UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q





x
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended October 31, 2008








 ̈
            Transition
      Report pursuant to 13 or 15(d) of the Securities Exchange
      Act   of 1934





For the
transition period from  to





Commission
File Number 000-33391





HYBRID
TECHNOLOGIES, INC.





(Exact
name of Small Business Issuer as specified in its charter)





Nevada
                  
                  88-0490890(State
      or other jurisdiction of
                  
                  (IRS
      Employer Identification No.)incorporation
      or organization)





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





Issuer's
telephone number, including area code:  702-425-7376








Former
name, former address and former fiscal year, if changed since last
report)





Check  whether
the issuer (1) filed all reports  required to be filed by Section 13
or 15(d) of the  Exchange  Act during the past 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. xYes o No





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act. Yes  ̈No x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company.  (Check
One):





Large
      accelerated filer
             ̈
            Accelerated
      filer
             ̈Non-accelerated
      filer
             ̈
            Smaller
      reporting company
            x(Do
      not check if a smaller reporting
company)





APPLICABLE
ONLY TO CORPORATE ISSUERS




The
number of shares outstanding the issuer's common stock, $.001 par value, was
23,347,257 as of December 1, 2008.










HYBRID
TECHNOLOGIES, INC.





TABLE OF
CONTENTS




Page No.PART
      I. FINANCIAL INFORMATION
                    1ITEM
      1 – Financial Statements
                    1ITEM
      2 – Management's Discussion and Analysis of  Financial
      Condition and Results of Operations.
                    16ITEM
      3 –  Quantitative and Qualitative Disclosures about Market
      Risk
                    20ITEM
      4T– Controls and Procedures.
                    21PART
      II. OTHER INFORMATION
                    21ITEM
      1 – Legal Proceedings
                    21ITEM
      6 – Exhibits
                    21EXHIBIT
      31 – Certification pursuant to Section 302 of the Sarbanes- Oxley Act
      of 2002EXHIBIT
      32 – Certification pursuant to Section 906 of the Sarbanes- Oxley Act
      of 2002










PART I.
FINANCIAL INFORMATION





HYBRID
TECHNOLOGIES, INC.





INDEX





Page No.ITEM
      I – Unaudited Consolidated Financial StatementsConsolidated
      Balance Sheets as of October 31, 2008 and July 31, 2008
      (Unudited)
                                      2Consolidated
      Statements of Operations for the Three Months Ended October 31, 2008 and
      2007 and from Inception (April 12, 2000) to October 31, 2008
      (Unaudited)
                                      3Consolidated
      Statement of Stockholders Equity (Deficit) (Unaudited)
                                      4Consolidated
      Statements of Cash Flows for the Three Months Ended October 31, 2008 and
      2007 and from Inception (April 12, 2000) to October 31, 2008
      (Unaudited)
                                      5-6Notes to Unaudited Consolidated Financial
      Statements
                                      7-12





1





HYBRID TECHNOLOGIES, INC.


A
Development Stage Company





Consolidated
Balance Sheets


(UNAUDITED)




October 31,
                      
                      
                      July 31,2008
                      
                      
                      2008ASSETSCurrent
      assets:Cash
                      
                      $
                      2,472
                      
                      
                      $
                      101,095Accounts
      receivable, net of allowance for doubtful accounts of $0
                      
                      
                      133,161
                      
                      
                      
                      13,601Inventories
                      
                      
                      329,091
                      
                      
                      
                      287,310Employee
      Advances
                      
                      
                      3,564
                      
                      
                      
                      -Other
      current assets
                      
                      
                      11,819
                      
                      
                      
                      69,119Total
      current assets
                      
                      
                      480,107
                      
                      
                      
                      471,125Property
      and equipment, net
                      
                      
                      2,006,801
                      
                      
                      
                      2,014,580Other
      long term assets:Other
      assets
                      
                      
                      51,600
                      
                      
                      
                      51,600Deferred
      patent costs
                      
                      
                      19,903
                      
                      
                      
                      19,903Total
      other long term assets
                      
                      
                      71,503
                      
                      
                      
                      71,503$
                      2,558,411
                      
                      
                      $
                      2,557,208LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      liabilities:Current
      portion of long-term debt
                      
                      $
                      30,403
                      
                      
                      $
                      32,422Accounts
      payable and accrued expenses
                      
                      
                      428,381
                      
                      
                      
                      330,183Customer
      deposits
                      
                      
                      259,331
                      
                      
                      
                      149,160Advances
      from related parties
                      
                      
                      448,795
                      
                      
                      
                      38,000Total
      current liabilities
                      
                      
                      1,166,910
                      
                      
                      
                      549,765Long-term
      debt - less current portion above
                      
                      
                      6,436,075
                      
                      
                      
                      6,135,408Commitments
      and contingencies
                      
                      
                      -
                      
                      
                      
                      -Stockholders'
      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
      October 31, 2008 and July 31, 2008, respectively
                      
                      
                      23,347
                      
                      
                      
                      23,347Additional
      paid-in-capital
                      
                      
                      47,790,509
                      
                      
                      
                      47,790,509Deficit
      accumulated during the development stage
                      
                      
                      (52,846,460
                      )
                      
                      
                      (51,947,451
                      )Cumulative
      other comprehensive income (loss)
                      
                      
                      (11,970
                      )
                      
                      
                      5,630Total
      stockholders' deficiency
                      
                      
                      (5,044,574
                      )
                      
                      
                      (4,127,965
                      )$
                      2,558,411
                      
                      
                      $
                      2,557,208




SEE
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS




2





HYBRID TECHNOLOGIES, INC.


A
Development Stage Company





Consolidated
Statements of Operations


(UNAUDITED)





INCEPTIONTHREE MONTHS ENDED
                
                
                (April 12,, 2000)OCTOBER 31,
                
                
                THROUGH2008
                
                
                2007
                
                
                July 31, 2008Sales
                
                $
                1,945
                
                
                $
                102,414
                
                
                $
                1,970,999Costs
      and expenses:Cost
      of sales
                
                
                -
                
                
                
                185,794
                
                
                
                2,533,563General
      and administrative
                
                
                483,901
                
                
                
                574,059
                
                
                
                42,138,910Research
      and development
                
                
                416,252
                
                
                
                73,542
                
                
                
                7,787,945Compensatory
      element of stock issuances
                
                
                -
                
                
                
                -
                
                
                
                804,652900,153
                
                
                
                833,395
                
                
                
                53,265,070Loss
      from continuing operations
                
                
                (898,208
                )
                
                
                (730,981
                )
                
                
                (51,294,071
                )Other
      income (expense):Interest
      expense
                
                
                (27,293
                )
                
                
                (27,080
                )
                
                
                (999,844
                )Interest
      income
                
                
                7,077
                
                
                
                242
                
                
                
                7,077Loss
      from sale of other assets
                
                
                -
                
                
                
                -
                
                
                
                (314,381
                )Other
      income
                
                
                19,415
                
                
                
                (378
                )
                
                
                965,803Net
      loss from continuing operations
                
                
                (899,009
                )
                
                
                (758,197
                )
                
                
                (51,635,416
                )Provision
      for income tax
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss from continuing operations
                
                
                (899,009
                )
                
                
                (758,197
                )
                
                
                (51,635,416
                )Discontinued
      operations:Loss
      from discontinued operations
                
                
                -
                
                
                
                (309,969
                )
                
                
                (1,320,313
                )Gain
      on disposal of discontinued operations
                
                
                -
                
                
                
                -
                
                
                
                90,069Net
      loss on discontinued operations
                
                
                -
                
                
                
                (309,969
                )
                
                
                (1,230,244
                )Loss
      from continued and discontinued operations
                
                
                (899,009
                )
                
                
                (1,068,166
                )
                
                
                (52,865,660
                )Minority
      interest share of loss of consolidated subsidiaries from discontinued
      operations
                
                
                -
                
                
                
                -
                
                
                
                19,200Net
      loss
                
                
                (899,009
                )
                
                
                (1,068,166
                )
                
                
                (52,846,460
                )Other
      comprehensive income (loss):Foreign
      currency translation
                
                
                2,361
                
                
                
                3,972
                
                
                
                7,991Net
      comprehensive loss
                
                $
                (896,648
                )
                
                $
                (1,064,194
                )
                
                $
                (52,838,469
                )Net
      loss per share - basic and diluted - continuing operations
                
                $
                (0.04
                )
                
                $
                (0.02
                )Weighted
      shares outstanding - basic and diluted - continuing
    operations
                
                
                23,347,257
                
                
                
                39,500,511Net
      loss per share - basic and diluted - discontinued
    operations
                
                $
                -
                
                
                $
                (0.01
                )Weighted
      shares outstanding - basic and diluted - discontinued
      operations
                
                
                23,347,257
                
                
                
                39,500,511





SEE
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS




3





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 loan pre-reverse stock split
                                        
                                        
                                        10,000,000
                                        
                                        
                                        
                                        10,000
                                        
                                        
                                        
                                        (10,000
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Reverse
      stock split
                                        
                                        
                                        (42,428,598
                                        )
                                        
                                        
                                        (42,429
                                        )
                                        
                                        
                                        42,429
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Common
      stock issued as collateral on loan post-reverse stock
split
                                        
                                        
                                        16,071,427
                                        
                                        
                                        
                                        16,071
                                        
                                        
                                        
                                        (16,071
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Exercise
      of options post-reverse  stock split (valued at $1.96 per
      share)
                                        
                                        
                                        203,917
                                        
                                        
                                        
                                        204
                                        
                                        
                                        
                                        399,796
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        400,000Net
      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
                                        )Net
      (loss) for the period
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (899,009
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (899,009
                                        )Foreign
      currency transactions
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (17,600
                                        )
                                        
                                        
                                        (17,600
                                        )Balance
      October 31, 2008
                                        
                                        
                                        23,347,257
                                        
                                        
                                        $
                                        23,347
                                        
                                        
                                        $
                                        47,790,509
                                        
                                        
                                        $
                                        (52,846,460
                                        )
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        (11,970
                                        )
                                        
                                        $
                                        (5,044,574
                                        )





SEE
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS




4





HYBRID TECHNOLOGIES, INC.


A
Development Stage Company





Consolidated
Statements of Cash Flows


(UNAUDITED)




Inception(April 12, 2000)THREE MONTHS ENDED
                                
                                
                                throughOctober 31,
                                
                                
                                October 31,2008
                                
                                
                                2007
                                
                                
                                2008Cash
      provided (used in) Operating Activities:Net
      (loss)
                                
                                $
                                (899,009
                                )
                                
                                $
                                (1,068,166
                                )
                                
                                $
                                (52,846,460
                                )Adjustments
      to reconcile net (loss) to cashDepreciation
      and amortization
                                
                                
                                19,617
                                
                                
                                
                                30,232
                                
                                
                                
                                839,583Bad
      debt expense
                                
                                
                                -
                                
                                
                                
                                22,813
                                
                                
                                
                                186,582Gain/loss
      of sale of other assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                315,169Non
      cash stock-based compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                24,550,293(Increase)
      in accounts receivable
                                
                                
                                (119,560
                                )
                                
                                
                                (26,497
                                )
                                
                                
                                (319,743
                                )(Increase)
      in inventories
                                
                                
                                (41,781
                                )
                                
                                
                                (29,869
                                )
                                
                                
                                (329,091
                                )(Increase)
      in employee advances
                                
                                
                                (3,564
                                )
                                
                                
                                -
                                
                                
                                
                                (3,564
                                )(Increase)
      decrease in prepaid expenses and other assets
                                
                                
                                57,300
                                
                                
                                
                                6,531
                                
                                
                                
                                (11,819
                                )(Increase)
      in other assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (50,000
                                )Increase
      in accounts payable and accrued expenses
                                
                                
                                98,198
                                
                                
                                
                                78,526
                                
                                
                                
                                428,381Increase
      in customer deposits
                                
                                
                                110,171
                                
                                
                                
                                -
                                
                                
                                
                                259,331(Gain)
      on sale of subsidiary
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (90,069
                                )Loss
      from discontinued operations
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,320,313Cash
      used in operating activities
                                
                                
                                (778,628
                                )
                                
                                
                                (986,430
                                )
                                
                                
                                (25,751,094
                                )Cash
      provided by (used in) Investing Activities:Increase
      in other assets
                                
                                
                                -
                                
                                
                                
                                14,918
                                
                                
                                
                                (1,452,353
                                )Proceeds
      from sale of other assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,136,372Proceeds
      from sale of subsidiary
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                215,000Purchase
      of property and equipment
                                
                                
                                (11,838
                                )
                                
                                
                                (65,992
                                )
                                
                                
                                (1,150,670
                                )Proceeds
      from sale of property and equipment
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                108,318Investment
      in subsidiaries
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (688,220
                                )Increase
      in deferred patent costs
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (19,903
                                )Cash
      used in investing activities
                                
                                
                                (11,838
                                )
                                
                                
                                (51,074
                                )
                                
                                
                                (1,851,456
                                )Cash
      provided (used in) by Financing Activities:Proceeds
      from the exercise of stock options
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                15,692,895Collection
      of stock receivable
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                50,000Proceeds
      from the issuance of debt
                                
                                
                                306,995
                                
                                
                                
                                250,000
                                
                                
                                
                                9,421,708Advances
      from related parties
                                
                                
                                681,087
                                
                                
                                
                                2,577,406
                                
                                
                                
                                13,350,894Payments
      of related party advances
                                
                                
                                (270,292
                                )
                                
                                
                                (1,580,267
                                )
                                
                                
                                (9,742,575
                                )Payments
      of debt
                                
                                
                                (8,347
                                )
                                
                                
                                -
                                
                                
                                
                                (1,415,230
                                )Proceeds
      from the issuance of common stock
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                259,300Cash
      provided by financing activities
                                
                                
                                709,443
                                
                                
                                
                                1,247,139
                                
                                
                                
                                27,616,992Effect
      of exchange rate changes on cash and cash equivalents
                                
                                
                                (17,600
                                )
                                
                                
                                3,972
                                
                                
                                
                                (11,970
                                )Net
      increase (decrease) in cash
                                
                                
                                (98,623
                                )
                                
                                
                                213,607
                                
                                
                                
                                2,472Cash
      at beginning of period
                                
                                
                                101,095
                                
                                
                                
                                3,775
                                
                                
                                
                                -Cash
      at end of period
                                
                                $
                                2,472
                                
                                
                                $
                                217,382
                                
                                
                                $
                                2,472Supplemental
      information:Cash
      paid during the year for:Interest
      paid
                                
                                $
                                -
                                
                                
                                $
                                -Income
      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 UNAUDITED FINANCIAL STATEMENTS




5




HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





Note
1. Financial statement presentation





The
financial statements have been prepared in accordance with Securities Exchange
Commission requirements for interim financial statements.  Therefore,
they do not include all information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements.  These financial statements should be read in conjunction
with the financial statements and notes thereto contained in the Company's
Annual Report on form 10-K for the year ended July 31, 2008 as filed with the
Securities Exchange Commission.





The
results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for the full
year.  In the opinion of management, the information contained herein
reflects all adjustments necessary to make the results of operations for the
interim period a fair statement of such operations.  All such
adjustments are of a normal recurring nature.





History
and Nature of Business


Hybrid
Technologies, Inc., 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 October 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 $29,654. 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 three months ended October 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 $1,945 of revenue for the three months ending October
31, 2008, and as of October 31, 2008, there was a stockholders’ deficiency of
approximately $5 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.


6


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





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.





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.


7


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





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:





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 October 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.





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 three months ended October 31,
2008 and 2007 and inception (August 12, 2000) to October 31, 2008 date amounted
to approximately $170,000, $40,000 and $1,948,000,
respectively.


8


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





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."





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 three months ended October 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 1,219,000 common shares at
October 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 $0 and $309,969, respectively, for the three months ended October
31, 2008, and 2007, and $1,630,282 from inception (August 12, 2000) through
October 31, 2008.


9


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





Summarized
combined statement of loss for discontinued operations is as
follows:





THREE MONTHS ENDEDOctober 31,2008
                        
                        
                        2007Net
      sales
                        
                        $
                        -
                        
                        
                        $
                        234,674Loss
      before income tax
                        
                        
                        -
                        
                        
                        
                        (544,643
                        )Provision
      for income taxes
                        
                        
                        -
                        
                        
                        
                        -Loss
      from operations - net tax
                        
                        
                        -
                        
                        
                        
                        (309,969
                        )Gain
      on sale of discontinued operations
                        
                        
                        -
                        
                        
                        
                        -Provision
      for income taxes
                        
                        
                        -
                        
                        
                        
                        -Loss
      from discontinued operations - net of tax
                        
                        $
                        -
                        
                        
                        $
                        (309,969
                        )





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 three months ended
October 31, 2007 in the Company’s Consolidated Statements of
Operations.





Recently
issued accounting pronouncements


In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“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 noncontrolling interest on
the face of the consolidated statement of income.  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
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application
of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS
157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive
accounting pronouncements that address leasing transactions from the
requirements of SFAS No. 157, with the exception of fair value measurements of
assets and liabilities recorded as a result of a lease transaction but measured
pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS
157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). FSP
SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of
SFAS No. 157 on January 1, 2008. The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it fully implements SFAS No. 157 on
January 1, 2009, as required, and does not believe they will have a significant
impact on its financial statements.


10


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED 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. Property and equipment





Property
and equipment consist of:





October 31,
                  
                  
                  July 31,2008
                  
                  
                  2008Building
      and improvements
                  
                  $
                  1,272,352
                  
                  
                  $
                  1,272,352Furniture
      and fixtures
                  
                  
                  23,713
                  
                  
                  
                  19,548Office
      equipment
                  
                  
                  139,173
                  
                  
                  
                  137,030Machinery
      and equipment
                  
                  
                  20,521
                  
                  
                  
                  19,026Vehicles
                  
                  
                  60,979
                  
                  
                  
                  60,979Software
      costs
                  
                  
                  15,739
                  
                  
                  
                  11,874Land
                  
                  
                  700,000
                  
                  
                  
                  700,0002,232,477
                  
                  
                  
                  2,220,809Less
      accumulated depreciation
                  
                  
                  (225,676
                  )
                  
                  
                  (206,229
                  )$
                  2,006,801
                  
                  
                  $
                  2,014,580




Depreciation
expense for the three months ended October 31, 2008 and 2007 was $19,617 and
$30,232, respectively.





Note
3. Inventories





Inventories
consist of the following:





October 31,
                  
                  
                  July 31,2008
                  
                  
                  2008Raw
      materials
                  
                  $
                  127,694
                  
                  
                  $
                  134,456Work
      in progress
                  
                  
                  100,097
                  
                  
                  
                  117,124101,300
                  
                  
                  
                  35,730Finished
      goods
                  
                  $
                  329,091
                  
                  
                  $
                  287,310





Raw
materials, work in progress and finished goods for the three months ended
October 31, 2008, and year ended July 31, 2008, is related to the Company’s
planned sales of electric powered vehicles.


11


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





Note
4. Advances from related parties and related party transactions


During
the three months ended October 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 $0 2008, and $0 and $9,940, respectively in
2007. As of October 31, 2008 and 2007, the balance was $0 and $10,000,
respectively.





The
Company received and repaid additional advances from SSRI (owned by a Company
stockholder) for the three months ended October 31, 2008 and 2007 in amounts of
$630,087 and $270,291, respectively for 2008 and $2,556,382 and $1,557,479,
respectively for 2007. As of October 31, 2008 and 2007, the amount due to SSRI
was $397,795 and $897,468, respectively.





The
Company did not receive and repay any additional advances from Salim Rana (a
Company Stockholder) for the three months ended October 31, 2008 and 2007. As of
October 31, 2008 and 2007, the amount due to Salim Rana was $0 and $82,866,
respectively.





The
Company received and repaid additional advances from A & S Holding (owned by
a previous Company president) for the three months ended October 31, 2008 and
2007 in amount of $0 for 2008 and $10,876 and $0, respectively for
2007.  As of October 31, 2008 and 2007, the amount due to the Company
was $0.





The
Company received and repaid additional advances from Greg Navone (Director of
the Company) for the three months ended October 31, 2008 and 2007 in amount of
$51,000 and $0, respectively for 2008 and $115,000and $117,700, respectively for
2007. As of July 31, 2008 and 2007, the amount due to the Company was $51,000
and $2,300, 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.


12




HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note
5. Long-term debt
 
 Long-term
debt consists of:




October
      31,
                  
                  
                  July
      31,2008
                  
                  
                  200810.875%
      note payable to Bayview Loan Servicing, LLC, payable in monthly
      installments of approximately $11,388 including interest, collateralized
      by real property due in full on or before December 2022
(1)
                  
                  
                  977,333
                  
                  
                  
                  984,20410%
      note payable to Wyndom Capital Investments, Inc., payable in October 2010
      collateralized by 10,000,000 shares of the Company's common stock
      (2)
                  
                  
                  3,971,150
                  
                  
                  
                  3,971,15010%
      note payable to Crystal Capital Ventures, payable in May 2011
      collateralized by 7,500,000 shares of the Company's common stock
      (3)
                  
                  
                  1,517,995
                  
                  
                  
                  1,211,00015.8%
      note payable to Allegiance Direct Bank, payable in monthly installments of
      approximately $525, due in full on October 2008 (4)
                  
                  
                  -
                  
                  
                  
                  1,4766,466,478
                  
                  
                  
                  6,167,830Less
      current portion
                  
                  
                  (30,403
                  )
                  
                  
                  (32,422
                  )$
                  6,436,075
                  
                  
                  $
                  6,135,408





Principal
maturities on continuing operations are as follows as of October 31,
2008:





2009
                  
                  $
                  30,4032010
                  
                  
                  4,006,5822011
                  
                  
                  1,557,8672012
                  
                  
                  44,4312013
                  
                  
                  49,511Thereafter
                  
                  
                  777,683$
                  6,466,478





(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 for the three months ended October 31, 2008 and
2007 for Bayview Loan Servicing, LLC is approximately $27,200 and $63,900,
respectively, and $91,200 from inception (August 12, 2000) through October 31,
2008.


13


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





(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 October 31, 2008, the Company has borrowed approximately
$3,971,000 under the loan agreement. Interest expense for the three months ended
October 31, 2008 and 2007 for Wyndom is approximately $0, and $397,000 from
inception (August 12, 2000) through October 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
October 31, 2008, the Company has borrowed $1,517,995 under the loan agreement.
Interest expense for the three months ended October 31, 2008 and 2007 for
Crystal Capital is approximately $30,700 and $0, respectively, and $30,699 from
inception (August 12, 2000) through October 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%. Interest expense for the three months ended October 31, 2008 and 2007
Allegiance Direct Bank is approximately $0 and $195 from inception (August 12,
2000) through October 31, 2008.





Note
6. Stockholders’ Equity





In
January 2008, 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 5.





Note
7. 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:


14


HYBRID
TECHNOLOGIES, INC.


A
Development Stage Company





NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





THREE
      MONTHS ENDEDOctober
      31,2008
                  
                  
                  2007Revenues
      from external customers:United
      States
                  
                  $
                  1,945
                  
                  
                  $
                  102,414Hong
      Kong
                  
                  
                  -
                  
                  
                  
                  -India
                  
                  
                  -
                  
                  
                  
                  -Total
      revenues from continuing operations
                  
                  $
                  1,945
                  
                  
                  $
                  102,414Loss
      from continuing operations:United
      States
                  
                  
                  (873,437
                  )
                  
                  
                  (730,731
                  )Hong
      Kong
                  
                  
                  (1
                  )
                  
                  
                  (250
                  )India
                  
                  
                  (24,770
                  )
                  
                  
                  -Total
      loss from continuing operations
                  
                  $
                  (898,208
                  )
                  
                  $
                  (730,981
                  )





Note
8. Going concern





The
Company's financial statements are prepared based on the going concern
principle. That principle anticipates the realization of assets and payments of
liabilities through the ordinary course of business.  No adjustments
have been made to reduce the value of any assets or record additional
liabilities, if any, if the Company were to cease to exist. The Company has
incurred significant operating losses since inception. These operating losses
have been funded by the issuance of capital, loans and advances. There are no
guarantees that the Company will continue to be able to raise the funds
necessary. Additionally, the lack of capital may limit the Company's ability to
establish a viable business.





15





Item
      2.
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.





FORWARD
LOOKING STATEMENTS





This
quarterly 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 OPERATION





During
the period since inception on April 12, 2000 to October 31, 2008, we have incurred
operating losses aggregating $52,846,460.  At October 31, 2008, we had
liabilities of $7,602,985 and a working capital deficiency of
$606,803.


As of
October 31, 2008, we had $2,472 cash on hand.





THREE
MONTHS ENDED OCTOBER 31, 2008 and 2007





We  incurred
a net loss of  $899,099 for the three months ended October
31,  2008, which included general and administrative costs of $483,901
and research and development expense of $416,252.





Our net
loss from continuing operations for the
three-month  period  ended October 31, 2008 increased from
the comparative period in fiscal 2007 (from $758,197 in 2007 to $899,009 in
2008). This was primarily due to a decrease in general and administrative
expense from $574,059 in the three-month period ended October 31, 2007, to
$483,901 for the comparable period in 2008; an increase in research and
development expense from $73,542 in 2007 to $416,252 in 2008, reflecting an
increased level of research and development for vehicles; and a decrease in
sales from $102,414 in the three-month period ended October 31, 2007, to $1,945
in 2008.  In the three months ended October 31, 2007, we incurred
general and administrative costs of $358,664 with respect to discontinued
operations. In 2008, we also incurred interest expense of $27,293 related to
loans payable, as compared with $27,090 for the comparable period in
2007.





Telecommunications
Services





On April
16, 2008 we sold our controlling interest of approximately 69% of the
outstanding common stock in Zingo, Inc. (now Superlattice Power, Inc.), which
provided telecommunication services to business and residential customers
utilizing VoIP technology.





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.


16





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.





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 nine months ended October 31, 2008, we received net proceeds of $298,648
from the issuance of promissory notes for debt, and net proceeds of advances
from related parties of $410,755.





17


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.





As of
October 31, 2008, the Company has borrowed $3,971,150 under the Wyndom Capital
Loan Agreement.





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.





As of
October 31, 2008, the Company has borrowed $1,517,995 under the Crystal Capital
Loan Agreement.


18


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.




Other
Matters





New
Financial Accounting Standards





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“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 noncontrolling interest on
the face of the consolidated statement of income.  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.


19


In
February 2008, the FASB issued FASB Staff Position SFAS 157-1, “Application
of SFAS No. 157 to SFAS No. 13 and Its Related Interpretative Accounting
Pronouncements that Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB
Staff Position SFAS 157-2, “Effective Date of SFAS No. 157” (“FSP SFAS
157-2”). FSP SFAS 157-1 excludes SFAS No. 13 and its related interpretive
accounting pronouncements that address leasing transactions from the
requirements of SFAS No. 157, with the exception of fair value measurements of
assets and liabilities recorded as a result of a lease transaction but measured
pursuant to other pronouncements within the scope of SFAS No. 157. FSP SFAS
157-2 delays the effective date of SFAS No. 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). FSP
SFAS 157-1 and FSP SFAS 157-2 became effective for the Company upon adoption of
SFAS No. 157 on January 1, 2008. The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it fully implements SFAS No. 157 on
January 1, 2009, as required, and does not believe they will have a significant
impact 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.





Item
      3.
              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.


20


Item
      4(T).
              Controls
      and Procedures.





As of the
end of the fiscal quarter covered by this Form 10-Q, the Company carried out an
evaluation, under the supervision and with the participation of the Company’s
management, including the Company’s Chief Executive Officer and Principal
Financial and Accounting Officer, of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures as defined in Rule
13a-14 of the Securities Exchange Act of 1934. Based upon that evaluation, the
Chief Executive Officer and Principal Financial and Accounting Officer concluded
that the Company’s disclosure controls and procedures are effective in timely
alerting her to material information relating to the Company (including its
consolidated subsidiaries) required to be included in this Quarterly Report on
Form 10-Q. There have been no changes in the Company’s internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.





PART II-
OTHER INFORMATION





Item 6.
Exhibits





Ex
      31
              Certification
      of Chief Executive Officer and Principal Financial Officer Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002, filed
    herewith.Ex
      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.





SIGNATURES





In
accordance with the  requirements of the Exchange Act, the
registrant  caused this  report to be  signed on
its  behalf  by
the  undersigned,  thereunto duly authorized.





Hybrid
      Technologies, Inc./s/Holly RoseberryHolly
      RoseberryPresident
      and Director(Chief
      Executive Officer andPrincipal
      Financial Officer)Dated:
      December 15, 2008


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