U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] Annual Report Pursuant To Section 13 Or 15(d) Of The Securities
Exchange Act Of 1934
For the fiscal year ended January 31, 2004
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[ ] Transition Report Under Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER: 000-33391
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WHISTLER INVESTMENTS, INC.
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(Name of small business issuer in its charter)
NEVADA 98-0339467
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5001 East Bonanza Road, Suite 144-145
Las Vegas, Nevada 89110
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(Address of principal executive offices) (Zip Code)
(702) 296-2754
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Issuer's telephone number
Securities registered under
Section 12(b) of the Exchange Act: NONE
Securities registered under
Section 12(g) of the Exchange Act: COMMON STOCK, PAR VALUE $0.001 PER SHARE
Check 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.
Yes [X] No [__]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: NIL
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.):
$64,762,252.80 based on the closing price for our shares of common stock of
$5.60 on April 23, 2004.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 20,083,683 shares of common stock as
at April 23, 2004.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
PART I
NOTE REGARDING FORWARD LOOKING STATEMENTS
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Annual Report contains historical information as well as
forward-looking statements. Statements looking forward in time are included in
this Annual Report pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements involve known and
unknown risks and uncertainties that may cause our actual results in future
periods to be materially different from any future performance suggested herein.
We wish to caution readers that in addition to the important factors described
elsewhere in this Form 10-KSB, the following forward looking statements, among
others, sometimes have affected, and in the future could affect, our actual
results and could cause our actual consolidated results during 2004, and beyond,
to differ materially from those expressed in any forward-looking statements made
by or on our behalf.
ITEM 1. DESCRIPTION OF BUSINESS.
Background
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Whistler Investments, Inc. ("we", "us", the "Company" or "Whistler")
was incorporated under the laws of the State of Nevada in April 2000. Since our
incorporation, we have been involved in the evaluation of various business
opportunities including the exploration of the Queen Mineral Property in British
Columbia; the Azra Shopping Center in Las Vegas, which we acquired on April 10,
2002, and disposed of on January 1, 2003; a Vancouver based coffee franchise;
producing oil and gas properties in California; and a medical software product
and services company. To date, none of these business opportunities has resulted
in our generation of meaningful revenue.
Following the sale of the Azra shopping center near the end of our
fiscal year ended January 31, 2003, and our determination made in the first
quarter of our last fiscal year not to pursue acquisition of a medical software
company, we began to focus our efforts on the development and marketing of
electric powered vehicles and products.
In order to begin to take the necessary steps to begin to implement our
new business strategy, we entered into a licensing agreement with NuAge
Electric, Inc. ("NuAge"), whereby we agreed to acquire a license, subject to a
20% royalty interest retained by NuAge, to all of NuAge's rights relating to the
manufacture and sale of two and three wheel electric vehicles using an electric
power drive system technology licensed by NuAge from Nu Pow'r, LLC.
On October 21, 2003, the original licensing agreement between Whistler
and NuAge was terminated. We subsequently entered into a new licensing and
distribution agreement with RV Systems, Inc. ("RV Systems")to acquire the
worldwide rights (with the exception of India for the two- and three-wheeled
vehicle technology) to sell, distribute and/or manufacture specified products
utilizing the portable power systems developed by RV System's affiliate,
Lithium House, Inc. ("Lithium House"). RV Systems is the licensee of Lithium
House for all product development and applications of portable power systems
utilizing Lithium House's proprietary lithium battery technology.
Our agreement with RV Systems includes licensed technologies in three
separate product groups: (i) two- and three-wheeled vehicles to be manufactured
and sold in all countries except India; (ii) lawn and garden equipment to be
manufactured and sold in all countries; and (iii) Neighborhood Electric Vehicles
(NEV's) to be manufactured and sold in all countries. We have also entered into
an agreement to retain the services of Mr. Chaz Haba, the founder of Lithium
House, to provide technical advice to Whistler's Board of Directors. Mr. Haba
has a strong technology background, as one of the engineers involved in the
tooling of the microprocessor at the beginning of Intel, and one of the early
investors in Apple Computers in the 1970's.
As of January 31, 2004, Whistler had cash on hand of $169,428. As of
January 31, 2004, Whistler's liabilities totaled $695,205 and primarily
consisted of a notes payable in the amount of $553,983 due to a shareholder in
connection with the acquisition of Azra Center and advances by the stockholder
to Whistler. During the period since its inception on April 12, 2000 to January
31, 2004, Whistler had incurred operating losses totaling $5,728,483. On January
31, 2004, Whistler had a working capital deficiency of $525,777 and a
stockholders' deficit of $90,933.
We had 20,083,683 shares of common stock outstanding as of April 23,
2004. Our common stock is traded on the OTC Bulletin Board. On February 25,
2004, we announced that our Board of Directors had approved a three-for-one
forward stock split, which was effective Wednesday, March 10, 2004. Stockholders
of record were entitled to three shares of common stock for each share of common
stock held on that date.
General
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We are a development stage technology company. We are engaged in the
development and marketing of electric powered vehicles and products, which would
be the applications of advanced lithium battery technology developed by Lithium
House, utilizing the Lithium Portable Power System technology developed by Mr.
Chaz Haba. We have preliminary agreements with the Motorcycle Division and the
International Trade Division of Geely Corporation, China.
We have placed our technology development into three divisions, each a
wholly owned subsidiary of the Company, and allocating the licensing rights for
the various applications into each applicable division. Global Electric Corp.
will hold the licensing rights for all product development other than
four-wheeled vehicles. R-Electric Car Co. will hold the licensing rights for
product development for all four-wheeled vehicles. Solium Power Corp. will hold
the rights for the advanced Lithium/Solar Power System technology developed by
Mr. Chaz Haba, for application to residential and commercial properties.
Under the license agreement with RV Systems, which we signed on October
21, 2003 (the "License Agreement"), we have the worldwide rights to
commercialize applications of Lithium House's lithium battery technology to
two-, three- and four- wheeled vehicles (except two- and three-wheeled vehicles
for India), lawn and garden equipment, watercraft, and the worldwide rights to
the advanced Lithium/Solar Power System technology for application to
residential and commercial properties.
Lithium House was founded in 2002 by Charles Haba and designs and
builds lithium ion and lithium polymer battery packs and systems. Prior to the
founding of Lithium House, Mr. Haba was involved in the founding of Planet
Electric, Inc. (see description under "Item 3. Legal Proceedings" of litigation
filed by a stockholder of Planet Electric, Inc.). Lithium House is dedicated to
applying its proprietary methods of lithium battery technology to improve
performance and reliability for everyday power needs. With its substantial
experience building lithium battery systems, Lithium House can provide the exact
battery and charger configurations for virtually any application.
Our Licensed Technology
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Under the License Agreement, we own the rights to utilize the lithium
ion and lithium polymer battery packs, proprietary controllers and propulsion
systems developed by Lithium House in any two-wheel, three-wheel and four-wheel
vehicles, as well as any lawn and garden equipment (with the exception of India
for the two- and three-wheeled vehicle technology).
The Lithium House Battery Packs We Would Use
The electric vehicle battery pack performs the same function as the
gasoline tank in a conventional vehicle: it stores the energy needed to operate
the vehicle.
We would not be in the business of building battery cells. Lithium
House stocks thousands of batteries and has relationships with manufacturers in
Korea and China that are capable of large scale production of battery packs.
Lithium House's battery packs can be produced in wide variety of sizes,
capacities and voltages as required by the particular product application.
Lithium House offers battery and charging solutions in seven broad
product areas: computers, portable power (such as portable generators ranging
from purse-size to rolling generators on wheels), cameras, lighting (including
lighting belts and power sources for motion picture cameras, video, sound and
production equipment with ranges of 4 to 120 volt applications),
recreational/transportation applications (including two- and three-wheeled
vehicles and small cars), camping (primarily power packs) and hobby and RC
control models.
Lithium House uses individual lithium ion cells that have 4.2 volts DC
and 2.2 amps each and are welded in such a manner (in parallel and series) to
provide up to 224 volts DC and 86.016 KW (thus a battery pack can contain up to
thousands of the individual cells) depending on the voltage and number of amps
required. The battery pack may contain many "packs" of the cells each in a ABS
protection shell for protection against abrasion and moisture and will have a
separate thermal cut off circuit to prevent over heating and control circuits
that will monitor the voltage during discharge and charging to ensure that the
pack does not go below a minimum voltage or above a maximum.
Electric Motors
We are using a variety of electric motors in our prototypes. We are not
reliant on any single manufacturer of electric motors. There are a large number
of domestic and foreign manufacturers of electric motors, and we anticipate no
difficulties in obtaining adequate quantities of the motors with the
specifications we require at reasonable commercial prices from a number of these
sources.
Products Under Development
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We have products under development in the following categories.
NEV's
A neighborhood electric vehicle or NEV is a 4-wheeled vehicle, larger
than a go cart but smaller than most light-duty passenger vehicles. NEV's are
usually configured to carry two or four passengers with a pickup bed. NEV's are
defined by the United States National Highway Traffic Safety Administration as
subject to Federal Motor Vehicle Safety Standard (FMVSS} No. 500. Per FMVSS 500,
NEV's have top speeds between 20 and 25 miles per hour and are defined as "Low
Speed Vehicles". FMVSS 500 requires that NEV's be equipped with headlamps, stop
lamps, turn signal lamps, tail lamps, reflex reflectors, parking brakes, rear
view mirrors, windshields, seat belts, and vehicle identification numbers. About
35 states have passed legislation or regulations allowing NEV's to be licensed
and driven on roads that are generally posted at 35 miles per hour or less.
While NEV's were initially used in gated communities, they have been
increasingly used by the general public for school transportation, shopping and
general neighborhood trips. In addition, they are used at military bases,
national parks, commercial airports and for local government activities.
We are developing an electric car and have under development the "R
car". We are developing the R Car to carry four passengers, to reach speeds of
up to 90 miles per hour and to have a range of approximately 200 miles.
We believe that the most important characteristic of our technology is
that the Lithium House battery power source we intend to use is much more
efficient and powerful than other battery power sources. Vehicles utilizing this
technology have the ability to travel far greater distances, can recharge in
less time and also benefit from weight reduction, as compared with vehicles
using other battery powered systems. One of the major historic hurdles facing
electric vehicle manufacturers is that most power sources would not allow the
vehicle to travel over 100 miles before needing to be recharged. We believe that
we can produce electric powered vehicles with a travel range greater than 200
miles.
A significant difference between electric vehicles and gasoline-powered
vehicles is the number of moving parts. The electric vehicle motor has one
moving part, the shaft, whereas the gasoline-powered vehicle's motor has
numerous moving parts. Fewer moving parts in the electric vehicle leads to
another important difference: the electric vehicle requires less periodic
maintenance and is more reliable. The gasoline-powered vehicle requires a wide
range of maintenance, from frequent oil changes filter replacements, periodic
tune ups, and exhaust system repairs, to the less frequent component
replacement, such as the water pump, fuel pump, alternator, etc. The electric
vehicle's maintenance requirements are fewer, and therefore the maintenance
costs are lower. The electric motor's one moving part, the shaft, is very
reliable and requires little or no maintenance. The controller and charger are
electronic devices with no moving parts, and they require little or no
maintenance. Electric vehicle batteries are sealed and are maintenance free,
However, the life of these batteries is limited, and batteries will require
periodic replacement. New batteries are being developed that will not only
extend the range of electric vehicles, but will also extend the life of the
battery pack which may eliminate the need to replace the battery pack during the
life of the vehicle.
Lawn and Garden Equipment
We have not commenced active product development in the lawn and garden
equipment product category. We plan to approach major manufacturers of these
products with regard to joint product development.
ATV's
We have completed conversion of ATV's that are now being tested. We
have also developed what we view as a next generation ATV with independent
suspension. This ATV was displayed at the Globe 2004 exposition in Vancouver,
B.C., Canada.
Current Joint Venture Negotiations in Progress
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China
Upon invitation from Geely Corporation, we and Mr. Chaz Haba have traveled to
China and met with the Motorcycle Division and the International Trade Division
of Geely Corporation. We are currently in the process of incorporating in China
to position ourselves for pursuit of joint ventures. We have signed an agreement
with Geely for a proposed joint venture and are now in the initial stages of
drafting the formal joint venture agreement.
India
We are currently in discussions with Loveson of Bombay India for the
manufacture of bicycles to be converted into electric bikes.
Powerski
On December 30, 2003 we announced that we started a joint venture with
Powerski International, to create another model of Powerski's flagship product,
the Powerski Jetboard(TM), powered with a Lithium-ion electric motor. We
anticipate testing this board during the second quarter of 2004. Upon
completion, our objective is for the board to travel at 30 to 40 MPH, for over 1
hour.
U.S. Navy
On February 5, 2004 we announced the initiation of a lithium-ion
conversion project with the United States Navy. The project will serve as a
trial, and the development and implementation of this project will take place
within our facilities in Van Nuys, California. We have funded the initial 3kw
prototype for this project, and we anticipate the prototype will be ready for
testing by the Navy in the second quarter of 2004.
Electric Cars
We are working with California-based Cinema Vehicles to develop and
build what we have designated as the "R-Car". Cinema Vehicles is the oldest and
one of the largest motion picture vehicle service companies in the world. They
have worked on major Hollywood productions such as T3 and Austin Powers. The
anticipated use for the R-Car is for medium to long-range trips, as well as
neighborhood use.
The motor was balanced, matched to a 6-speed transmission, and tested
in April 2004. Mr. Haba and his engineers have been working closely with Cinema
Vehicles regarding the mechanical aspects of this development -- we are
anticipating that this vehicle will be able to travel at speeds up to 90 mph
with a range of up to 200 miles. The vehicle is currently under testing.
Austin Energy
On March 1, 2004, we announced that a letter of understanding between
Whistler Investments, Inc. and the City of Austin had been executed in respect
to the conversion of vehicles for the City of Austin, TX, subsequent to a senior
level meeting between Mark Kapner, Senior Strategic Planner for the City of
Austin, Mr. Chaz Haba and representatives of Whistler, at their development
facility at Lithium house in Van Nuys, California.
We have purchased a 2004 Chrysler PT Cruiser -- we are commencing work
on the prototype for Austin Energy, and hope to have it ready for testing in the
second quarter of this year.
Solium Power Corp.
Our Lithium Solar House ("LSH") project will be under the direction of
Chaz Haba and is to provide a test bed for an alternative source of power to the
home -- not connected to the power grid. The power source will be Solar Panels
for charging of the Lithium Ion Batteries, which are used for storage of the
power. The system will supply DC power for the home and all appliances (using
from 12 volts to 48 volts), lighting, heat, air, etc., and will involve a site
in Van Nuys, California. We have now received the approved plan and are
currently renovating this Solar House. Construction completion and testing is
anticipated by Summer 2004.
Other Initiatives
We believe that the keys to our success in the future will be to
aggressively pursue the most opportunistic markets and to concentrate our
resources on the market(s) that have the most return for the time and effort
expended. We are in negotiations with a municipal government agency in Canada.
We have also initiated a project aimed at converting pre-existing vehicles in
Latin America to electric propulsion units. Negotiations for the conversion of
several vehicles are now underway. It is anticipated that the first conversions
will be taxi cabs located in Mexico City. Mexico City has the world's worst air
pollution, according to the United Nations, due primarily to vehicle emissions.
The zero-emission vehicle projects are aimed at reducing harmful contaminants in
the city's air, while providing usable cost-efficient alternate energy sources
in public transit vehicles.
Discussions have been commenced with United Nations officials to place
electric vehicles in the five most polluted cities in the world. If these
discussions are successfully consummated, the presence these vehicles in these
cities could lead to relationships with governments on national levels.
We are in discussions with several large chain stores, one in Europe
and several in the United States about carrying our products in their stores. We
are also evaluating using infomercials in 2004 to promote sales of our products.
Manufacturing
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We intend to manufacture the lithium power paks in China and Korea, and
to market them by way of infomercials, as well as by utilizing distributors in
Canada and the United States.
Competition
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The discussion below identifies some of our principal competitors in
the electric vehicle and bicycle areas.
The Reva Electric Car Company, based in Bangalore, India, was
incorporated in 1995 as a joint venture between the Bangalore based Maini Group
and AEVT Inc of Irvindale, California, to manufacture electric vehicles for city
mobility. This company produces a two-door sedan seating two adults in the front
and two children at the back.
ZAP, headquartered in Santa Rosa, California, is a principal competitor
in electric cars, electric bicycles, electric scooters, seascooters, and other
electric products.
Powabyke, headquartered in Bath, United Kingdom, offers a wide range of
electric bikes in the UK and worldwide.
Our Portable Power System License Agreement
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On October 21, 2003, the original Licensing Agreement between the
Company and Nu Age Electric Inc that we had entered into on June 27, 2003, was
terminated. This original Licensing Agreement covered the license to us, through
Nu Age Electric Inc., of certain of the products described below that we now
license directly from Lithium House. Each party to the amendment terminating
this licensing agreement agreed to indemnify the other party and hold it
harmless from and against any and all losses, damages, liabilities, costs and
expenses (including, but not limited to, any and all expenses reasonably
incurred in investigating or defending against any litigation commenced or
threatened or any claim whatsoever) which the indemnified Party may sustain or
incur resulting from actions of the indemnifying party in connection with that
licensing agreement or the breach by the indemnifying party of any material
representation, warranty, or covenant made by it in that licensing agreement.
On October 21, 2003, we entered into our current License Agreement with
RV Systems, Inc., a Nevada corporation, for the worldwide arena (with the
exception of India for the two- and three-wheeled vehicle technology) to sell,
distribute and/or manufacture (or arrange for the sale, distribution or
manufacture of) specified products utilizing the portable power systems (the
"Licensed Technologies"), developed by Lithium House, with principal offices
located in Van Nuys, California. Lithium House is an affiliate of RV Systems,
and has licensed all product development to RV Systems for the two-, three- and
four- wheel vehicles, watercraft, the solar house and a non-exclusive license
for battery power packs.
The License Agreement with RV Systems covers Licensed Technologies in
three separate product groups: two- and three-wheeled vehicles to be
manufactured and sold in all countries of the world except India; lawn and
garden equipment to be manufactured and sold in all countries of the world; and
Neighborhood Electric Vehicles to be manufactured and sold in all countries of
the world.
Two- and Three-Wheeled Vehicles
1. Motorcycle product - Identification/model: Stealth H (Harley type)
2. Two-Wheel Vehicle - Identification/model: Stealth V (Vespa-type
scooter)
3. Two-Wheel Bicycle - Recumbent style with motor in the front wheel and
batteries in the bicycle frame
4. Three-wheel bicycle or a three-wheel motorcycle, commonly referred to
as trikes or Tuk-Tuk's (as in the Thailand style three-wheel taxis).
Lawn and Garden Equipment
Lawn and garden will include two and four wheel electric mowers. It will also
include leaf blowers and any electric rotating lawn tool (e.g., edgers,
roto-tillers).
Neighborhood Electric Vehicles
Neighborhood electric vehicles include four wheel neighborhood electric vehicles
("NEV's")
Subject to the terms of this License Agreement, RV Systems, as
Licensor, has granted to us, during the term of the License Agreement, and upon
the terms and conditions set forth in the License Agreement, a non-assignable
right and license to market, sell, manufacture, and distribute the Licensed
Technologies in all countries of the world, with the exception of India for two-
and three-wheeled vehicles. We have the right, upon receipt of written approval
and due diligence by the Licensor, to sublicense any of the rights and licenses
granted in the License Agreement to or enter into distribution agreements with
third parties ("Sublicensees") with the written consent of Licensor to the
sublicense or distribution agreement and the approval of Licensor of the related
agreement or agreements with the particular Sublicensee, which consent or
approval shall not unreasonably be withheld.
The term of the License Agreement commenced on October 21, 2003, and
continues for a period of five License Years. NEV's were added to the Licensed
Technologies on November 14, 2003. The term is automatically renewed for three
succeeding License Years unless earlier terminated by either party upon not less
than 90 days prior written notice to the other of intent to terminate.
The Company is required to pay the Licensor the technology payments
(the "Technology Payments") (to be paid to Lithium House) as specified in the
License Agreement ($100,000 for two- and three-wheeled vehicles, and $50,000 for
lawn and garden equipment) to be paid on or before October 31, 2003. For NEV's
we are required to pay $250,000 no later than December 31, 2003, with a weekly
minimum of $15,000. We are also required to pay Licensor product development
payments of $400,000, on or before December 31, 2003, with a weekly minimum of
$15,000, for two- and three-wheeled vehicles; $200,000 for lawn and garden
equipment, on or before December 31, 2003, with a weekly minimum of $15,000; and
$1,000,000, payable no later than March 31, 2004, with a weekly minimum of
$35,000 for NEV's ("Product Development Payments"). We have signed additional
amendments to the License Agreement as of January 5 and February 2, 2004,
covering power systems for watercraft and solar houses, respectively. These
additional agreements require payments of approximately $2,000,000. As of April
30, 2004, we have paid an aggregate of $1,535,544 in license payments to RV
Systems, and are continuing weekly license fee payments of approximately
$35,000, as per a supplemental agreement with RV Systems.
As reimbursement to the Company, Licensor is required to pay to us the
proceeds from any sales by Licensor of product inventory manufactured with the
financing provided by the Product Development Payments as and when that product
inventory is sold by Licensor.
We (or our Sublicensees) are required to pay royalties to Licensor as
to be specified for each of the Licensed Technologies, or products or
applications utilizing such Licensed Technology, in the License Agreement
("Royalties"). The particular royalty payment levels are to be agreed upon when
we enter into sublicense agreements or commence manufacturing or distribution
operations ourselves. We are responsible for the collection of any Royalty
payments due from our Sublicensees and remittance of such royalty payments to
the Licensor, unless direct payment of royalties to Licensor by a Sublicensee is
provided for in the applicable Addendum to the License Agreement.
If the Company fails to make any payment due under the License
Agreement, (a) we are obligated to pay interest thereon from and including the
date such payment becomes due until the entire amount is paid in full at a rate
equal to three percent (3%) per annum over the prime rate charged by CitiBank,
N.A., New York as of the close of business on the date the payment first becomes
due, but in no event greater than the highest rate permitted by law; (b) if such
a default shall continue uncured for a period of sixty (60 days) after written
notice is received by the Company, the Licensor then shall have the right to
terminate the License Agreement immediately upon notification to us by the
Licensor to terminate. If such default is by a Sublicensee, we shall provide the
notice referred to above and shall follow Licensor's instructions as to
termination of the particular Sublicensee's rights as to the Licensed
Technologies.
We shall have the option of preventing the termination of the License
Agreement by taking corrective action that cures the default, if such corrective
action is taken prior to the end of the 60-day cure period and if there are no
other defaults during such time period. If the Licensor or the Company otherwise
fails to perform any of the material terms, conditions, agreements or covenants
in the License Agreement on its part to be performed (hereinafter referred to as
"other default") and such other default is not curable, or if such default is
curable but continues uncured for a period of sixty (60) days after notice
thereof has been given to the defaulting party in writing by the other party or
all reasonable steps necessary to cure such other default have not been taken by
the defaulting party within sixty (60) days after notice thereof has been given
to the defaulting party in writing by the other party or all reasonable steps
necessary to cure such other default have not been taken by the defaulting party
within such sixty (60) day period, the other party at its sole election may
terminate the License Agreement forthwith by written notice. If we file a
petition in bankruptcy, are adjudicated as bankrupt or file a petition or
otherwise seek relief under or pursuant to any bankruptcy, insolvency or
reorganization statute or proceeding or if a petition in bankruptcy is filed
against us, which is not vacated within sixty (60 ) days, or we become insolvent
or make an assignment for the benefit of its creditors or a custodian receiver
or trustee is appointed for us or a substantial portion of our business assets,
which is not discharged within sixty (60) days, the License Agreement by its
terms terminates automatically and forthwith. No assignee for the benefit of
creditors, custodian, trustee in bankruptcy or any official charged with taking
over custody of our assets or business shall have any right to continue the
License Agreement or to exploit or in any way use the Licensed Technologies if
the License Agreement terminates; provided, however, that a termination under
the License Agreement as to a particular Sublicensee and Licensed Technologies
to that Sublicensee would not affect the validity of the License Agreement or
our status under the License Agreement or that of other Sublicensees not in
default.
Subsidiaries
We are restructuring by putting in place three divisions, each a wholly
owned subsidiary of Whistler, incorporated after year end, and allocating the
licensing rights for the various applications into each applicable division.
Global Electric Corp will hold the licensing rights for all product development
other than four-wheeled vehicles. R-Electric Car Co. will hold the licensing
rights for product development for all four-wheeled vehicles. Solium Power Corp
will hold the rights for the advanced Lithium/Solar Power System technology
developed by Mr. Chaz Haba, for application to residential and commercial
properties.
Employees
As of the date of this report, we do not have any employees other than
our President and CEO, Holly Roseberry.
Research and Development Expenditures
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We incurred research and development expenditures of $20,268 in our
fiscal year ended January 31, 2004. We incurred no such expenditures in our
prior fiscal year.
Patents and Trademarks
Neither the Company, nor Lithium House or RV Systems, owns, either
legally or beneficially, any patents or trademarks.
Risk Factors
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You should be particularly aware of the inherent risks associated with
our business plan. These risks include but are not limited to:
WE ARE A DEVELOPMENT STAGE BUSINESS
We have had no revenues from joint ventures or sales of our products,
nor have we signed any definitive joint venture agreements to commercialize any
of our products. As of April 23, 2004, we had cash on hand of $1,201,459. As of
January 31, 2004, Whistler's liabilities totaled $695,205 and primarily
consisted of a notes payable in the amount of $553,983 due to a stockholder in
connection with the acquisition of Azra Center and advances to the Company made
by that stockholder. During the period since its inception on April 12, 2000 to
January 31, 2004, Whistler had incurred operating losses totaling $5,728,483. On
January 31, 2004, Whistler had a working capital deficiency of $525,777 and a
stockholders' deficit of $90,933.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
Our current operating funds are less than necessary to complete the
license payments to RV Systems for commercialization of products utilizing
Lithium House portable power systems under the License Agreement, and therefore
we will need to obtain additional financing in order to complete our business
plan. Our business plan will require substantial additional financing in
connection with the initial commercialization of the products under the License
Agreement.
We do not currently have any arrangements for financing and we may not
be able to find such financing if required. Obtaining additional financing would
be subject to a number of factors, including investor sentiment. Market factors
may make the timing, amount, terms or conditions of additional financing
unavailable to us.
WE HAVE BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM OUR INDEPENDENT
AUDITORS, WHICH MEANS THAT WE MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS WE
OBTAIN ADDITIONAL FUNDING
Our independent auditors have added an explanatory paragraph to their
audit opinions, issued in connection with our financial statements, which states
that our ability to continue as a going concern is uncertain. Our financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
WE ARE SUBJECT TO ALL OF THE RISKS OF A NEW BUSINESS
Because we have only recently commenced business operations, we face a
high risk of business failure. We have not earned any revenues as of the date of
this report. Potential investors should be aware of the difficulties normally
encountered by new companies and the high rate of failure of such enterprises.
The likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
commercialization of the products under the License Agreement. These potential
problems include, but are not limited to, unanticipated problems relating to
product development, problems arranging and negotiating arrangements with
sublicensees or joint venture partners, and additional costs and expenses that
may exceed current estimates. We have no history upon which to base any
assumption as to the likelihood that our business will prove successful, and
investors should be aware that there is a substantial risk that we would not
generate any operating revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely fail.
Because we have only recently commenced business operations, we expect
to incur operating losses for the foreseeable future
OUR MANAGEMENT HAS LIMITED EXPERIENCE IN PRODUCTS UTILIZING ELECTRIC BATTERY
POWER AND WITH NEGOTIATING COMMERCIAL ARRANGEMENTS FOR SUCH PRODUCTS
Our management, while experienced in business operations, has only
limited experience in negotiating sublicenses or joint ventures for and
commercializing the types of products covered by the License Agreement. As a
result of this inexperience, there is a higher risk of our being unable to
complete our business plan to negotiate profitable sublicenses or joint ventures
for our lithium ion battery powered products. Because of the intense competition
in for our licensed products under the License Agreement, there is substantial
risk that we will not successfully commercialize these products.
WE ARE CURRENTLY IN LITIGATION WITH A FORMER EMPLOYER OF CHAZ HABA
We are currently in litigation, having been served with a complaint
filed on October 15, 2003, by Michael McDermott, as a stockholder of Planet
Electric, Inc. and purportedly on behalf of Planet Electric in the United States
District Court for the Central District of California. Charles Haba, a
consultant to the Company, was one of the founders of Planet Electric and is
defendant in this case along with Lithium House and other entities. See "ITEM
3--Pending Legal Proceedings" for a description of this case.
OUR PRODUCTS WILL BE HIGHLY REGULATED
Our products in development, particularly the NEV's, are highly
regulated. There is a possibility that the regulatory review and compliance
process could consume significant time and resources and adversely affect the
timing of our bringing products to market, as well as the profitability of such
products once regulatory approvals are obtained.
OUR BUSINESS IS SUBJECT TO SUBSTANTIAL RISKS
The electric battery powered product market is extremely competitive
and risky. We are competing against numerous competitors with substantially
greater financial resources than us, and due to the difficulties of entry into
these markets, we may unsuccessful and not be able to complete our business
plan.
ITEM 2. DESCRIPTION OF PROPERTY.
Our mailing address is 5001 East Bonanza Road, Suite 144-145, Las
Vegas, Nevada, 89110, for which we pay $10 per month. We also have an office at
7126 Sophia Ave, Van Nuys CA, for which we pay monthly rent of $2,000 and an
office at 595 Hornby St. Suite 603, Vancouver, BC. Canada, for which we also pay
monthly rent of $2,000.
ITEM 3. LEGAL PROCEEDINGS.
Other than as described below, we are not a party to any material legal
proceedings and to our knowledge, no such proceedings are threatened or
contemplated. At this time we have no bankruptcy, receivership or similar
proceedings pending.
Planet Electric, Inc. Stockholder Litigation
On October 17, 2003, we were served with a complaint filed on October
15, 2003, by Michael McDermott, as a stockholder of Planet Electric, Inc. and
purportedly on behalf of Planet Electric in the United States District Court for
the Central District of California. Charles (Chaz) Haba was one of the founders
of Planet Electric, and was associated with that company from until early 2002.
The complaint lists Charles Haba, other individuals, Lithium House, Inc.,
Nupow'r LLC, Nu Age Electric, Inc., Dynamic Concepts aka NPDI, and Whistler
Investments, Inc. as defendants. The complaint seeks an injunction prohibiting
certain defendants from continuing their business relationship and transfer of
alleged Planet Electric trade secrets or processes and also seeks damages for:
patent infringement against Charles Haba, companies that Mr. Haba has been
associated with since his involvement with Planet Electric, and Whistler; breach
of fiduciary duty against Mr. Haba; breach of confidential relationship against
Mr. Haba; conversion against Mr. Haba and certain other individual defendants;
various business torts against Mr. Haba, Lithium House, NuPow'r and Nu Age;
trade secret misappropriation against all defendants.
The defendants in this action have retained counsel, and will move to
dismiss the complaint on the grounds that there is no evidence to support
plaintiffs' claims.
After consultation with Charles (Chaz) Haba, Lithium House and our
counsel, we are confident that this litigation does not pose any obstacle to
continuation of our activities in consortium with Mr. Haba, RV Systems and
Lithium House under the October 21, 2003 Distribution and Licensing Agreement
and to our commencing to implement and license the technologies covered by that
License Agreement worldwide. The lithium battery technologies licensed to us by
RV Systems were developed by Lithium House subsequent to Mr. Haba's association
with Planet Electric.
Charles Haba v. Planet Electric, Inc.
In this action, Charles Haba, is suing for breach of his employment
agreement and breach of a note against his former employer, Planet Electric,
Inc. in the Los Angeles County Superior Court. Planet Electric, Inc. has
requested leave to file a cross-complaint against same defendants as the
above-mentioned shareholder derivative suit, including Whistler Investments,
Inc. The proposed cross-complaint adds claims for conversion and conspiracy to
convert assets of Planet Electric, Inc. assets against Whistler Investments,
Inc. As the claims brought by Planet Electric, Inc. in this State Court action
are nearly identical to those of the shareholder derivative suit, it is not
likely that the courts will allow both to proceed to trial. In any event, we do
not believe there is any merit to the claims against Whistler Investments, Inc.
and will seek a dismissal at the earliest opportunity.
Whistler Investments, Inc. v. McLane, et al.
On March 12, 2004, Whistler Investments, Inc. filed suit in the Los
Angeles County Superior Court against Rod McLane, Meridian Capital Fund, LLC,
Andreas Behrens, International Business Consultants GmbH, Herb Perman, Steve
Lipman, Coventry Windsor, Inc., Chicago Investment Group, LLC, and Bill Fritts.
The lawsuit arises out of defendants taking of 1,125,000 shares of Whistler
Investments, Inc. to hold as security for a loan. Defendants never funded the
loan and have refused to return the shares. The lawsuit seeks a return of said
shares or a cancellation of such shares or monetary damages or $14,850,000.00 as
well as punitive damages. In addition, the lawsuit seeks $120,000 in damages for
the breach of the loan agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to our security holders for a vote during the fourth
quarter of our fiscal year ending January 31, 2004.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Our shares of common stock trade have traded on the NASD OTC Bulletin Board
since March 4, 2002. The OTC Bulletin Board is a network of security dealers who
buy and sell stock. A computer network that provides information on current
"bids" and "asks", as well as volume information, connects the dealers. The
following table sets forth the high and low closing prices of our common shares
traded on the OTC Bulletin Board:
Period High Low
- ------ ---- ---
March 4, 2002 to April 30, 2002 no trades
May 1, 2002 to July 31, 2002 $1.07 $0.20
August 1, 2002 to October 31, 2002 $1.01 $0.08
November 1, 2002 to January 31, 2003 $0.14 $0.08
February 1, 2003 to April 30, 2003 $0.30 $0.08
May 1, 2003 to July 10, 2003 $0.29 $0.08
July 11, 2003 to July 31, 2003* $4.00 $1.29
August 1, 2003 to October 31, 2003 $7.00 $3.65
November 1, 2003 to January 31, 2004 $8.50 $3.65
February 1, 2004 to March 9, 2004 $12.35 $7.90
March 10, 2004 to April 23, 2004** $7.39 $3.45
- -------------
* Following ten-for-one reverse split effective July 11, 2003
** Following three-for-one forward split effective March 10, 2004
The above quotations are taken from information provided by Canada Stockwatch
and reflect inter-dealer prices, without retail mark-up, mark-down or commission
and may not represent actual transactions.
Holders of Common Stock
As of April 12, 2004, we had 31 holders of record of our common stock.
Dividends
Our current policy is to retain any earnings in order to finance the expansion
of our operations. Our board of directors will determine future declaration and
payment of dividends, if any, in light of the then-current conditions they deem
relevant and in accordance with the Nevada Revised Statutes.
Recent Sales of Unregistered Securities
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
Date Title and Amount Purchasers Principal Total Offering
- ---- ---------------- ---------- ---------- --------------
Underwriter Price/Underwriting Discounts
----------- ----------------------------
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
April 15, 2002 40,000,000 shares of Common Salim S. Rana NA NA
Stock issued to the vendor of Investments Corp.
the Azra Shopping Center.*
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
8/12/03 11,250,000 shares of Common International NA NA
Stock issued in escrow to in Business
connection with proposed Consultants GMBH
financing transaction*
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
12/09/03 1,250 shares of Common Stock* Consultant NA $1.12 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
12/09/03 1,250 shares of Common Stock* Consultant NA $1.12 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
1/14/03 2,5000 shares of Common Stock* Consultant NA $2.17 per share/NA
- -------------------- -------------------------------- --------------------- ------------------- ------------------------------
*These shares were issued pursuant to Section 4(2) of the Securities Act and are
restricted shares as defined in the Securities Act.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information with respect to our common
stock issued and available to be issued under outstanding options, warrants and
rights.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
(a) (b) (c)
Plan category Number of securities to be Weighted-average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance under
warrants and rights rights equity compensation plans
(excluding securities
reflected in column (a))
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders 1,214,000 $.75 -0-
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 1,214,000 $.75 -0-
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This annual report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this section.
Results Of Operations for the Year Ended January 31, 2004
We incurred a net loss of $4,829,599 for the year ended January 31, 2004
including $4,394,000 in stock based compensation relating to our grant of stock
options to employees during the quarter, management fees of $178,996, general
and administrative costs of $97,515, professional fees of $87,635, $16,304 in
rent and office costs, and $14,195 in depreciation expense relating to computer
equipment, furniture interest expense of $24,070, and fixtures.
Our net loss for the twelve-month period ended January 31, 2004 increased
substantially from the comparative period in fiscal 2003 (from $825,493 in 2003
to $4,829,599 in 2004). This was primarily due to the previously mentioned stock
based compensation in 2004 recorded at $4,394,000, compared with none in 2003,
and increases in administrative costs from $23,082 in 2003 to $97,515 in 2004,
and management and consulting fees from $11,500 in 2003 to $178,996 in 2004,
resulting from a general increase in our business activities. We also incurred
interest expense of $24,070 related to amounts owing on overdue notes payable to
related parties.
PLAN OF OPERATION
During the period since inception on April 12, 2000 to January 31, 2004, we have
incurred operating losses aggregating $5,728,483. At January 31, 2004, we had a
working capital deficiency of $525,777 and a stockholders' deficit of $90,933.
The continuation of the Company as a going concern is dependent upon the
continued financial support from our shareholders and other related parties, our
ability to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. Our auditors have expressed substantial
doubt concerning our ability to continue as a going concern.
As of January 31, 2004, we had cash on hand of $169,428. Our liabilities at the
same date totaled $695,205 and consisted primarily of accounts payable and
accrued liabilities of $133,017 and a related party payable of $553,983. The
related party payable consisted primarily of a payable due to SSRI, in
connection with our previous acquisition of the Azra shopping center and
advances to the Company by the related party. We anticipate that our
administrative costs and expenses to acquire the licenses from RV Systems, Inc.
over the next 12-month period will be in excess of $2,000,000, if we secure
rights to all licensed products. We do not have sufficient cash on hand to meet
these anticipated obligations.
Distribution and Licensing Agreement With RV Systems, Inc.
On October 21, 2003, we entered into the new License Agreement with RV
Systems for the worldwide arena (with the exception of India for the two- and
three-wheeled vehicle technology) to sell, distribute and/or manufacture (or
arrange for the sale, distribution or manufacture of) specified products
utilizing the portable power systems (the "Licensed Technologies"), developed by
Lithium House. Lithium House is an affiliate of RV Systems, and has licensed all
product development to RV Systems for products and applications of portable
power systems utilizing Lithium House's proprietary lithium battery technology.
The License Agreement with RV Systems covers Licensed Technologies in three
separate product groups: two- and three-wheeled vehicles to be manufactured and
sold in all countries of the world except India; lawn and garden equipment to be
manufactured and sold in all countries of the world; and NEV's to be
manufactured and sold in all countries of the world.
Subject to the terms of the License Agreement, RV Systems, as Licensor,
has granted to us, during the term of the License Agreement, and upon the terms
and conditions set forth in the License Agreement, a non-assignable right and
license to market, sell, manufacture, and distribute the Licensed Technologies
in all countries of the world, with the exception of India for two- and
three-wheeled vehicles. We have the right, upon receipt of written approval and
due diligence by the Licensor, to sublicense any of the rights and licenses
granted in the License Agreement to or enter into distribution agreements with
third parties ("Sublicensees") with the written consent of Licensor to the
sublicense or distribution agreement and the approval of Licensor of the related
agreement or agreements with the particular Sublicensee, which consent or
approval shall not unreasonably be withheld.
The term of the License Agreement commenced on October 21, 2003, and
continues for a period of five License Years. NEV's were added to the Licensed
Technologies on November 14, 2003. The term is automatically renewed for three
succeeding License Years unless earlier terminated by either party upon not less
than 90 days prior written notice to the other of intent to terminate.
The Company is required to pay the Licensor the technology payments
(the "Technology Payments") (to be paid to Lithium House) as specified in the
License Agreement ($100,000 for two- and three-wheeled vehicles, and $50,000 for
lawn and garden equipment) to be paid on or before October 31, 2003, which
payments have been made. For NEV's we are required to pay $250,000 no later than
December 31, 2003, with a weekly minimum of $15,000. We are also required to pay
Licensor product development payments of $400,000, on or before December 31,
2003, with a weekly minimum of $15,000, for two- and three-wheeled vehicles;
$200,000 for lawn and garden equipment, on or before December 31, 2003, with a
weekly minimum of $15,000; and $1,000,000, payable no later than March 31, 2004,
with a weekly minimum of $35,000 for NEV's ("Product Development Payments"). We
have signed additional amendments to the License Agreement as of January 5 and
February 2, 2004, covering power systems for watercraft and solar houses,
respectively. These additional agreements require payments of approximately
$2,000,000. As of April 30, 2004, we have paid an aggregate of $1,535,544 in
license payments to RV Systems, and are continuing weekly license fee payments
of approximately $35,000, as per a supplemental letter agreement with RV
Systems. As reimbursement to the Company, Licensor is required to pay to us the
proceeds from any sales by Licensor of product inventory manufactured with the
financing provided by the Product Development Payments as and when that product
inventory is sold by Licensor.
Commercial Initiatives
China
Upon invitation from Geely Corporation, we and Mr. Chaz Haba of Lithium
House have traveled to China and met with the Motorcycle Division and the
International Trade Division of Geely Corporation. We are currently in the
process of incorporating in China to position ourselves for pursuit of joint
ventures. We have signed an agreement with Geely for a proposed joint venture
and are now in the initial stages of drafting the formal joint venture
agreement.
India
We are currently in discussions with Loveson of Bombay India for the
manufacture of bicycles to be converted into electric bikes.
Powerski
On December 30, 2003 we announced that we started a joint venture with
Powerski International, to create another model of Powerski's flagship product,
the Powerski Jetboard(TM), powered with a Lithium-ion electric motor. We
anticipate testing this board during the second quarter of 2004. Upon
completion, our objective is for the board to travel at 30 to 40 MPH, for over 1
hour.
U.S. Navy
On February 5, 2004 we announced the initiation of a lithium-ion
conversion project with the United States Navy. The project will serve as a
trial, and the development and implementation of this project will take place
within our facilities in Van Nuys, California. We have funded the initial 3kw
prototype for this project, and we anticipate the prototype will be ready for
testing by the Navy in the second quarter of 2004.
Electric Cars
We are working with California-based Cinema Vehicles to develop and
build what we have designated as the "R-Car". Cinema Vehicles is the oldest and
one of the largest motion picture vehicle service companies in the world. They
have worked on major Hollywood productions such as T3 and Austin Powers. The
anticipated use for the R-Car is for medium to long-range trips, as well as
neighborhood use.
The motor was balanced, matched to a 6-speed transmission, and tested
in April 2004. Mr. Haba and his engineers have been working closely with Cinema
Vehicles regarding the mechanical aspects of this development -- we are
anticipating that this vehicle will be able to travel at speeds up to 90 mph
with a range of up to 200 miles. The vehicle is currently under testing.
Austin Energy
On March 1, 2004, we announced that a letter of understanding between
Whistler Investments, Inc. and the City of Austin had been executed in respect
to the conversion of vehicles for the City of Austin, TX, subsequent to a senior
level meeting between Mark Kapner, Senior Strategic Planner for the City of
Austin, Mr. Chaz Haba and representatives of Whistler, at their development
facility at Lithium house in Van Nuys, California.
We have purchased a 2004 Chrysler PT Cruiser -- we are commencing work
on the prototype for Austin Energy, and hope to have it ready for testing in the
second quarter of this year.
Solium Power Corp.
Our Lithium Solar House ("LSH") project will be under the direction of
Chaz Haba and is to provide a test bed for an alternative source of power to the
home -- not connected to the power grid. The power source will be Solar Panels
for charging of the Lithium Ion Batteries, which are used for storage of the
power. The system will supply DC power for the home and all appliances (using
from 12 volts to 48 volts), lighting, heat, air, etc., and will involve a site
in Van Nuys, California. We have now received the approved plan and are
currently renovating this Solar House. Construction completion and testing is
anticipated by Summer 2004.
We believe that the keys to our success in the future will be to
aggressively pursue the most opportunistic market(s) and to concentrate our
resources on the market(s) that have the most return for the time and effort
expended. We are in negotiations with a municipal government agency in Canada.
We have also initiated a project aimed at converting pre-existing vehicles in
Latin America to electric propulsion units. Negotiations for the conversion of
several vehicles are now underway. It is anticipated that the first conversions
will be taxi cabs located in Mexico City. Mexico City has the world's worst air
pollution, according to the United Nations, due primarily to vehicle emissions.
The zero-emission vehicle projects are aimed at reducing harmful contaminants in
the city's air, while providing usable cost-efficient alternate energy sources
in public transit vehicles.
We are in discussions with several large chain stores, one in Europe
and several in the United States about carrying our products in their stores. We
are also evaluating using infomercials in 2004 to promote sales of our products.
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. We expect to finance
operations through the sale of equity in the foreseeable future as we do not
receive revenue from our current business operations. There is no guarantee that
we will be successful in arranging financing on acceptable terms.
On January 20, 2004, we announced agreement for a $10 million equity
line with Boston-based Dutchess Private Equities Fund, LP. We currently intend
to file the necessary registration documents with the SEC.
On February 24, 2004, we announced receipt of $1 million dollars of a
$3 million dollar non-recourse loan to be collateralized by stock. On April 14,
2004, we drew down an additional $1,000,000 on this loan, and on April 22, 2004,
we drew down the final $1,000,000 of the loan.
The Company intends to hold a special meeting of shareholders' upon
approval of the information circular we have filed with the Securities and
Exchange Commission, to increase our authorized common stock, so as to have
additional stock available for equity financing, if required.
We have raised equity capital through issuances of common stock and
debt. During the year ended January 31, 2004, we received proceeds of $589,500
from the exercise of stock options and $150,000 from the issuance of common
stock.
At January 31, 2004, we had $169,428 cash on hand. Our ability to raise
additional capital is affected by trends and uncertainties beyond our control.
Our current operating funds are less than necessary to complete the
license payments to RV Systems for commercialization of products utilizing
Lithium House portable power systems under the License Agreement, and therefore
we will need to obtain additional financing in order to complete our business
plan. Our business plan will require substantial additional financing in
connection with the initial commercialization of the products under the License
Agreement. We anticipate that our administrative costs and expenses to
acquire the licenses from RV Systems, Inc. over the next 12-month period
will be in excess of $2,000,000, if we secure rights to all licensed products.
We do not currently have any arrangements for financing and we may not
be able to find such financing if required. Obtaining additional financing would
be subject to a number of factors, including investor sentiment. Market factors
may make the timing, amount, terms or conditions of additional financing
unavailable to us.
Our auditors are of the opinion that our continuation as a going
concern is in doubt. Our continuation as a going concern is dependent upon
continued financial support from our shareholders and other related parties.
ITEM 7. FINANCIAL STATEMENTS.
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
January 31, 2004
Whistler Investments, Inc.
(A Development Stage Company)
Financial Statements
Page:
Report of Independent Auditors F-1
Balance Sheets
as of January 31, 2004 and January 31, 2003 F-2
Statements of operations
for the years ended January 31, 2004 and January 31, 2003 F-3
Statements of cash flows
for the years ended January 31, 2004 and January 31, 2003 F-4
Statement of changes in stockholders' deficit
for the period from Inception to January 31, 2004 F-5
Notes to the financial statements F-6
Independent Auditor's Report
To the Board of Directors and Stockholders
of Whistler Investments, Inc.
Las Vegas, Nevada
We have audited the accompanying balance sheet of Whistler Investments, Inc. (a
development stage company) as of January 31, 2004, and the related statements of
operations, accumulated deficit, cash flows, and stockholders' equity for the
year then ended. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Whistler
Investments, Inc. as of January 31, 2003, were audited by other auditors, whose
report dated April 29, 2003 was modified because of a going concern uncertainty.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Whistler Investments, Inc. as
of January 31, 2004, and the results of its operations and its cash flows for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has continued development stage losses,
negative working capital, and stockholders' deficit. These conditions raise
substantial doubt about its ability to continue as a going concern. Management
plans regarding those matters also are described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Mason Russell West, LLC
Littleton, Colorado
April 15, 2004
F-1
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in US Dollars)
January 31, January 31,
2004 2003
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ 169,428 $ 104
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 169,428 104
PROPERTY AND EQUIPMENT (Note 3) 3,219 5,639
INTANGIBLE ASSETS
Licensing fees (Notes 4 and 7) 431,625 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 604,272 $ 5,743
============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT
Accounts payable and accrued liabilities $ 133,017 $ 30,467
Due to related parties (Note 5) 553,983 378,860
Advances payable (Note 8) 8,205 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 695,205 409,327
- ----------------------------------------------------------------------------------------------------------------------------
Contingencies and Commitments (Notes 1 and 7)
STOCKHOLDERS' EQUITY (DEFICIT)
PREFERRED STOCK, $0.001 par value per share
Authorized - 5,000,000 shares
Issued - Nil - -
COMMON STOCK, $0.001 par value per share
Authorized - 21,000,000 shares
Issued - 20,416,677 shares (Fiscal 2003 - 14,535,000) 20,417 14,535
ADDITIONAL PAID IN CAPITAL 5,933,133 480,765
SUBSCRIPTION RECEIVABLE (Note 6(a)) (50,000) -
DEFERRED COMPENSATION (Note 6(b)) (266,000) -
DEFICIT (5,728,483) (898,884)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' DEFICIT (90,933) (403,584)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 604,272 $ 5,743
============================================================================================================================
F-2
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in US Dollars)
Accumulated from
April 12, 2000
Year Ended Year Ended (Date of Inception)
January 31, January 31, to January 31,
2004 2003 2004
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES
Depreciation and amortization $ 14,195 $ 1,864 $ 18,586
Management and consulting fees (Note 5(a)) 178,996 11,500 192,996
General and administrative 97,515 23,082 122,648
Professional fees 87,635 20,358 162,069
Rent and office 16,304 6,620 36,450
Write-off of mineral property - 5,150 5,150
Research and development 20,268 - 20,268
Stock-based compensation (Note 2(i)) 4,394,000 - 4,394,000
- ----------------------------------------------------------------------------------------------------------------------------
4,808,913 68,574 4,952,167
INTEREST EXPENSE 24,070 - 24,070
OTHER (INCOME) (3,384) (105) (4,778)
- ----------------------------------------------------------------------------------------------------------------------------
NET LOSS BEFORE DISCONTINUED OPERATIONS (4,829,599) (68,469) (4,971,459)
LOSS FROM DISCONTINUED OPERATIONS (Note 9) - (757,024) (757,024)
- ----------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD $ (4,829,599) $ (825,493) $ (5,728,483)
============================================================================================================================
Net Loss Before Discontinued Operations $ (0.29) $ (0.01)
Loss from Discontinued Operations $ - $ (0.06)
Net Loss Per Share - Basic and Diluted $ (0.29) $ (0.07)
Weighted average number of common shares outstanding 16,689,000 12,036,000
F-3
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in US Dollars)
Accumulated from
April 12, 2000 (Date
Year Ended Year Ended of Inception) to
January 31, January 31, January 31,
2004 2003 2004
- -----------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period $ (4,829,599) $ (825,493) $ (5,728,483)
Adjustments to reconcile net loss to cash
Depreciation and amortization 14,195 1,864 18,586
Donated rent - 6,000 6,000
Write-off of mineral property - 5,150 5,150
Stock-based compensation 4,394,000 - 4,394,000
Loss from discontinued operations - 757,024 757,024
Expenses settled with the issuance of common stock 8,750 - 8,750
Changes in operating assets and liabilities
Increase in accounts payable and accrued liabilities 102,551 22,385 133,018
Increase in advances payable 8,205 - 8,205
Increase in amounts due to related parties 175,122 21,836 196,958
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Operating Activities (126,776) (11,234) (200,792)
- -----------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of licensing rights (443,400) - (443,400)
Purchase of mineral properties - - (5,150)
Purchase of property and equipment - - (10,030)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities (443,400) - (458,580)
- -----------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from exercise of stock options 589,500 - 589,500
Proceeds from issuance of common stock 150,000 - 239,300
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activities 739,500 - 828,800
- -----------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH 169,324 (11,234) 169,428
CASH, BEGINNING OF PERIOD 104 11,338 -
- -----------------------------------------------------------------------------------------------------------------------------
CASH, END OF YEAR $ 169,428 $ 104 $ 169,428
=============================================================================================================================
NON-CASH FINANCING AND INVESTING ACTIVITIES
Issuance of common stock for financing agreement 3,375,000 - 3,375,000
Issuance of common stock - 400,000 400,000
Assumption of mortgage payable - 377,960 377,960
Promissory note payable - 20,396 20,936
Expenses settled with issuance of common stock 8,750 - 8,750
SUPPLEMENTAL DISCLOSURES
Interest paid - - -
Income taxes paid - - -
F-4
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in US Dollars)
Additional
Common Stock Paid In Subscription Deferred Accumulated
Shares Amount Capital Receivable Compensation Deficit Total
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, April 12, 2000 (Date of
Inception) - $ - $ - $ - - $ - $ -
Issuance of stock for cash 2,535,000 2,535 86,765 - - - 89,300
Net loss for the period - - - - - (7,773) (7,773)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2001 2,535,000 2,535 86,765 - - (7,773) 81,527
Net loss for the year - - - - - (65,618) (65,618)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2002 2,535,000 2,535 86,765 - - (73,391) 15,909
Non-cash issuance of common stock
(Note 9) 12,000,000 12,000 388,000 - - - 400,000
Net loss for the year - - - - - (814,343) (814,343)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, as at January 31, 2003 14,535,000 14,535 474,765 - - (887,734) (398,434)
Prior Period Adjustment (Note 11) - - 6,000 - - (11,150) (5,150)
- ---------------------------------------------------------------------------------------------------------------------------
Restated 14,535,000 14,535 480,765 - - (898,884) (403,584)
Non-cash issuance of common stock 3,375,000 3,375 (3,375) - - - -
Issuance of common stock for cash 141,177 141 199,859 (50,000) - - 150,000
Issuance of common stock from
exercise of stock options 2,358,000 2,358 587,142 - - - 589,500
Expenses settled with common stock 7,500 8 8,742 - - - 8,750
Non-employee stock-based compensation - - 4,660,000 - (4,660,000) - -
Amortization of deferred stock
compensation - - - - 4,394,000 - 4,394,000
Net loss for the year - - - - - (4,829,599) (4,829,599)
- ----------------------------------------------------------------------------------------------------------------------------
Balance, as at January 31, 2004 20,416,667 $20,417 $5,933,133 $ (50,000) $ (266,000) $(5,728,483)$ (90,933)
============================================================================================================================
F-5
(The accompanying notes are an integral part of these financial statements)
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 1 - NATURE OF OPERATIONS
The Company was incorporated in the State of Nevada, USA on April 12, 2000 under
the name Whistler Investments, Inc. The Company's principal business was the
exploration and development of mineral resources; however, during the period the
Company abandoned its mineral property and currently does not have an operating
business (see Note 9).
These financial statements have been prepared on a going concern basis, which
implies the Company will continue to realize its assets and discharge its
liabilities in the normal course of business. The Company has neither a history
of earnings nor has it paid any dividends and it is unlikely to pay dividends or
enjoy earnings in the immediate or foreseeable future. During the period since
inception on April 12, 2000 to January 31, 2004, the Company has incurred
operating losses aggregating $5,728,483. At January 31, 2004, the Company has a
working capital deficiency of $525,777 and a stockholders' deficit of $90,933.
The continuation of the Company as a going concern is dependent upon the
continued financial support from its shareholders and other related parties, the
ability of the Company to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. There is no assurance
that the Company will successfully acquire businesses or assets that will
produce a profit. Moreover, if a potential business or asset is identified which
warrants acquisition or participation, additional funds may be required to
complete the acquisition or participation and the Company may not be able to
obtain such financing on terms which are satisfactory to the Company. There is
substantial doubt concerning the Company's ability to continue as a going
concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.
On January 19, 2004, the Company entered into an Investment Agreement and a
Registration Rights Agreement ("the Agreement") with Dutchess Private Equities
Fund, L.P. (Dutchess). Pursuant to the Agreement, the Company may periodically
"put" or require Dutchess to purchase shares of common stock at below market
prices in exchange for the utilization of a ten million dollar equity line of
financing. The Agreement requires the Company to file an SB-2 Registration
Statement with the Securities and Exchange Commission to register for resale by
Dutchess the shares of common stock purchased. The Registration Statement must
be filed within 30 days of the issuance of the Company's audited financial
statements for the fiscal year ended January 31, 2004.
Subsequent to year-end, the Company received one million dollars of a three
million dollar financing from Sterling Capital, Inc. for the development of
specific products for various customers (see Note 12(b)).
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
a) Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments, which are readily
convertible into cash with maturities of three months or less when
acquired.
b) Use of Estimates
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those
estimates.
c) Intangible Assets
Intangible assets consist of a Product Licensing Agreement, which is
amortized on a straight-line basis over five years. The carrying value of
the License is evaluated annually to determine if there were events or
circumstances, which would indicate a possible inability to recover the
carrying amount. Where an impairment loss has been determined the carrying
amount is written-down to fair market value.
F-6
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Long-Lived Assets
In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
of Long Lived Assets", the carrying value of intangible assets and other
long-lived assets is reviewed on a regular basis for the existence of facts
or circumstances that may suggest impairment. The Company recognizes an
impairment when the sum of the expected undiscounted future cash flows is
less than the carrying amount of the asset. Impairment losses, if any, are
measured as the excess of the carrying amount of the asset over its
estimated fair value.
e) Property and Equipment
Capital assets consist of computer equipment and furniture and fixtures,
are recorded at cost and are depreciated over their estimated useful life
on a declining balance basis at a rate of 30% and 20% respectively per
annum.
f) Foreign Currency Translation
The financial statements are presented in United States dollars in
accordance with Financial Accounting Standards Board ("FASB") Statement of
Financial Accounting Standard ("SFAS") No. 52, "Foreign Currency
Translation". Foreign denominated monetary assets and liabilities are
translated to United States dollars using foreign exchange rates in effect
at the balance sheet date. Non-monetary items are translated at historical
exchange rates, except for items carried at market value, which are
translated at the rate of exchange in effect at the balance sheet date.
Revenues and expenses are translated at average rates of exchange during
the period. Exchange gains or losses arising on foreign currency
translation are included in the determination of operating results for the
period.
g) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with SFAS
No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of
both basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common stockholders (numerator) by the weighted average number of common
shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the
period including stock options, using the treasury stock method, and
convertible preferred stock, using the if-converted method. In computing
Diluted EPS, the average stock price for the period is used in determining
the number of shares assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive.
h) Financial Instruments
The fair value of cash, accounts payable, accrued liabilities, and amounts
due to related parties approximates their carrying values due to the
immediate or short-term maturity of these financial instruments.
i) Stock Based Compensation
The Company accounts for stock-based awards using the intrinsic value
method of accounting in accordance with Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25). Under the
intrinsic value method of accounting, compensation expense is recognized if
the exercise price of the Company's employee stock options is less than the
market price of the underlying common stock on the date of grant.
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," (SFAS 123), established a fair value based
method of accounting for stock-based awards. Under the provisions of SFAS
123, companies that elect to account for stock-based awards in accordance
with the provisions of APB 25 are required to disclose the pro forma net
income (loss) that would have resulted from the use of the fair value based
method under SFAS 123.
F-7
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
i) Stock Based Compensation (continued)
During the year, the Company adopted the disclosure requirements of
Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure an Amendment of FASB
Statement No. 123" (SFAS 148), to require more prominent disclosures in
both annual and interim financial statements regarding the method of
accounting for stock-based employee compensation and the effect of the
method used on reported results.
The pro forma information is as follows:
Year Ended
January 31,
2004 2003
$ $
Net loss -- as reported (4,829,599) (825,493)
Add: Stock-based compensation expense included in net loss -- as
reported 4,394,000 -
Deduct: Stock-based compensation expense determined under fair
value method (4,439,960) -
Net loss -- pro forma (4,875,559) (825,493)
Net loss per share (basic and diluted) -- as reported (0.29) (0.07)
Net loss per share (basic and diluted) -- pro forma (0.29) (0.07)
Among other factors, the Black-Scholes model considers the expected life of
the option and the expected volatility of the Company's stock price in
arriving at an option valuation. For pro forma purposes, the estimated fair
value of the Company's stock-based awards is amortized over the vesting
period of the underlying instruments. For the year ended January 31, 2004,
the fair value of options granted using Black-Scholes was determined using
the following weighted average assumptions.
Expected dividend yield 0%
Risk-free interest rate 1-5%
Expected volatility 100%
Expected life from the vesting date (in years) 1.0
j) New Accounting Pronouncements
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). The requirements of SFAS No. 150 apply to issuers'
classification and measurement of freestanding financial instruments,
including those that comprise more than one option or forward contract.
SFAS No. 150 does not apply to features that are embedded in a financial
instrument that is not a derivative in its entirety. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatory redeemable
financial instruments of non-public entities. It is to be implemented by
reporting the cumulative effect of a change in an accounting principle for
financial instruments created before the issuance date of SFAS No. 150 and
still existing at the beginning of the interim period of adoption.
Restatement is not permitted. The adoption of this standard did not have a
material effect on the Company's results of operations or financial
position.
F-8
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
k) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for
the reporting and display of comprehensive loss and its components in the
financial statements. As at January 31, 2004 and 2003, the Company has no
items that represent comprehensive loss and, therefore, has not included a
schedule of comprehensive loss in the financial statements.
l) Research and Development
The Company expenses research and development costs as incurred.
NOTE 3 - PROPERTY AND EQUIPMENT
January 31, January 31,
2004 2003
Accumulated Net Book Net Book
Cost Amortization Value Value
---------------------------------------------------------------------
Furniture and fixtures $ 4,819 $ 2,815 $ 2,004 $ 3,084
Computer equipment 5,211 3,996 1,215 2,555
---------------------------------------------------------------------
$ 10,030 $ 6,811 $ 3,219 $ 5,639
=====================================================================
NOTE 4 - INTANGIBLE ASSET
January 31, January 31,
2004 2003
Accumulated Net Book Net Book
Cost Amortization Value Value
---------------------------------------------------------------------
License fees (See Note 7) $443,400 $ 11,775 $431,625 $153,075
=====================================================================
NOTE 5 - RELATED PARTY TRANSACTIONS
a) The Company incurred management fees of $19,365 (2003 - $11,500) to an
officer during the years ended January 31, 2004 and 2003,respectively.
b) The Company agreed to assume debt in the amount of $377,960 owing to a
related party as part of a share purchase agreement (see Note 9). The debt
is non-interest bearing and was to be repaid as to $200,000 on January 31,
2003 and $200,000 on January 31, 2004. Late payments are subject to simple
interest payable on the overdue principal at a fixed rate of 10% per annum,
calculated in advance monthly commencing on the day after a principal
payment is due. The Company recorded interest expense of $24,070 for the
year ended January 31, 2004.
NOTE 6 - STOCKHOLDERS' EQUITY
a) Common Shares
i) During the quarter ended October 31, 2003, the Company issued 3,375,000
(split adjusted) restricted common shares to RS International
Consultants GMBH ("RS"), an international business consulting company,
pursuant to a $5,000,000 financing agreement. The financing agreement
has not closed and the Company has not obtained any financing from RS.
The Company is actively pursuing the return of the restricted common
shares.
F-9
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 6 - STOCKHOLDERS' EQUITY (continued)
a) Common Shares (continued)
ii) During the final quarter ended January 31, 2004, the Company issued
141,177 common shares at $1.42 per share for total proceeds of
$200,000. A balance of $50,000 was uncollected as of January 31, 2004
and is recorded as a reduction of stockholders' equity.
iii) During the year ended January 31, 2004 the Company issued 2,358,000
common shares resulting from the exercise of stock options for total
proceeds of $589,500.
iv) During the final quarter ended January 31, 2004, the Company issued
7,500 common shares for consulting services with a fair value of
$8,750.
v) During the quarter ended July 31, 2003 the Company's Board of Directors
approved a one for ten reverse stock split of common shares that was
effective July 11, 2003. All share amounts have been retroactively
adjusted to reflect the reverse stock split.
b) Deferred Compensation
In connection with the grant of certain stock options to employees during
the year ended January 31, 2004, the Company recorded deferred stock
compensation of $4,660,000, representing the difference between the fair
value of common stock for accounting purposes and the option exercise price
of the respective stock options at the date of grant. The deferred
compensation is presented as a reduction of stockholders' equity and
amortized over the vesting period of stock options on a straight-line
basis. During the year ended January 31, 2004, the Company amortized
$4,394,000 of deferred compensation that has been recorded as stock based
compensation and charged to operations.
c) 2003 Stock Option Plan
The Company established the 2003 Restricted Stock Plan ("the Plan') during
the year and filed an S-8 Registration Statement with the U.S. Securities
and Exchange Commission that was declared effective. The plan allows the
Company's Board of Directors to issue up to 2,000,000 common shares
pursuant to the Plan as compensation for services rendered to the Company.
The Company's Board of Directors has discretion to set the price, term,
vesting schedules, and other terms and conditions for options granted under
the plan.
A summary of the Company's stock option activity is as follows:
Weighted
average
exercise
Number of price
shares $
---------------------------------------------------------------------------------------------------------------
Balance, January 31, 2003 - -
Options granted 3,285,000 0.25
Options exercised (2,358,000) 0.25
Options cancelled/expired - -
---------------------------------------------------------------------------------------------------------------
Balance, January 31, 2004 927,000 0.25
---------------------------------------------------------------------------------------------------------------
Exercisable at end of year 399,900 0.25
---------------------------------------------------------------------------------------------------------------
F-10
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 6 - STOCKHOLDERS' EQUITY (continued)
c) 2003 Stock Option Plan (continued)
Additional information regarding options outstanding as at January 31, 2004
is as follows:
Outstanding Exercisable
-------------------------------------------------- ----------------------------------
Weighted
average Weighted
remaining average Weighted average
Exercise prices Number of contractual exercise price exercise price
$ shares life (years) $ Number of shares $
0.25 927,000 4.5 0.25 399,900 0.25
---------------------------------------------------------------------------------------
The fair value for options granted was estimated at the date of grant using
the Black-Scholes option-pricing model. Under the Black-Scholes
option-pricing model, the weighted average fair value of stock options
granted during the year was $1.43. There was no dilutive impact of
potential common shares associated with stock options, by application of
the treasury stock method, for the year ended January 31, 2004, as the
Company had a net loss.
NOTE 7 - COMMITMENTS
On October 21, 2003 the Company terminated the licensing agreement with NuAge
Electric Inc. in which the Company acquired 100% of the licensing rights related
to the manufacture and sale of electric vehicles and products using proprietary
technology, subject to a 20% royalty.
On the same date the Company entered into a new Distribution and Licensing
Agreement ("the Agreement") with RV Systems, Inc. ("RV"), a Nevada corporation,
to sell, distribute and/or manufacture specified products and applications of
portable power systems (the "Licensed Technologies"). The Licensed Technologies
were developed by Lithium House, Inc., an affiliate of RV, and has licensed all
product development to RV for products and applications of portable power
systems. The term of the Agreement commenced on October 21, 2003, and continues
for a period of five years and is automatically renewed for three years unless
terminated by either party with a minimum of ninety days written notice. The
Company was required to make license payments to Lithium House as specified in
the Agreement. The Company made required payments totalling $150,000 as of
October 31, 2003 and was required to pay for specified licensed products
$250,000 no later than December 31, 2003, with a weekly minimum of $15,000. Also
pursuant to the Agreement the Company was required to pay Product Development
Payments of $400,000, on or before December 31, 2003, with a weekly minimum of
$15,000, for two- and three-wheeled vehicles; $200,000 for lawn and garden
equipment, on or before December 31, 2003, with a weekly minimum of $15,000; and
$1,000,000, payable no later than March 31, 2004, with a weekly minimum of
$35,000 for neighbourhood electric vehicles. As reimbursement to the Company,
the Licensor was required to pay proceeds from any sales of product inventory
manufactured with the financing provided by the Product Development Payments.
On February 3, 2004, the Company and RV agreed to an amendment to the Agreement
requiring minimum weekly payments of $35,000 towards all license payments owing
to date. As a result the Company is not in default of its payment obligations to
RV.
F-11
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 7 - COMMITMENTS (continued)
Annual obligations under the Agreement are as follows:
Year Ended January 31,
2005 1,820,000
2006 1,820,000
2007 1,820,000
2008 1,820,000
2009 1,820,000
---------
9,100,000
=========
Litigation
On October 17, 2003, the Company was served with a complaint filed on October
15, 2003, by Michael McDermott, as a stockholder of Planet Electric, Inc. and
purportedly on behalf of Planet Electric in the United States District Court for
the Central District of California. Lithium House, Inc. was founded by Charles
Haba who was also involved in the founding of Planet Electric, Inc., and was
associated with that company until early 2002. The complaint lists the Company,
Charles Haba, Lithium House, Inc., and other individuals and entities as
defendants. The complaint seeks an injunction prohibiting certain defendants
from continuing their business relationship and transfer of alleged Planet
Electric trade secrets or processes and also seeks damages for patent
infringement against Charles Haba, companies that Mr. Haba has been associated
with since his involvement with Planet Electric, and Whistler Investments, Inc.
The complaint also alleges breach of fiduciary duty against Mr. Haba; breach of
confidential relationship against Mr. Haba; conversion against Mr. Haba and
certain other individual defendants; various business torts against Mr. Haba,
Lithium House, and other individuals and entities and trade secret
misappropriation against all defendants.
The Company believes the claim is without merit and will vigorously defend the
action. The Company believes that this litigation will not impede the
continuation of our activities with Mr. Haba, RV Systems, Inc. and Lithium
House, Inc. under the October 21, 2003 Distribution and Licensing Agreement and
to our commencing to implement and license the technologies covered by that
Agreement worldwide.
Global Electric Motorcars ("GEM") has indicated an intent to file a complaint
against the Company for trademark violation, unfair competition and possibly
patent infringement relating to the content and web domain address of
globalelectric.com owned and operated by Whistler Investments, Inc. Such an
action would seek injunctive relief requesting the discontinuance of the use of
the name Global Electric and for damages. GEM has also objected to the use of
"globalelectric.com" as a domain address. The Company believes the claim is
without merit and will vigorously defend any complaint or action brought against
the Company.
NOTE 8 - ADVANCES PAYABLE
An unrelated company advanced funds to the Company to finance operations, which
are non-interest bearing, unsecured and payable on demand.
F-12
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 9 - DISCONTINUED OPERATIONS
Discontinued operations consist of the Company's activities in the commercial
real estate industry. By an agreement dated April 10, 2002, the Company acquired
a 100% interest in the real property and all buildings and improvements situated
thereon, known as the Azra Shopping Center, located in Las Vegas, Nevada. The
purchase price was $4,150,000 payable as follows: a promissory note to the
vendor in the amount of $600,000; the issuance of 12,000,000 common shares
(split adjusted) at a deemed price of $0.033 per share; the Assumption of a
first mortgage in the amount of $3,150,000. The transaction closed April 15,
2002, with operations transferring effective May 1, 2002. The Company had
purchased the property through a wholly owned subsidiary, Whistler Commercial
Holding, Inc. ("WCHI").
On January 1, 2003 the Company sold all the issued and outstanding shares of
WCHI to an unrelated party for the sum of $100. As part of the Share Purchase
Agreement, the Company agreed to assume debt in the amount of $377,960 owed to a
related party by WCHI.
The results of discontinued operations are summarized as follows:
Year Ended Accumulated from
January 31, 2004 Year Ended April 20, 2000 (Date
January 31, of Inception) to
2003 January 31, 2004
- --------------------------------------------------------------------------------------------------------------------
Revenues $ - $ - $ 286,330
====================================================================================================================
Net Operating Loss - (92,251) (92,251)
Loss on disposal - (664,773) (664,773)
- --------------------------------------------------------------------------------------------------------------------
Loss from discontinued operations $ - $ (757,024) $ (757,024)
====================================================================================================================
NOTE 10 - INCOME TAX
Potential benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted Statement of
Financial Accounting Standards No. 109 ("SFAS 109") as of its inception. The
Company has approximately $535,000 of net operating loss carryforwards to reduce
taxable income of future years. These net operating loss carryfowards commence
expiring in 2015. Pursuant to SFAS 109 the Company is required to compute tax
asset benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.
F-13
WHISTLER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
NOTE 10 - INCOME TAX (continued)
The components of the net deferred tax asset at January 31, 2004 and 2003, and
the statutory tax rate, the effective tax rate and the elected amount of the
valuation allowance are scheduled below:
2004 2003
$ $
Net Operating Loss 404,000 65,618
Statutory Tax Rate 34% 34%
Effective Tax Rate - -
Deferred Tax Asset 137,360 22,310
Valuation Allowance (137,360) (22,310)
- ------------------------------------- - ----------------- -- -----------------
Net Deferred Tax Asset - -
- ------------------------------------- - ----------------- -- -----------------
NOTE 11 - PRIOR PERIOD ADJUSTMENT
The accompanying financial statements for 2003 have been restated due to
correction of errors relating to the write-off of mineral properties of $5,150
and the recording of donated rent of $6,000. Donated rent has been recorded as
Additional Paid in Capital in the Statement of Stockholders' Equity. The total
amount of $11,150 has been charged to operations in the prior year. The
Company's prior year net loss increased from $814,343 to $825,493. There was no
effect on basic and diluted net loss per share resulting from the restatement.
NOTE 12 - SUBSEQUENT EVENTS
a) Subsequent to year-end the Company's Board of Directors approved a three
for one split of common shares, which become effective March 10, 2004.
Stockholders of record were entitled to three shares of common stock for
each share held on that date. All per share amounts in the financial
statements have been retroactively adjusted to reflect the stock split.
b) On February 24, 2004, the Company received one million dollars of a three
million dollar financing from Sterling Capital, Inc. for the development of
specific products for various customers. The amount received is in the form
of a non-recourse loan collateralized by the Company's common shares.
F-14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
ITEM 8A. Controls and Procedures
Within the 90 days prior to the filing date of this Form 10-KSB, 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 Chief 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 them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in this Annual Report on Form 10-KSB. There have been no significant
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 III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
Our executive officers and directors and their respective ages as of May 1, 2003
are as follows:
Name Age Office
- -------------------- ----- ------
Holly Roseberry 51 President, Chief Executive
Officer and Director
Mehboob Charania 48 Secretary, Treasurer, Chief
Financial Officer and Director
The following describes the business experience of our directors and executive
officers, including other directorships held in reporting companies:
Ms. Holly Roseberry was appointed as our secretary, treasurer and chief
financial officer on February 20, 2002. On November 15, 2002, she resigned from
these positions and was appointed as our president, chief executive officer and
as a director. From 2001 to the present, she has acted as manager for 24/7
Drycleaning Laundromat, a private Las Vegas business. She obtained a Bachelor of
Arts degree from Sacred Heart University in Bridgeport, Connecticut in 1973. Ms.
Roseberry was employed from 1993 to 1996 as human resources manager, and from
1997 to 1999 as business office manager, of the Las Vegas location of Wards
Department Store. Ms. Roseberry was not employed from 1999-2001.
Mr. Mehboob Charania has acted as our secretary, treasurer and chief financial
officer since November 15, 2002. Since June 2001, Mr. Charania has been the
owner and operator of Infusion Bistro, a restaurant located in Calgary, Alberta.
From 1998 to 2001, he acted as a manager at IBM's Calgary office.
Term of Office
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
Committees
We do not have an audit committee, although we intend to establish such a
committee, with an independent "financial expert" member as defined in the rules
of the Securities and Exchange Commission.
Corporate Code of Conduct
We are reviewing a proposed corporate code of conduct, which would provide for
internal procedures concerning the reporting and disclosure of corporate matters
that are material to our business and to our stockholders. The corporate code of
conduct would include a code of ethics for our officers and employees as to
workplace conduct, dealings with customers, compliance with laws, improper
payments, conflicts of interest, insider trading, company confidential
information, and behavior with honesty and integrity.
Significant Employees
We have no significant employees other than the officers and directors described
above.
Salim R. Rana, although not a director, officer or employee of the Company, has
worked extensively with our management and Lithium House on developing and
commercializing our electric powered vehicles and products, as well on our
negotiations with potential joint venture partners.
Section 16(A) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive officers and
directors, and persons who beneficially own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file. Based on its
review of the copies of such forms received by it, the Company believes that
during the fiscal year ended January 31, 2003 all such filing requirements
applicable to its officers and directors were complied with exception that
reports were filed late by the following persons:
Number Transactions Known Failures
Of late Not Timely To File a
Name and principal position Reports Reported Required Form
- --------------------------- ----------- ------------ --------------
Holly Roseberry 3 3 0
President, C.E.O., and Director
Mehboob Charania 0 0 0
Secretary, Treasurer and C.F.O.
Salim S. Rana Investments Corp. 33 33
10% Stockholder
- -----------------------------------------------------------------------------
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain information as to the Company's highest
paid executive officers and directors for the Company's fiscal year ended
January 31, 2004. No other compensation was paid to any such officer or
directors other than the cash and stock option compensation set forth below.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------- ----------------------------
AWARDS PAYOUTS
--------------------------------------
Other Securities All
Annual Underlying Other
Salary Compen- Restricted Options/ LTIP Compen-
Name Title Year Bonus sation Stock Awarded SARs payouts sation
- --------------------------------------------------------------------------------------
Holly President 2003 0 0 0 0 0 0
Roseberry CEO and 2004 $6,225 45,000*
Director
- --------------------------------------------------------------------------------------
Stacey Former 2003 0 $11,500 0 0 0 0
Fling President
CEO, &
Director
- --------------------------------------------------------------------------------------
- -----------------
* The number of shares reflects the three-for-one forward split of our common
stock effective March 10, 2004
Option/SAR Grants in Last Fiscal Year
Individual Grants
(a) (b) (c) (d) (e)
Number of % of
Securities Total
Under- Options/
Lying SAR's
Options/ Granted to Exercise
SAR's Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date
- ------------- ------------ ----------- --------- ----------
Holly Roseberry 45,000* 100% $.25 7/18/08
* The number of shares reflects the three-for-one forward split of our common
stock effective March 10, 2004
EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES
FISCAL YEAR-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Option/
Options/SARS At SARs at Fiscal
Fiscal Year-End (#) Year-End ($)
Exercisable/ Exercisable/
Shares Acquired on Unexercisable Unexercisable
Name Exercise (#) Value Realized ($)
- ------------------------- ---------------------- --------------------- ------------------------ ----------------------
Holly Roseberry 45,000* NA NA
* The number of shares reflects the three-for-one forward split of our common
stock effective March 10, 2004
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of April 23, 2004 by: (i) each
person (including any group) known to us to own more than five percent (5%) of
any class of our voting securities, (ii) each of our directors, and (iii)
officers and directors as a group. Unless otherwise indicated, the shareholders
listed possess sole voting and investment power with respect to the shares
shown.
All share information in the following table reflects the three for one forward
split of out common stock effective March 10, 2004.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock
(1)
- ------------- ------------------- ---------------- -----------
Common Stock Salim S. Rana Investments Corp. 8,473,995 42.19%
5001 E. Bonanza Rd., Suite 144-145
Las Vegas, Nevada 89110
Common Stock Holly Roseberry 45,000 *
President, CEO, Director
5001 E. Bonanza Rd., Suite 144-145
Las Vegas, Nevada 89019
Common Stock All Officers and Directors 45,000 *
as a Group that consists of
two people
- -------------------------
* Less than 1%
(1) As of April 23, 2004, there were 20,083,683 shares of our common stock
issued and outstanding.
CHANGE IN CONTROL
We are not aware of any arrangement that might result in a change in control in
the future.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By an agreement dated May 1, 2000, we previously paid $500 per month in
consideration of office rent to Dewey Jones, our former president and director.
On February 20, 2002, our president, Stacey Fling purchased 3,800,000 shares of
common stock from our former president, Dewey Jones, for $3,800. On January 28,
2003, Ms. Fling purchased 50,000 shares of common stock from Joyce Messer in a
private transaction. The aggregate price for the shares was $2,500.
Acquisition and Disposition of Azra Shopping Center
By an agreement dated April 10, 2002, we acquired from Salim S. Rana
Investments Corp., a private Nevada company, a 100% interest in the real
property and all buildings and improvements situated thereon, known as the Azra
Shopping center, located in Las Vegas, Nevada. The purchase price was $4,150,000
and was paid as follows:
1. We issued 40,000,000 shares of common stock for $0.01 per share;
2. We assumed a first mortgage on the Azra Shopping Center for $3,150,000;
and
3. We issued a promissory note for $600,000 to Salim S. Rana Investments,
Corp.
We completed the acquisition through our wholly-owned subsidiary,
Whistler Commercial Holding, Inc., on April 15, 2002, with operations
transferring effective May 1, 2002.
On January 1, 2003, we sold 100% of the issued and outstanding
capital of Whistler Commercial Holding, Inc. to an unrelated party for $100. As
part of the agreement, we agreed to assume debt in the amount of $377,960 that
Whistler Commercial Holding, Inc. owed to Salim S. Rana Investments Corp., our
majority stockholder. We incurred a loss of $757,024 during the fiscal year from
these discontinued operations.
During our fiscal year ended January 31, 2004, Salim S. Rana Investments
Corp. advanced approximately $175,000 additionally to the Company. We have
repaid this debt and all subsequent advances by this stockholder as of February
25, 2004.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index.
Exhibits
- --------
- -------------------- -----------------------------------------------------------------------------------------------------
Exhibit No. Description
- -------------------- -----------------------------------------------------------------------------------------------------
3.1 Articles of Incorporation of the Company. (Incorporated herein by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form SB-2 filed with the Commission on May 29,
2001.)
3.2 By-Laws of the Company. (Incorporated herein by reference to
Exhibit 3.2 to the Company's Registration Statement on Form
SB-2 filed with the Commission on May 29, 2001).
4.1 Specimen Common Stock Certificate. (Incorporated herein by
reference to Exhibit 4 to the Company's Registration
Statement on Form SB-2 filed with the Commission on May 29,
2001.)
4.2 Whistler Investments, Inc. 2003 Restricted Stock Plan. (Incorporated herein by reference to Exhibit
4.2 to the Company's Registration Statement on Form S-8 filed with the Commission on July
18, 2003.)
10.1 Mineral Claim dated October 2, 2000. (Incorporated herein by
reference to Exhibit 10.1 to the Company's Registration
Statement on Form SB-2 filed with the Commission on May 29,
2001.)
10.2 Mineral Property Staking and Sales agreement, dated September 19, 2000, between Mr. Edward
McCrossan and the Company. (Incorporated herein by reference to Exhibit 10.2 to the Company's
Registration Statement on Form SB-2 filed with the Commission on May 29, 2001.)
10.3 Office Services Agreement, dated May 1, 2000, between the Company and Dewey Jones. (Incorporated
herein by reference to Exhibit 10.3
to the Company's Registration Statement on Form SB-2 filed with the Commission on May 29,
2001.)
10.4 Asset Purchase Agreement dated April 10, 2002 between Salim S. Rana Investments Corp. and
Whistler Investments, Inc. (Incorporated by reference to Exhibit No. 10.1 to the Company's Annual
Report on Form 10-KSB, filed May 6, 2002.)
10.5 Agreement dated January 1, 2003 between Whistler Investments, Inc. and Kim Larsen respecting the
disposition of Azra Shopping Center. (Incorporated by reference to Exhibit 10.1 to Amendment No. 1
to the Company's Annual Report on Form 10-KSB, filed May 8, 2003.)
10.6 Amendment to Licensing Agreement, dated October 21, 2003,
between Nu Age Electric Inc. and Whistler Investments, Inc. (Incorporated herein by reference to
Exhibit No. 10.3 to the Company's Current Report on Form 8-K, filed November 21, 2003.)
10.7 Agreement, dated October 21, 2003, by and between RV Systems,
Inc. and Whistler Investments, Inc. (Incorporated herein by reference to Exhibit No. 10.4 to the
Company's Current Report on Form 8-K, filed November 21, 2003.)
10.8 Investment Agreement, dated as of January 19, 2004, by and
between Whistler Investments, Inc. and Dutchess Private Equities Fund, L.P. (Incorporated by
reference to Exhibit No. 10.5 to the Company's Current Report on Form 8-K, filed January 23, 2004.)
10.9 Registration Rights Agreement, dated as of January 19, 2004,
by and between Whistler Investments, Inc. and Dutchess Private
Equities Fund, L.P. (Incorporated by reference to Exhibit No. 10.6 to the Company's Current Report
on Form 8-K, filed January 23, 2004.)
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith.
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
(b) Reports on Form 8-K: The Company filed a Current Report on Form 8-K, on
January 23, 2004, during the fiscal quarter ended January 31, 2004.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(1) Aggregate fees for the last two years: 2003-$5,849 2004-$16,450
(2) Audit related fees: 2003-$5,849 2004-$16,450
(3) Tax fees: 2002- NA 2003- NA
(4) All other fees. NA
(5) Audit committee pre-approval processes, percentages of services
approved by audit committee, percentage of hours spent on audit engagement by
persons other than principal accountant's full time employees. NA
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WHISTLER INVESTMENTS, INC.
By: /s/ Holly Roseberry
---------------------------------
Holly Roseberry
President and Chief Executive Officer
Director
Date: April 29, 2004
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Holly Roseberry
-------------------
Holly Roseberry
President and C.E.O.
(Principal Executive Officer)
Director
Date: April 29, 2004
By: /s/ Mehboob Charania
--------------------
Mehboob Charania
Secretary, Treasurer & C.F.O.
(Principal Financial Officer)
Director
Date: April 29, 2004
EXHIBIT INDEX
31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 31.1
CERTIFICATION
I, Holly Roseberry, certify that:
1. I have reviewed this annual report on Form 10-KSB of Whistler
Investments, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's intternal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting;
April 29, 2004 By: /s/ Holly Roseberry
-------------------
Holly Roseberry
President and C.E.O.
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, Mehboob Charania, certify that:
1. I have reviewed this annual report on Form 10-KSB of Whistler
Investments, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's intternal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting;
Date: April 29, 2004 /s/Mehboob Charania
------------------------------
Mehboob Charania
Secretary, Treasurer and C.F.O.
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Whistler Investments, Inc. (the
"Company") on Form 10-KSB for the year ended January 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Holly
Roseberry, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Holly Roseberry
---------------------
Holly Roseberry
Chief Executive Officer
April 29, 2004
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Whistler Investments, Inc. (the
"Company") on Form 10-KSB for the year ended January 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Mehboob
Charania, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/Mehboob Charania
---------------------
Mehboob Charania
Chief Financial Officer
April 29, 2004