The most significant transaction during the year was the amalgamation on July 2, 2008, through a reverse takeover (“RTO”), of Texas Gas & Oil Inc. by Legend Power Systems Inc.

As a result of the RTO, Texas Gas & Oil Inc. changed its name to Legend Power Systems Inc. (“Legend Power”) and the pre-RTO Legend Power Systems Inc. changed its name to 0809882 B.C. Ltd. (“pre-RTO Legend”), now a wholly-owned subsidiary of Legend Power Systems Inc.

Legend Power issued shares to the pre-RTO Legend shareholders and converted all Texas Gas & Oil Inc. share warrants to common shares of Legend Power Systems Inc.

Legend Power commenced trading on the TSX Venture Exchange on July 3, 2008 under the trading symbol LPS.

The financial statements presented for the year ended September 30, 2008 are prepared in accordance with the CICA guidelines under section 1581, which identifies pre-RTO Legend as the acquirer for accounting purposes even though the legal parent is Legend Power. The current year’s numbers include operations of pre-RTO Legend for twelve months and the operations of Legend Power for the period July 3, 2008 to September 30, 2008. The comparatives stated are for pre-RTO Legend.

Operationally, on a consolidated basis, Legend Power’s performance improved slightly in revenue generation but Legend Power faced an overall increase in expenditure, resulting in a higher loss than last year.

Going forward, Legend Power is currently shifting its operational emphasis from a mainly research & development stage to a marketing & selling mode, which should result in increased revenues during the next fiscal year.

The current state of the capital markets and the economy will have an impact on Legend Power’s marketing and sales efforts as with any other business organization and future performance will depend on the overall economic situation.

Revenues

Revenues for the year ended September 30, 2008 were $690,212 compared to $472,750 during the same period in 2007. The revenues in 2008 were primarily due to the installations in Ontario.

Expenses

Expenses (excluding cost of sales) for the year ended September 30, 2008 increased to $2,714,210 compared to $2,129,909 during the same period in 2007, a significant portion of which related to the increase in RTO costs and research & development costs.

Earnings

Net loss for the year ended September 30, 2008 was $2,294,753 or $0.15 loss per share (basic and diluted) compared to a net loss of $1,594,608 or $0.12 loss per share (basic and diluted) during the same period in 2007.

Income Statement

2008 2007
For the year ended September 30 $ $
Revenue 690,212 472,750
Total expenses 2,714,210 2,129,909
Income (loss) before other items (2,382,795) (1,901,745)
Per share basic and diluted (0.16) (0.15)
Net income (loss) (2,294,753) (1,594,608)
Per share basic and diluted (0.15) (0.12)
Weighted average shares outstanding 15,295,038 12,985,673

Cash Flow and Working Capital

Cash and cash equivalents as at September 30, 2008, was $690,455 compared to $597,142 for the same period in 2007.

As at September 30, 2008, Legend Power had working capital of $180,415 compared to a deficit of $6,342,092 in the same period in 2007.

Balance Sheet

2008 2007
For the year ended September 30 $ $
Total assets 2,941,749 3,412,724
Current liabilities 1,148,931 7,535,786
Shareholders’ equity (deficiency) 1,792,548 (4,123,062)
Cash dividend paid

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