              
              2007Revenues
      from external customers:Telecommunication
      servicesUnited
      States
              
              $
              -
              
              $
              -India
              
              
              -
              
              
              -Canada
              
              
              -
              
              
              -Electric
      powered vehicle salesUnited
      States
              
              
              199,801
              
              
              48,750Hong
      Kong
              
              
              -
              
              
              -India
              
              
              -
              
              
              -Total
      revenues from continuing operations
              
              $
              199,801
              
              $
              48,750Loss
      from continuing operations:Telecommunication
      servicesUnited
      States
              
              $
              -
              
              $
              -India
              
              
              -
              
              
              -Canada
              
              
              -
              
              
              -Electric
      powered vehicle salesUnited
      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
      servicesUnited
      States
              
              $
              -
              
              $
              -India
              
              
              -
              
              
              -Canada
              
              
              -
              
              
              -Electric
      powered vehicle salesUnited
      States
              
              
              71,503
              
              
              51,600Hong
      Kong
              
              
              -
              
              
              -India
              
              
              -Total
      long-lived assets
              
              $
              71,503
              
              $
              51,600




38


HYBRID TECHNOLOGIES,
INC.
 A Development Stage
Company
 
 Notes to Consolidated Financial
Statements


YEAR ENDED JULY
      31,2008
              
              2007Capital
      expenditures:Telecommunication
      servicesUnited
      States
              
              $
              -
              
              $
              6,365India
              
              
              7,985
              
              
              34,510Canada
              
              
              -
              
              
              -Electric
      powered vehicle salesUnited
      States
              
              
              93,970
              
              
              118,327Hong
      Kong
              
              
              -
              
              
              -India
              
              
              4,795
              
              
              -Total
      capital expenditures
              
              $
              106,750
              
              $
              159,202Depreciation
      and amortization:Telecommunication
      servicesUnited
      States
              
              $
              16,532
              
              $
              41,495India
              
              
              10,276
              
              
              3,495Canada
              
              
              -
              
              
              -Electric
      powered vehicle salesUnited
      States
              
              
              76,013
              
              
              85,486Hong
      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 normal 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 approximately $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 of the
Company to 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 and
$3 billion, as well as injunctive relief for the alleged sending of unsolicited
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 authorizing in any manner unsolicited facsimiles issued by
The Raging Bull or other parties that seek to promote the Company’s
stock.


39


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 amount of
$40,000 from a financial institution to guarantee certain creditor payments. The
financial institution required the 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
              
              2007Tax
      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
              
              2007Tax effect
              
              Tax
      effectDeferred
      tax assets - current:United
      States net operating loss
              
              $
              18,182,000
              
              $
              17,000,000Valuation
      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.


40


Item 9. Changes In and Disagreements
With Accountants on Accounting and Financial
Disclosure.




None.




Item 9A (T). Controls and
Procedures.





As
supervised by our board of directors and our principal executive and principal
financial officers, management has established a system of 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-15(f) of the Securities
Exchange Act of 1934 (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 permit us to provide only management's report in this 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 Exchange Act)
during the fourth quarter of our 2008 fiscal year that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.




Item 9B. Other
Information.




None.


41


PART III




Item 10. Directors, Executive
Officers, and Corporate Governance.





Our
executive officers and directors and their respective ages as of October , 2008
are as follows:




Name
            
            Age
            
            PositionHolly
      A. Roseberry
            
            56
            
            Chief
      Executive Officer, President and DirectorMehboob
      Charania
            
            52
            
            Director,
      Treasurer and SecretaryBrian
      Newman
            
            57
            
            DirectorGreg
      Navone
            
            61
            
            Director





Our Board
of Directors now consists of four directors. The following information 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
during the past five years, has been furnished to the Company by the respective
officers and director:





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 2003, she acted as manager for 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 has 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 has 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.


42




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 have
an audit committee, with Brian Newman, an independent "audit committee financial
expert" as defined in the rules of the Securities and Exchange 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 described above.





Section 16(A) Beneficial
Ownership Reporting Compliance




Section
16(a) of the Exchange Act requires the Company’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 July 31, 2008 all such filing requirements
applicable to its officers and directors were complied with.


43




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 years ended July 31,
2008 and 2007. No other compensation was paid to any such officer or director
other than the cash compensation set forth below.





SUMMARY
COMPENSATION TABLE





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)HollyRoseberryPresident
            
            
            2007
            
            $
            60,500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            60,5002008
            
            $
            64,720
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            64,720MehboobCharania,Director
            
            
            2007
            
            $
            1,827
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            1,827





* Years
ended July 31, 2008 and July 31, 2007.





** Holly
Roseberry has held the office of President since November 15, 2002. Ms.
Roseberry's functions as President have included, in addition to accounting and
regulatory filing oversight, management and the sale of the Azra shopping
center, general management of our 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





There
were no grant of options to purchase our common stock to our officers or
directors in fiscal 2008, and there were no exercises of such options during or
options held at the end 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 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.


44





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
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            39,750Brian
      Newman
            
            
            12,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            12,000Gregory
      Navone
            
            
            12,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            12,000Shaffiq
      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 September 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.


Name and address
              
              Number of Shares
              
              Percentage ofTitle of class
              
              of beneficial owner
              
              of Common Stock
              
              Common Stock (1)Common
      Stock
              
              Holly
      RoseberryPresident,
      CEO, Director4894
      Lone Mountain Rd. #168Las
      Vegas, Nevada 89130
              
              
              555
              
              
              
              *All
      Officers and DirectorsDirectors
      as a Group thatConsists
      of four persons
              
              
              555
              
              
              
              *Crystal
      Capital Ventures Inc.1274
      Sundial Ave. Coral GrovePO
      Box 2135Belize
      City, Belize
              
              
              7,500,000
              (2)
              
              32.12
              %Wyndom
      Capital Investments
              
              
              
              
              
              42.83
              %35
      New Road #2112Belize
      City, Belize
              
              
              10,000,000
              (3)





* Less
than 1%


45





(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 13. Certain Relationships and
Related Transactions, and Director Independence.





In our
fiscal year ended July 31, 2007, 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 changeover 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 $120,000 and $-0-, respectively. As of July 31, 2008
and 2007, the amount due by 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




46




Item 15. Exhibits and Financial
Statement Schedules.





Exhibit No.
            
            Description3.1
            
            Articles
      of Incorporation of the Company.(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.)4.1
            
            Specimen
      Common Stock Certificate. (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.)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 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.)




47




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 its 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 by reference to Exhibit
      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, by and between RV Systems, Inc. and Whistler Investments,
      Inc. (Incorporated by reference to Exhibit 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 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 10.6 to the Company's Current Report on Form 8-K,
      filed with the Commission on January 23, 2004.)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.)




48




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.)




49




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 and Principal Financial Officer Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002, filed
    herewith.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, filed herewith.




50




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.





EV
INNOVATIONS, INC.





By:
            /s/
      Holly RoseberryHolly
      RoseberryChief
      Executive Officer and Principal Financial OfficerDate:
      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 RoseberryHolly
      RoseberryPresident
      and C.E.O.(President,
      Chief Executive OfficerPrincipal
      Financial Officer and Director)Date:
      April 16, 2008By:
                      /s/
      Brian NewmanBrian
      Newman(Director)Date:
      April 16, 2008By:
                      /s/
      Gregory NavoneGregory
      Navone(Director)Date:
      April 16,
2008


51





EXHIBIT
INDEX





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.


52