Dear Legend Power Shareholders:
By any measure, 2008 was a monumental year for Legend Power. In 2007/2008 we saw the culmination of many years of hard work, with several critical projects advanced from the concept stage to successful completion. Notable accomplishments include:
- Completed the acquisition and applications for registration of patents for the Electrical Harmonizer, which provides Legend Power the right to manufacture and distribute the technology throughout the world, with the exception of Japan
- Eliminated CAD $1 million otherwise payable for the manufacturing and distribution rights under an earlier agreement and removed Legend Power’s obligation to pay USD $100 million for exclusive U.S. distribution rights
- In conjunction with the acquisition of the patents, eliminated the requirement to issue 12.6 million shares (50% of the then outstanding company shares) to a party related to the vendor of the patents
- Completed development of the Automatic Voltage Regulator (AVR), conforming to the Electrical Harmonizer patent – Legend Power now holds the patents for the Electrical Harmonizer-AVR in nine countries and the intellectual property rights worldwide
- Completed reverse takeover of Texas Gas & Oil Inc., converted all share warrants to common shares of Legend Power Systems Inc. and listed on the TSX Venture Exchange
- Opened up new markets in Ontario with the sale and installation of eight Electrical Harmonizer-AVR units in three Canada Post facilities
- Qualified for higher incentive funding in British Columbia and Ontario, dramatically reducing the payback period for our customers – BC Hydro Power Smart Partner Program pays up to 60% of the capital costs and Ontario Power Authority’s Conservation and Demand Management program through Ontario’s Building Owners and Managers Association’s pays up to 40%
- Secured $250,000 in grants from the Industrial Research Assistance Program (IRAP), a division of the National Research Council of Canada, allowing Legend Power to continue research and develop new leading edge technologies
- Secured financing agreement with Royal Bank of Canada (RBC) to provide (1) lease financing to qualified customers purchasing the Electrical Harmonizer-AVR with capital leases for up to 100% of the cost (net of rebates and grants) for terms from 24 to 60 months and (2) Legend Power with a $2 million operating line of credit and a $300,000 revolving line for the lease of capital assets
As we celebrate our past successes, it is fair to say that this past year has not been without its challenges. The current financial crisis has created many uncertainties not only for Legend Power, but also for the world economy. Unfortunately, Legend Power debuted its listing on the TSX Venture Exchange at the start of the economic downturn; this said, we feel our offer is timely with environmental stewardship becoming increasingly mandated by corporations.
Moving forward, Legend Power will place considerable emphasis on building out our installations in both British Columbia and Ontario; our sales and technical teams are actively being strengthened in both jurisdictions to accomplish this goal.
In keeping with our focus to target commercial facilities, we see a sizeable opportunity in the property management market. Legend Power has already established strong working relationships with some of Canada’s largest national property management companies, many of which have aggressive carbon reduction goals.
On behalf of the Board of Directors, I would like to thank our shareholders for their continued support, as well as our employees for their hard work, dedication and initiative.
We’ve got the power to grow – a proven technology, a talented team and a ripening market. We look ahead to 2009 with a strong sense of commitment, confidence and optimism. I look forward to sharing our successes with you.
Chairman & Chief Executive Officer
November 24, 2008