SEC Info - Force Protection Inc - 424B3

SEC Info

Home

My Interests

Help

Please Sign In

Force Protection Inc · 424B3 · On 4/16/04

Filed On 4/16/04 11:12am ET · SEC File 333-114263 · Accession Number 1231742-4-285

  As Of                Filer                Filing    For/On/As Docs:Size              Issuer               Agent

 4/16/04  Force Protection Inc              424B3                  1:64                                     Edgarization LLC

Prospectus · Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                            64±   268K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Financial statements Frank Kavanaugh Michael Watts Offering, The Risk Factors Sales and marketing The Offering Use of Proceeds
1	1st Page - Filing Submission
"	The Offering
"	Use of Proceeds
"	Risk Factors
"	Sales and marketing
"	Michael Watts
"	Frank Kavanaugh
"	Financial statements

424B3 1st "Page" of 2 TOC Top Previous Next Bottom Just 1st
Sponsored Ads...

Filed Pursuant to Rule 424(b)(3)
REGISTRATION NO. 333-114263

PROSPECTUS
FORCE PROTCTION, INC.

This prospectus relates to the sale of up to 65,000,000 shares of our common
stock by our stockholders. We are not selling any securities in this offering
and therefore will not receive any proceeds from this offering. We will,
however, receive proceeds from the sale of securities under an Investment
Agreement, also referred to as an Equity Line of Credit that we have entered
into with one of the selling stockholders, Dutchess Private Equities Fund, L.P.,
which permits us to "put" up to $3.5 million in shares of common stock to
Dutchess Private Equities Fund. Under the March 23, 2004 Private Placement we
have agreed not to utilize the Equity Line for a period of 6 months following
the effective registration of certain shares underlying a Private Placement also
included in this prospectus. Additionally, we may receive funds from the
exercise of warrants held by certain selling stockholders. All costs associated
with this registration will be borne by us.

The shares of common stock are being offered for sale by the selling
stockholders at prices established on the Over-the-Counter Bulletin Board or in
negotiated transactions during the term of this offering. Our common stock is
quoted on the Over-the-Counter Bulletin Board under the symbol FRCP.OB. On March
31, 2004, the last reported sale price of our common stock was $0.26 per share.

Dutchess Private Equities Fund, LP and Charleston Capital, LLC are
"underwriters" within the meaning of the Securities Act of 1933, as amended, in
connection with the resale of common stock under the Investment Agreement.
Dutchess will pay us 93% of lowest closing bid price of the common stock during
the five consecutive trading day period immediately following the date of our
notice to them of our election to put shares pursuant to the Equity Line of
Credit. The 15,000,000 common shares held by Gamma Opportunity Capital, Longview
Fund, Alpha Capital, Domino International, Magellan International, and Mountain
Ridge were issued in a prior private placement.
__________________________________

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD PURCHASE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS.
SEE "RISK FACTORS" BEGINNING ON PAGE 8.
____________________________________

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

THE DATE OF THIS PROSPECTUS IS APRIL 16, 2004

TABLE OF CONTENTS

PROSPECTUS SUMMARY 4
SHARES ELIGIBLE FOR FUTURE SALE 6
RISK FACTORS 8
USE OF PROCEEDS 16
DILUTION 17
SELLING STOCKHOLDERS 18
PLAN OF DISTRIBUTION 21
CAPITALIZATION 22
DIVIDEND POLICY 23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 23
DESCRIPTION OF BUSINESS 27
DESCRIPTION OF PROPERTY 31
MANAGEMENT 31
EXECUTIVE COMPENSATION 33
RELATED PARTY TRANSACTIONS 35
MARKET FOR OUR COMMON STOCK 36
REPORTS TO SECURITYHOLDERS 37
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT 37
DESCRIPTION OF SECURITIES 37
LEGAL PROCEEDINGS 40
LEGAL MATTERS 40
EXPERTS 40
FINANCIAL STATEMENTS F-1

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements including the notes thereto, appearing
elsewhere in this prospectus. Because it is a summary, it does not contain all
of the information you should consider before making an investment decision.

FORCE PROTECTION, INC.

We incorporated in the State of Colorado in November 1996. Our wholly-owned
subsidiary, Technical Solutions Group, Inc. incorporated in Nevada in 1997. We
acquired Technical Solutions Group, Inc. in July 2002. Through our subsidiary,
Technical Solutions Group, Inc. we manufacture and market military vehicles that
are protected against landmines and hostile fire. These vehicles are typically
used to transport personnel safely in areas infested with landmines and for the
actual removal of landmines.

Our principal executive offices are located at 9801 Highway 78, #3, Ladson,
South Carolina 29456. Our telephone number is (843) 740-7015.

THE OFFERING

On March 23, 2004, we closed a private offering. This offering, sold to six
accredited investors, consisted of the following:

1. 15,000,000 shares at $0.20 per share;

2. An "A" Warrant for each share purchased, exercisable at $0.24 per share.
The "A" Warrants expire March 23, 2006; and

3. A "Green Shoe" Warrant for each share purchased, exercisable at $0.20 per
share. The "Green Shoe" Warrants expire 180 days after the effective date of
this registration statement.

On September 20, 2003 we entered into an Investment Agreement with Dutchess
Private Equities Fund, also referred to as an Equity Line of Credit. That
agreement provides that, following notice to Dutchess, we may put to Dutchess up
to $3.5 million in shares of our common stock for a purchase price equal to 93%
of the lowest closing bid price on the Over-the-Counter Bulletin Board of our
common stock during the five day period following that notice. Each put will be
equal to either (a) 200% of the average daily volume of our common stock for the
10 trading days prior to the put notice date, multiplied by the average of the
three daily closing best bid prices immediately preceding the Put or (b)
$10,000; provided that in no event will the Put Amount be more than $1,000,000
with respect to any single Put. Under the March 23, 2004 Private Placement we
have agreed not to utilize the Equity Line for a period of 6 months following
the effective registration of the shares underlying the Private Placement.

The selling stockholders consist of:

[Download Table]

Dutchess Private Equities Fund L.P. 20,000,000 (1)
----------------------------------- ----------
Gamma Opportunity Capital Partners,LP 7,500,000 (2)
----------------------------------- ----------
Longview Fund, LP 7,500,000 (3)
----------------------------------- ----------
Alpha Capital Aktiengesellschaft 7,500,000 (4)
----------------------------------- ----------
Domino International Ltd 6,750,000 (5)
----------------------------------- ----------
Magellan International Ltd 12,000,000 (6)
----------------------------------- ----------
Mountain Ridge Capital LLC 3,750,000 (7)
----------------------------------- ----------
<FN>

1. Consists of shares that may be issued pursuant to an equity line.
2. Consists of 2,500,000 shares currently held by Gamma Opportunity Capital
Partners,LP and 2,500,000 shares Gamma Opportunity Capital Partners,LP may
acquire upon exercise of the "A" Warrant at $0.24 per share and 2,500,000 shares
Gamma Opportunity Capital Partners,LP may acquire at $0.20 per share upon
exercise of the "Green Shoe" Warrant.
3. Consists of 2,500,000 shares currently held by Longview Fund, LP and
2,500,000 shares Longview Fund, LP may acquire upon exercise of the "A" Warrant
at $0.24 per share and 2,500,000 shares Longview Fund, LP may acquire at $0.20
per share upon exercise of the "Green Shoe" Warrant.
4. Consists of 2,500,000 shares currently held by Alpha Capital
Aktiengesellschaft and 2,500,000 shares Alpha Capital Aktiengesellschaft may
acquire upon exercise of the "A" Warrant at $0.24 per share and 2,500,000 shares
Alpha Capital Aktiengesellschaft may acquire at $0.20 per share upon exercise of
the "Green Shoe" Warrant.
5. Consists of 2,250,000 shares currently held by Domino International Ltd
and 2,250,000 shares Domino International Ltd may acquire upon exercise of the
"A" Warrant at $0.24 per share and 2,250,000 shares Domino International Ltd may
acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant.
6. Consists of 4,000,000 shares currently held by Magellan International Ltd
and 4,000,000 shares Magellan International Ltd may acquire upon exercise of the
"A" Warrant at $0.24 per share and 4,000,000 shares Magellan International Ltd
may acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant.
7. Consists of 1,250,000 shares currently held by Mountain Ridge Capital LLC
and 1,250,000 shares Mountain Ridge Capital LLC may acquire upon exercise of the
"A" Warrant at $0.24 per share and 1,250,000 shares Mountain Ridge Capital LLC
may acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant.

OUR CAPITAL STRUCTURE AND SHARES ELIGIBLE FOR FUTURE SALE

The following tables outline our capital stock as of March 31, 2004:

[Download Table]

Common Stock outstanding:

Before the offering 151,454,698 shares (1)

After the offering 201,454,698 shares (1)(2)

(1) Assumes:

- No conversion of shares of Series B Preferred Stock outstanding as of
March 31, 2004:

[Download Table]

Shareholder # of Shares Held Common after Conversion
-------------------- ---------------- -----------------------
Ashford Capital, LLC 10 37,863,675
-------------------- ---------------- -----------------------

- No conversion of shares of Series C Preferred outstanding as of March 31,
2004:

[Download Table]

Shareholder # of Shares Held Common after Conversion
---------------------------- ---------------- -----------------------
Ashford Capital, KK 3 914,213
---------------------------- ---------------- -----------------------
Robert Baker 5 1,529,845
---------------------------- ---------------- -----------------------
Garth Barrett 10 3,090,912
---------------------------- ---------------- -----------------------
Jeff Conrad 5 1,529,845
---------------------------- ---------------- -----------------------
EFund Small-Cap Fund, LP 23 7,302,847
---------------------------- ---------------- -----------------------
R. Scott Ervin 1 303,516
---------------------------- ---------------- -----------------------
Erik Heinekin 5 1,529,845
---------------------------- ---------------- -----------------------
Hratch Khedesian 1 303,516
---------------------------- ---------------- -----------------------
Russell James Miller JR TTEE 2 608,252
---------------------------- ---------------- -----------------------
Sharada M. Rao 1 303,516
---------------------------- ---------------- -----------------------
James A. Shrum 4 1,221,409
---------------------------- ---------------- -----------------------
Michael Watts 50 16,828,300
---------------------------- ---------------- -----------------------
Thomas H. Thebes 1 303,516
---------------------------- ---------------- -----------------------
---------------------------- ---------------- -----------------------
Total 111 35,769,535
---------------------------- ---------------- -----------------------

<FN>
- No conversion of options outstanding as of March 31, 2004:

[Download Table]

Option Holder . . . . Option Price # of Shares
--------------------- ------------ -----------
Michael Watts . . . . .07 2,000,000
--------------------- ------------ -----------
Denis Hickey. . . . . .065 875,018
--------------------- ------------ -----------
Audrey Clarke-Pounder .10 240,000
--------------------- ------------ -----------
Thomas H. Thebes . . . .07 1,000,000

- No conversion of warrants outstanding as of March 31, 2004:

[Enlarge/Download Table]

Warrant Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . Exercise Price # of Common Stock Shares
--------------------------------------------------------------------- --------------- ------------------------
Outstanding common stock warrants
exercise price per share $0.01 to $0.20 14,271,400
--------------------------------------------------------------------- --------------- ------------------------
Dennis Benner warrant for 10 shares of Series C Pref. . . . . . . . . Series C share 3,090,912
--------------------------------------------------------------------- --------------- ------------------------
Ed Lassiter warrant for 10 shares of Series C Pref . . . . . . . . . Series C share 3,090,912
--------------------------------------------------------------------- --------------- ------------------------
<FN>

(2) For the purpose of determining the number of shares subject to registration with the Securities and Exchange
Commission, we have assumed that we will issue not more than 20,000,000 shares pursuant to the exercise of our
put right under the Investment Agreement, although the number of shares that we will actually issue pursuant to
that put right may be more than or less than 20,000,000, depending on the trading price of our common stock and
the number of times we draw down on the equity line. We currently have no intent to exercise the put right in a
manner that would result in our issuance of more than 20,000,000 shares, but if we were to exercise the put
right in that manner, we would be required to file a subsequent registration statement with the Securities and
Exchange Commission and for that registration statement to be deemed effective prior to the issuance of any such
additional shares.

Use of proceeds

We will not receive any proceeds from the sale by the selling stockholders of
our common stock. We will receive proceeds from our Investment Agreement with
Dutchess Private Equities Fund L.P. We may also receive proceeds from the
exercise of warrants under some circumstances. See "Use of Proceeds."

Symbol for our common stock

Our common stock trades on the OTCBB Market under the symbol "FRCP.OB"

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The selected financial information presented below is derived from and should be
read in conjunction with our financial statements, including notes thereto,
appearing elsewhere in this prospectus. See "Financial statements."

[Enlarge/Download Table]

SUMMARY OPEARTING INFORMATION:
FISCAL YEAR ENDED
------------------------------
DECEMBER 31,

2003 2002 2001
--------------- ------------ ------------

Sales . . . . . . . . . . . . . . . . . . . . . .$6,247,285 $ 2,606,634 $ 1,199,047

Net Income/(Loss) . . . . . . . . . . . . . . . .$(5,321,623) $(5,373,377) $(1,437,818)

Loss per share. (Diluted) . . . . . . . . . . .$ (.028) $ (0.09) $ (0.07)

Weighted average number of
common shares outstanding . . . . . . . . . . . . 186,760,559 61,421,885 23,816,716

SUMMARY BALANCE SHEET INFORMATION

[Download Table]

AT DECEMBER 31,
-----------------
2003 2002 2001
----------- --------- -----------

Working Capital $ (360,652) $ (872,800) $ (313,898)
Total Assets . . . . 1,620,114 2,615,451 2,113,779
Total Liabilities. . 1,881,120 1,812,001 938,864
Stockholders' equity (261,006) 803,450 1,174,915

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors, other information included in
this prospectus and information in our periodic reports filed with the SEC. If
any of the following risks actually occur, our business, financial condition or
results of operations could be materially and adversely affected and you may
lose some or all of your investment.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. We generally use words such as "believe," "may," "could," "will,"
"intend," "expect," "anticipate," "plan," and similar expressions to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many reasons, including
the risks described below and elsewhere in this report. Although we believe the
expectations reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are made, and our
future results, levels of activity, performance or achievements may not meet
these expectations. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual
results or to changes in our expectations, except as required by law.

RISKS RELATED TO OUR BUSINESS

We had losses since our inception and expect losses to continue in the future.
We may never become profitable.

We have historically generated substantial losses, which, if continued, could
make it difficult to fund our operations or successfully execute our business
plan, and could adversely affect our stock price. We experienced net losses of
$5,373,377 for the year ended December 31, 2002, and $5,321,623 for the year
ended December 31, 2003. We have generated significant net losses in recent
periods, and experienced negative cash flows from operations in the amount of
$1,498,184 for the year ended December 31, 2002 and $4,371,480 for the year
ended December 31, 2003. Loss from discontinued operations of $2,932,179
accounted for 67% of the net cash used in operating activities. In recent
years, some of the losses were incurred as a result of investments in new
product development and marketing costs. While we have reduced our investments,
we anticipate that we will continue to generate net losses and we may not be
able to achieve or sustain profitability on a quarterly or annual basis in the
future. In addition, because large portions of our expenses are fixed, we
generally are unable to reduce expenses significantly in the short-term to
compensate for any unexpected delay or decrease in anticipated revenues. As a
result, we may continue to experience net losses, which will make it difficult
to fund our operations and achieve our business plan, and could cause the market
price of our common stock to decline.

We have a limited operating history and may never achieve or sustain profitable
operations.

We are an early stage production company originally incorporated in 1996. We
acquired our subsidiary, Technical Solutions Group, Inc. in July 2002. We have
generated limited revenues from our current products and revenue of $6,247,285,
$2,606,634 and $1,199,047 in years 2003, 2002 and 2001. In 2003, mine protected
vehicles provided 100% of the sales, 100% of the cost of goods sold, and 100% of
the gross profit. In 2002, mine protected vehicles provided 83% of the sales,
86% of the cost of goods sold, and 75% of the gross profit. In 2001, all of our
revenue was derived from the sale of boats, which we no longer manufacture. Our
ability to successfully commercialize our products will depend on, among other
things, successful completion of our ongoing development activities,
geo-political events, ability to manufacture and distribute the products, and
the relative cost to the customer of our system as compared to alternative
competitive products. Because we focus on emerging markets, market reaction can
be difficult to predict. Many of our planned products incorporate technologies
or approaches that have not yet achieved broad market acceptance. In addition,
we have a limited history of competing in the intensely competitive defense
industry. Our technology may not be successfully commercialized or marketed. As
a result, we may never achieve or sustain profitable operations.

Our Independent Accountants have issued a Going Concern Opinion and if we do not
generate enough cash from operations to sustain our business we may have to
liquidate assets or curtail our operations.

The accompanying financial statements have been prepared assuming we will
continue as a going concern. During the year ended December 31, 2003, we
incurred net loss of $5,321,623. During the year ended December 31, 2002, we
incurred net loss of $5,373,377. Conditions exist which raise substantial doubt
about our ability to continue unless we are able to generate sufficient cash
flows to meet our obligations and sustain our operations. The financial
statements do not include any adjustment that might result from the outcome of
this uncertainty.

We depend on our suppliers and if we can not obtain certain components for our
products, we might have to develop alternative designs that could increase our
costs.

We depend upon a number of suppliers for components of our products. There is an
inherent risk that certain components of our products will be unavailable for
prompt delivery or, in some cases, discontinued. We have only limited control
over any third-party manufacturer as to quality controls, timeliness of
production, deliveries and various other factors. Should the availability of
certain components be compromised, it could force us to develop alternative
designs using other components, which could add to the cost of goods sold and
compromise delivery commitments. If we are unable to obtain components in a
timely manner, at an acceptable cost, or at all, we may need to select new
suppliers, redesign or reconstruct process we use to build the hulls and/or the
vehicles, which management believes would take a minimum of one-year. We may not
be able to manufacture any vehicles for a period of time, which could materially
adversely affect our business, results from operations, and financial condition.

We market our products to a limited customer base and if we do not find
acceptance of our products within that customer base, our business may fail.

Our government business depends on a limited number of customers, and if any of
these customers terminate or reduce their contracts, or if we cannot obtain
additional government contracts in the future, our revenues will decline and our
results of operations will decrease. Because most of our consolidated revenues
were derived directly or indirectly from government contractors, this risk can
significantly affect our business, results of operations and financial
condition. In the twelve -months ended December 31,, 2003, our revenues were
derived directly or indirectly from two governmental agencies, the U.S. Army and
through a private contractor, the British Ministry of Defense. We expect to
continue to be dependent upon contracts with governmental agencies and their
contractors for a substantial portion of revenue for the foreseeable future.

Because we currently depend on government contracts and subcontracts, we face
certain risks, including budget restraints and fixed price contracts. General
political and economic conditions, which are difficult to accurately predict,
directly and indirectly affect the quantity and allocation of expenditures by
government agencies. Even the timing of incremental funding commitments to
existing, but partially funded, contracts can be affected by these factors.
Therefore, cutbacks or re-allocations in the U.S. or other government budget
could have a material adverse impact on our results of operations as long as
research and development contracts remain an important element of the business.

Obtaining government contracts may also involve long purchase and payment
cycles, competitive bidding, qualification requirements, delays or changes in
funding, budgetary constraints, political agendas, extensive specification
development, price negotiations and milestone requirements. Each government
agency also maintains its own rules and regulations with which we must comply
and which can vary significantly among agencies. Governmental agencies also
often retain some portion of fees payable upon completion of a project and
collection of these fees may be delayed for several months or even years, in
some instances.

In addition, an increasing number of government contracts are fixed price
contracts which may prevent us from recovering costs incurred in excess of our
budgeted costs. Fixed price contracts require us to estimate the total project
cost based on preliminary projections of the project's requirements. The
financial viability of any given project depends in large part on our ability to
estimate such costs accurately and complete the project on a timely basis. In
the event actual costs exceed the fixed contractual cost, we may not be able to
recover the excess costs.

Some government contracts are also subject to termination or renegotiation at
the convenience of the government, which could result in a large decline in
revenue in any given quarter. Although government contracts have provisions
providing for the reimbursement of costs associated with termination, the
termination of a material contract at a time when our funded backlog does not
permit redeployment of staff could result in reductions of employees. In
addition, the timing of payments from government contracts is also subject to
significant fluctuation and potential delay, depending on the government agency
involved. Any such delay could result in a temporary shortage in working
capital.

Some of our product components are manufactured in South Africa and if that
country becomes unstable or changes government regulations our costs may
increase or we may become unable to source certain parts.

Some of our product components are manufactured in South Africa. If import
tariffs or taxes increase for any reason, our cost of goods would increase. Our
financial performance may be affected by changes in South Africa's political,
social and economic environment. The role of the South African central and local
governments in the economy is significant. South African policies toward
economic liberalization, and laws and policies affecting foreign companies,
foreign investment, currency exchange rates and other matters could change,
resulting in greater restrictions on our ability to do business with suppliers
based in South Africa. The government could impose surcharges, increase tax
rates, or revoke, terminate or suspend operating licenses without compensating
us. Also, South Africa has, from time to time, experienced instances of civil
unrest and hostilities. Confrontations have occurred between the military,
insurgent forces, and civilians. If for these or any other reason, we lose our
ability to sub-contract or manufacture the components to our products, or the
cost of doing business increases, our business, financial condition, and results
of operations would be materially and adversely affected.

We may be subject to personal liability claims and our insurance, if any, may
not be adequate to cover such claims. As a result, a significant lawsuit could
adversely affect our business.

We may be exposed to liability for personal injury or property damage claims
relating to the use of the products. Any future claim against us for personal
injury or property damage could materially adversely affect the business,
financial condition, and results of operations and result in negative publicity.
Even if we are not found liable, the costs of defending a lawsuit can be high.

We do not currently maintain insurance for this type of liability. Additionally,
even if we do purchase insurance, we may experience legal claims outside of our
insurance coverage, or in excess of our insurance coverage, or that insurance
will not cover.

We are subject to substantial competition and we must continue research and
development to remain competitive.

We are subject to significant competition that could harm our ability to win
business and increase the price pressure on our products. We face strong
competition from a wide variety of firms, including large, multinational
vehicle, defense and aerospace firms. Most of our competitors have considerably
greater financial, marketing and technological resources than we do which may
make it difficult to win new contracts and we may not be able to compete
successfully. Certain competitors operate fabrication facilities and have longer
operating histories and presence in key markets, greater name recognition,
larger customer bases and significantly greater financial, sales and marketing,
manufacturing, distribution, technical and other resources, as a result, these
competitors may be able to adapt more quickly to new or emerging technologies
and changes in customer requirements. They may also be able to devote greater
resources to the promotion and sale of their products.

Moreover, we may not have sufficient resources to undertake the continuing
research and development necessary to remain competitive. Competitors may
attempt to independently develop similar designs or duplicate our products or
designs. We or our competitors may intentionally or unintentionally infringe
upon or misappropriate products or proprietary information. In the future,
litigation may be necessary to enforce intellectual property rights or to
determine the validity and scope of the proprietary rights of others. Any such
litigation could be time consuming and costly. Currently we have no patents. Any
patent or patents sub-licensed to us relating to current or future products may
be challenged, invalidated, or circumvented or the rights granted thereunder may
not be held valid if subsequently challenged.

Our products are based on technological innovation. Consequently, the life
cycles of some of our products can be relatively short. Our success depends
significantly on our ability to establish and maintain a competitive position in
this field. Our products may not remain competitive in light of technological
developments by others. Our competitors may succeed in discovering and
developing technology before we do that would render our technology, and hence
our products, obsolete and noncompetitive.

We must comply with environmental regulations or we may have to pay expensive
penalties or clean up costs.

We are subject to federal, state, local and foreign laws, and regulations
regarding protection of the environment, including air, water, and soil. Our
manufacturing business involves the use, handling, storage, and contracting for
recycling or disposal of, hazardous or toxic substances or wastes, including
environmentally sensitive materials, such as batteries, solvents, lubricants,
degreasing agents, gasoline and resin. We must comply with certain requirements
for the use, management, handling, and disposal of these materials. We do not
maintain insurance for pollutant cleanup and removal. If we are found
responsible for any hazardous contamination, we may have to pay expensive fines
or penalties or perform costly clean-up. Even if we are charged, and later found
not responsible, for such contamination or clean up, the cost of defending the
charges could be high.

If we do not comply with government regulations, we may be unable to ship our
products or have to pay expensive fines or penalties.

We are subject to regulation by county, state and federal governments,
governmental agencies, and regulatory authorities from several different
countries. If we fail to obtain regulatory approvals or suffer delays in
obtaining regulatory approvals, we may not be able to marketing our products and
services, and generate product and service revenues. Further, we may not be able
to obtain necessary regulatory approvals. Although we do not anticipate problems
satisfying any of the regulations involved, we cannot foresee the possibility of
new regulations, which could adversely affect our business. Further our products
are subject to export limitations and we may be prevented from shipping our
products to certain nations or buyers.

We rely on proprietary designs and rights and if we have to litigate those
rights, our expenses could substantially increase.

Our success and ability to compete depend, in part, on the protection of our
designs and technology. In addition, our technology could infringe on patents or
proprietary rights of others. We have not undertaken or conducted any
comprehensive patent infringement searches or studies. If any third parties hold
any conflicting rights, we may be required to stop making, using or selling our
products or to obtain licenses from and pay royalties to others. Further, in
such event, we may not be able to obtain or maintain any such licenses on
acceptable terms, if at all. We may need to engage in future litigation to
enforce intellectual property rights or the rights of customers, to protect
trade secrets or to determine the validity and scope of proprietary rights of
others, including customers. This litigation could result in substantial costs
and diversion of resources and could materially and adversely affect our results
of operations.

Insiders can exert significant control over our policies and affairs.

As of March 31, 2004, our significant shareholders, Directors and Executive
Officers will, in the aggregate, beneficially own shares that can convert into
approximately 35.2 % of our outstanding common stock. These shareholders, if
acting together, will be able to exert substantial influence over all matters
requiring shareholder approval, including amendments to our Articles of
Incorporation, fundamental corporate transactions such as mergers, acquisitions,
the sale of the company, and other matters involving the direction of our
business and affairs. As a result, although you may vote your shares, you will
have limited influence on our business and management.

The holder of our Series B Preferred Stock can exercise significant control over
our affairs and business.

Ashford Capital, LLC, as the holder of the 10 outstanding shares of Series B
Stock, has the right to vote, with the holders of common stock, on any matter to
which the common stock holders are entitled to vote, the number of shares of
common stock into which the Series B Stock is convertible. In connection with
the purchase, Ashford obtained, but has not exercised, the right to appoint
three of five of our directors. The Series B Stock was purchased pursuant to a
Series B Convertible Preferred Stock Purchase Agreement we entered into with
Ashford Capital, LLC on December 27, 2001. In connection with the Series B
Agreement, we amended our Articles of Incorporation by filing a Certificate of
Designation with the Secretary of State of Colorado. Under the Series B
Designation, each share of Series B Stock is convertible into 2% of the
outstanding shares of our common stock, on a fully diluted basis, measured at
the time of the conversion. Ashford may convert the Series B Stock into shares
of common stock, at any time, however, shares not voluntarily converted by
December 27, 2004 of the Agreement shall automatically convert unless otherwise
extended.

We depend on management and other key personnel and we may not be able to
execute our business plan without their services.

Our success and our business strategy depend in large part on our ability to
attract and retain key management and operating personnel. Such individuals are
in high demand and are often subject to competing employment offers. We depends
to a large extent on the abilities and continued participation of our executive
officers and other key employees, particularly Mike Watts, CEO, Tom Thebes, CFO,
and Garth Barrett, president of our TSG subsidiary. We do not presently maintain
"key man" insurance on any employees. We believe that, as our activities
increase and change in character, additional, experienced personnel will be
required to implement our business plan. Competition for such personnel is
intense and we may not be able to hire them when required, or have the ability
to attract and retain them.

RISKS RELATED TO THIS OFFERING AND OUR STOCK

"Penny Stock" rules may make buying or selling our securities difficult.

Trading in our securities is subject to the Securities and Exchange Commission's
"penny stock" rules and it is anticipated that trading in our securities will
continue to be subject to the penny stock rules for the foreseeable future. The
Securities and Exchange Commission has adopted regulations that generally define
a penny stock to be any equity security that has a market price of less than
$5.00 per share, subject to certain exceptions. These rules require that any
broker-dealer who recommends our securities to persons other than prior
customers and accredited investors must, prior to the sale, make a special
written suitability determination for the purchaser and receive the purchaser's
written agreement to execute the transaction. Unless an exception is available,
the regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks
associated with trading in the penny stock market. In addition, broker-dealers
must disclose commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities they offer. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from recommending transactions in our securities,
which could severely limit the liquidity of our securities and consequently
adversely affect the market price for our securities.

Existing stockholders may experience significant dilution from the sale of
securities pursuant to our Investment Agreement with Dutchess.

The sale of shares pursuant to our Investment Agreement with Dutchess will have
a dilutive impact on our stockholders. As a result, our net income per share, if
any, could decrease in future periods, and the market price of our common stock
could decline. In addition, the lower our stock price at the time we exercise
our put option, the more shares we will have to issue to Dutchess to draw down
on the full equity line with Dutchess. If our stock price decreases, then our
existing stockholders would experience greater dilution.

The six accredited investors listed in this prospectus have paid less than the
then-prevailing market price of our common stock and Dutchess will pay less than
the then-prevailing market price of our common stock which may cause our stock
price to decline.

The six accredited investors paid $0.20 per share for our common stock. The
common stock to be issued under our agreement with Dutchess will be purchased at
a 7% discount to the lowest closing bid price for the ten days immediately
following our notice to Dutchess of our election to exercise our put right.
These discounted sales could cause the price of our common stock to decline and
you may not be able to sell our stock for more than you paid for it.

Our securities have been thinly traded on the over-the-counter bulletin board,
which may not provide liquidity for our investors.

Our securities are quoted on the Over-the-Counter Bulletin Board. The
Over-the-Counter Bulletin Board is an inter-dealer, over-the-counter market that
provides significantly less liquidity than the NASDAQ Stock Market or national
or regional exchanges. Securities traded on the Over-the-Counter Bulletin Board
are usually thinly traded, highly volatile, have fewer market makers and are not
followed by analysts. The Securities and Exchange Commission's order handling
rules, which apply to NASDAQ-listed securities, do not apply to securities
quoted on the Over-the-Counter Bulletin Board. Quotes for stocks included on the
Over-the-Counter Bulletin Board are not listed in newspapers. Therefore, prices
for securities traded solely on the Over-the-Counter Bulletin Board may be
difficult to obtain and holders of our securities may be unable to resell their
securities at or near their original acquisition price, or at any price.

We may not be able to access sufficient funds under the equity line of credit
with Dutchess when needed.

We will depend on external financing to fund our planned expansion. We expect
that these financing needs will be partially met by our agreement with Dutchess.
However, due to the terms of the Investment Agreement, this financing may not be
available in sufficient amounts or at all when needed. Additionally, pursuant
to our March 23, 2004 Private Placement Agreement, we can not utilize the Equity
Line under the Investment Agreement for a period of 6 months following the date
the shares underlying the private placement are registered. As a result, we may
not be able to grow our business as planned.

Investors must contact a broker-dealer to trade over-the-counter bulletin board
securities. As a result, you may not be able to buy or sell our securities at
the times that you may wish.

Even though our securities are quoted on the Over-the-Counter Bulletin Board,
the Over-the-Counter Bulletin Board may not permit our investors to sell
securities when and in the manner that they wish. Because there are no automated
systems for negotiating trades on the Over-the-Counter Bulletin Board, they are
conducted via telephone. In times of heavy market volume, the limitations of
this process may result in a significant increase in the time it takes to
execute investor orders. Therefore, when investors place market orders an order
to buy or sell a specific number of shares at the current market price it is
possible for the price of a stock to go up or down significantly during the
lapse of time between placing a market order and its execution.

We do not intend to pay dividends in the foreseeable future; therefore, you may
never see a return on your investment.

We do not anticipate the payment of cash dividends on our common stock in the
foreseeable future. We anticipate that any profits from our operations will be
devoted to our future operations. Any decision to pay dividends will depend upon
our profitability at the time, cash available and other factors. Therefore, you
may never see a return on your investment. Investors who anticipate a need for
immediate income from their investment should not purchase the securities
offered in this prospectus.

Our stock price is volatile and you may not be able to sell your shares for more
than what you paid.

Our stock price has been subject to significant volatility, and you may not be
able to sell shares of common stock at or above the price you paid for them. The
trading price of our common stock has been subject to wide fluctuations in the
past. During our last two fiscal years ending in 2002 and 2003, our common stock
has traded at prices as low as $0.06 per share and as high as $0.42 per share.

The market price of the common stock could continue to fluctuate in the future
in response to various factors, including, but not limited to:
- quarterly variations in operating results;
- our ability to control costs and improve cash flow;
- announcements of technological innovations or new products by us or our
competitors;
- changes in investor perceptions; and - new products or product enhancements by
us or our competitors.

The stock market in general has continued to experience volatility which may
further affect our stock price. As such, you may not be able to resell your
shares of common stock at or above the price you paid for them.

USE OF PROCEEDS
-----------------

This prospectus relates to shares of our common stock that may be offered and
sold from time to time by certain selling stockholders. We will not receive
proceeds from the sale of shares of common stock in this offering. However, we
will receive the proceeds from the sale of shares of common stock to Dutchess
under the Investment Agreement. The purchase price of the shares purchased
under the Investment Agreement will be equal to 93% of the lowest closing bid
price of our common stock on the Over-the-Counter Bulletin Board for the ten
days immediately following the date of our notice of election to exercise our
put.

Under the March 23, 2004 Private Placement we have agreed not to utilize the
Equity Line for a period of 6 months following the effective registration of the
shares underlying the Private Placement.

For illustrative purposes, we have set forth below our intended use of proceeds
for the range of net proceeds indicated below to be received under the
Investment Agreement. The table assumes estimated offering expenses of $25,000.

[Enlarge/Download Table]

Proceeds Proceeds
If 100% Sold If 50% Sold
------------- ------------
Gross proceeds . . . . . . . . . . . . . . . . . . . . . . . $ 3,500,000 $1,750,000
Estimated remaining associated professional fees of offering $ 25,000 $ 25,000
------------- ------------
Net proceeds . . . . . . . . . . . . . . . . . . . . . . . . $ 3,475,000 $1,725,000
============= ============

Priority Proceeds Proceeds
--------------- ------------- ------------
Sales and marketing. . . . . . . . . . . . . . . . . . . . . 1st $ 1,250,000 $ 600,000
Working capital and general corporate expenses . . . . . . . 2nd $ 1,150,000 $ 500,000
Inventory and raw materials. . . . . . . . . . . . . . . . . 3rd $ 550,000 $ 350,000
Machinery, new product development and testing . . . . . . . 4th $ 275,000 $ 150,000
Facilities and capital expenditures. . . . . . . . . . . . . 5th $ 250,000 $ 125,000
------------ ------------
$ 3,475,000 $1,725,000
============= ==========

Additionally, we could receive proceeds from the exercise of the following
warrants under certain circumstances.

- 15,000,000 "A" Warrants, exercisable at $0.24 per share. The "A" Warrants
expire March 23, 2006; and

- 15,000,000 "Green Shoe" Warrants, exercisable at $0.20 per share. The "Green
Shoe" Warrants expire 180 days after the effective date of this registration
statement.

We can not accurately predict when we will receive revenues pursuant to the
warrants because we do not know when the holders will choose to exercise the
warrants. It is also possible that the warrants will expire without being
exercised. Each accredited investor in the March 23, 2004 Private Placement has
contractually agreed to restrict its ability to convert or exercise warrants and
receive shares of our common stock such that the number of shares of common
stock held by it and its affiliates after such conversion or exercise does not
exceed 4.99% of our then issued and outstanding shares of common stock. In
addition, because certain of the warrants contain provisions allowing for a
cashless exercise under certain circumstances, we may not receive proceeds even
if the warrants are exercised. If we receive proceeds from the warrants, we
intend to use the proceeds for the purposes listed in the above chart.

DETERMINATION OF OFFERING PRICE

DILUTION
--------

Our net tangible book value as of December 31, 2003 was ($570,074), or ($0.0047)
per share of common stock. Net tangible book value is determined by dividing our
tangible book value (total tangible assets less total liabilities) by the number
of outstanding shares of our common stock. Since this offering is being made by
the selling stockholders, none of these proceeds will be paid to us, however,
the private offering proceeds will be paid to us and our net tangible book value
will be positively affected by this offering. Thus, our net tangible book value
will be impacted by the common stock to be issued to the six accredited
investors. The amount of dilution will depend on the initial shares issued and
the potential of the exercise of the A warrants and the "GreenShoe" warrants.
The following example shows the dilution to new investors at an offering price
of $.20 per share.

If we assume that we were to issue 65,000,000 shares of common stock at an
assumed offering price of $0.20 to $.024 per share, less $1,000,000 of offering
expenses, our net tangible book value as of December 31, 2003 would have been
$12,029,926, or $.09838 per share. This represents an immediate increase in net
tangible book value to existing shareholders of $0.10304 per share and an
immediate dilution to new shareholders of $0.0642 per share.

[Download Table]

Net tangible book value per share before this offering ($570,074)
Net tangible book value after this offering 12,029,926
Assumed average public offering price per share $0.2092
Net tangible book value per share after this offering $0.09837
Dilution of net tangible book value per share to new investors $0.0642
Increase in net tangible book value
per share to existing shareholders $0.10304

SELLING SECURITY HOLDERS

Based upon information available to us as of March 31, 2004, the following table
sets forth the name of the selling stockholders, the number of shares owned, the
number of shares registered by this prospectus and the number and percent of
outstanding shares that the selling stockholders will own after the sale of the
registered shares, assuming all of the shares are sold. The information provided
in the table and discussions below has been obtained from the selling
stockholders. The selling stockholders may have sold, transferred or otherwise
disposed of, or may sell, transfer or otherwise dispose of, at any time or from
time to time since the date on which they provided the information regarding the
shares beneficially owned, all or a portion of the shares of common stock
beneficially owned in transactions exempt from the registration requirements of
the Securities Act of 1933. As used in this prospectus, "selling stockholder"
includes donees, pledgees, transferees or other successors-in-interest selling
shares received from the named selling stockholder as a gift, pledge,
distribution or other non-sale related transfer.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated
by the Commission under the Securities Exchange Act of 1934. Unless otherwise
noted, each person or group identified possesses sole voting and investment
power with respect to the shares, subject to community property laws where
applicable.

[Enlarge/Download Table]

Number of Number of
Shares Shares
Beneficially Number of Beneficially
Owned Before Shares Owned After
the Offering Being Offered the Offering (1)
---------------- ---------------- ----------------
Dutchess Private Equities Fund, LP (2) -0- 20,000,000 -0-
-------------------------------------- ------------ ------------- -------------
Gamma Opportunity Capital Partners, LP(3) 7,500,000 7,500,000 -0-
-------------------------------------- ------------ ------------- -------------
Longview Fund, LP (4) 7,500,000 7,500,000 -0-
-------------------------------------- ------------ ------------- -------------
Alpha Capital Aktiengesellschaft (5) 7,500,000 7,500,000 -0-
-------------------------------------- ------------ ------------- -------------
Domino International Ltd.(6) 6,750,000 6,750,000 -0-
-------------------------------------- ------------ ------------- -------------
Magellan International Ltd. (7) 12,000,000 12,000,000 -0-
-------------------------------------- ------------ ------------- -------------
Mountain Ridge Capital, LLC. (8) 3,750,000 3,750,000 -0-
-------------------------------------- ------------ ------------- -------------
<FN>
1. The numbers assume that the selling stockholders have sold all of the shares
offered hereby prior to completion of this Offering.

2. Represents shares we may issue to Dutchess Private Equities Fund, LP pursuant
to an Equity Line of Credit. Since we are not obligated to use the Equity Line
of Credit and the amount of shares that we may issue pursuant to the Equity Line
is partly based on the future market price of our common stock, we can not
predict with accuracy the actual number of shares we may issue to Dutchess.
Michael Novielli and Douglas Leighton, are the Managing Members of Dutchess
Capital Management, which is the General Partner of Dutchess Private Equities
Fund, LP and, accordingly, may be deemed to have voting and dispositive power
over securities held for the account of Dutchess Private Equities Fund, LP.

3. Consists of 2,500,000 shares currently held by Gamma Opportunity Capital
Partners,LP and 2,500,000 shares Gamma Opportunity Capital Partners,LP may
acquire upon exercise of the "A" Warrant at $0.24 per share and 2,500,000 shares
Gamma Opportunity Capital Partners,LP may acquire at $0.20 per share upon
exercise of the "Green Shoe" Warrant. The selling stockholder has contractually
agreed to restrict its ability to convert or exercise its warrants and receive
shares of our common stock such that the number of shares of common stock held
by it and its affiliates after such conversion or exercise does not exceed 4.99%
of the then issued and outstanding shares of common stock. Jonathan Knight is
the President of Gamma Capital Advisors, Ltd., the general partner of Gamma
Opportunity Capital Partners, LP, and, accordingly, may be deemed to have voting
and dispositive power over securities held for the account of Gamma Opportunity
Capital Partners, LP.

4. Consists of 2,500,000 shares currently held by Longview Fund, LP and
2,500,000 shares Longview Fund, LP may acquire upon exercise of the "A" Warrant
at $0.24 per share and 2,500,000 shares Longview Fund, LP may acquire at $0.20
per share upon exercise of the "Green Shoe" Warrant. The selling stockholder has
contractually agreed to restrict its ability to convert or exercise its warrants
and receive shares of our common stock such that the number of shares of common
stock held by it and its affiliates after such conversion or exercise does not
exceed 4.99% of the then issued and outstanding shares of common stock. Peter T.
Benz is the Chief Executive Officer of Viking Asset Management, LLC, the general
partner of Longview Fund, LP, and, accordingly, may be deemed to have voting and
dispositive power over securities held for the account of the Longview Fund, LP.
Wayne H. Coleson is the Chief Executive Officer of Redwood Grove Capital
Management, LLC, the investment adviser of the Longview Fund, LP, and,
accordingly, may be deemed to have voting and dispositive power over securities
held for the account of the Longview Equity Fund, LP.

5. Consists of 2,500,000 shares currently held by Alpha Capital
Aktiengesellschaft and 2,500,000 shares Alpha Capital Aktiengesellschaft may
acquire upon exercise of the "A" Warrant at $0.24 per share and 2,500,000 shares
Alpha Capital Aktiengesellschaft may acquire at $0.20 per share upon exercise of
the "Green Shoe" Warrant. The selling stockholder has contractually agreed to
restrict its ability to convert or exercise its warrants and receive shares of
our common stock such that the number of shares of common stock held by it and
its affiliates after such conversion or exercise does not exceed 4.99% of the
then issued and outstanding shares of common stock. Konrad Ackerman is the sole
shareholder and sole director of Alpha Capital Aktiengesellscft and,
accordingly, may be deemed to have voting and dispositive power over securities
held for the account of Alpha Capital Aktiengesellscft.

6. Consists of 2,250,000 shares currently held by Domino International Ltd and
2,250,000 shares Domino International Ltd may acquire upon exercise of the "A"
Warrant at $0.24 per share and 2,250,000 shares Domino International Ltd may
acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant. The
selling stockholder has contractually agreed to restrict its ability to convert
or exercise its warrants and receive shares of our common stock such that the
number of shares of common stock held by it and its affiliates after such
conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of common stock. Deirdre M. McCoy is a Director of Domino International
Ltd and, accordingly, may be deemed to have voting and dispositive power over
securities held for the account of Domino International Ltd.

7. Consists of 4,000,000 shares currently held by Magellan International Ltd and
4,000,000 shares Magellan International Ltd may acquire upon exercise of the "A"
Warrant at $0.24 per share and 4,000,000 shares Magellan International Ltd may
acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant. The
selling stockholder has contractually agreed to restrict its ability to convert
or exercise its warrants and receive shares of our common stock such that the
number of shares of common stock held by it and its affiliates after such
conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of common stock. If the selling stockholder did not have such limitation,
the maximum number and percentage of shares the selling stockholder would be
able to acquire is 12,000,000 equal to 7.52% as of March 31, 2004. Anthony L. M.
Inder Rieden is the President of Magellan International Ltd and, accordingly,
may be deemed to have voting and dispositive power over securities held for the
account of Magellan International Ltd.

8. Consists of 1,250,000 shares currently held by Mountain Ridge Capital LLC and
1,250,000 shares Mountain Ridge Capital LLC may acquire upon exercise of the "A"
Warrant at $0.24 per share and 1,250,000 shares Mountain Ridge Capital LLC may
acquire at $0.20 per share upon exercise of the "Green Shoe" Warrant. The
selling stockholder has contractually agreed to restrict its ability to convert
or exercise its warrants and receive shares of our common stock such that the
number of shares of common stock held by it and its affiliates after such
conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of common stock. Richard M. Lirtzman is the managing member of Mountain
Ridge Capital, LLC and, accordingly, may be deemed to have voting and
dispositive power over securities held for the account of Mountain Ridge
Capital, LLC.

PLAN OF DISTRIBUTION

The selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The selling stockholders
may sell the shares from time to time:

- in transactions on the Over-the-Counter Bulletin Board or on any national
securities exchange or U.S. inter-dealer system of a registered national
securities association on which our common stock may be listed or quoted at the
time of sale; or
- in private transactions and transactions otherwise than on these exchanges or
systems or in the over-the-counter market;
- at prices related to such prevailing market prices, or
- in negotiated transactions, or - in a combination of such methods of sale; or
- any other method permitted by law.

The selling stockholders may effect such transactions by offering and selling
the shares directly to or through securities broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the shares
for whom such broker-dealers may act as agent or to whom the selling
stockholders may sell as principal, or both, which compensation as to a
particular broker-dealer might be in excess of customary commissions.

Dutchess Private Equities Fund, LP, Charleston Capital, LLC and any other
broker-dealers who act in connection with the sale of the shares pursuant to the
Equity Line are "underwriters" within the meaning of the Securities Act, and any
discounts, concessions or commissions received by them and profit on any resale
of the shares as principal may be deemed to be underwriting discounts,
concessions and commissions under the Securities Act. Additionally, the other
selling shareholders listed in this document may be deemed "underwriters."

On or prior to the effectiveness of the registration statement to which this
prospectus is a part, we will advise the selling stockholders that the
anti-manipulation rules under the Securities Exchange Act may apply to sales of
shares in the market and to the activities of the selling security owners and
any of their affiliates. We have informed the selling stockholders that they may
not:

- engage in any stabilization activity in connection with any of the shares;
- bid for or purchase any of the shares or any rights to acquire the shares,
- attempt to induce any person to purchase any of the shares or rights to
acquire the shares other than as permitted under the Securities Exchange Act; or
- effect any sale or distribution of the shares until after the prospectus shall
have been appropriately amended or supplemented, if required, to describe the
terms of the sale or distribution.

We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus available to the selling
stockholders and we have informed them of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby. We have informed the selling stockholders that they must effect
all sales of shares in broker's transactions, through broker-dealers acting as
agents, in transactions directly with market makers, or in privately negotiated
transactions where no broker or other third party, other than the purchaser, is
involved.

The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any broker-dealers, and any profits
received on the resale of shares, may be deemed to be underwriting discounts and
commissions under the Securities Act if the broker-dealers purchase shares as
principal.

In the absence of the registration statement to which this prospectus is a part,
certain of the selling stockholders would be able to sell their shares only
pursuant to the limitations of Rule 144 promulgated under the Securities Act.

We engaged Charleston Capital, LLC as our placement agent with respect to the
securities to be issued under the Equity Line of Credit. To our knowledge
Charleston Capital, LLC has no affiliation or business relationship with
Dutchess. We agreed to pay the Charleston Capital 1% of the gross proceeds from
each put with an aggregate maximum of $7,500 over the term of our agreement. The
Placement Agent agreement terminates when our Investment Agreement with Dutchess
terminates pursuant to the terms of that Investment Agreement.

CAPITALIZATION
--------------

The following table sets forth our cash and capitalization as of:

- on an actual basis: and

- as adjustment to reflect the issuance of up to 65,000,000 shares of our common
stock upon sale of Common shares.

This table should be read in conjunction with "Selected Financial Data",
Management Discussion and Analysis of Financial Condition and Results of
Operations" and our audited consolidated financial statements and unaudited
interim condensed consolidated financial statements and the noted thereto
included elsewhere in this prospectus.

[Download Table]

As of December 31, 2003
--------------------------
Actual As adjusted
--------- -----------
Cash and cash equivalents. 278,777 12,878,777
-------------------------- --------- -----------

Short Term Loans (1) . . . 536,162 536,162
-------------------------- --------- -----------
Long Term Liabilities (2). 209,422 209,422
-------------------------- --------- -----------
Share holders Equity . . . (261,006) 13,338,994
-------------------------- --------- -----------

Total Capitalization . . . 484,578 14,084,578
-------------------------- --------- -----------
<FN>

1. Short term debt consists of notes payable to various individuals.

2. Long term debt consists of the notes payable to various individuals.

3. Total capitalization is stated by not including cash and cash equivalents.

The above capitalization table presents the impact of the sale of 65,000,000
shares for a cash equivalent of $13,600,000 gross.

DIVIDEND POLICY
---------------

We do not pay dividends on our common stock and we do not anticipate paying
dividends on our common stock in the foreseeable future. We intend to retain our
future earnings, if any, to finance the growth of our business.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
--------------------------------------------------------------------------------
OPERATIONS
----------

INTRODUCTION

The following discussion is intended to provide an analysis of our financial
condition and should be read in conjunction with our financial statements and
the accompanying notes.

OVERVIEW

We have a limited operating history and conduct our operations through our
wholly owned subsidiary, Technical Solutions Group, Inc, or TSG, which
manufactures and sells mine protected vehicles.

Effective July 1, 2003, in an effort to focus on TSG as well as achieving
profitable operations, and as a result of the poor performance of the boat
division and the long lead times necessary to achieve success in that business,
we downsized and transferred the fire and rescue operations to a subsidiary
company, Rockwell Power Systems, Inc. Subsequently the shares held in Rockwell
Power Systems, Inc. were exchanged for 20,000,000 shares of common stock in
Xtreme Companies, Inc. and the shares received in the transaction were
distributed to shareholders of record on December 5, 2003. In addition, Force
Protection, Inc. received preferred shares from Xtreme Companies in the amount
of $500,000 which are convertible to common stock three years from the date of
the transaction. We have set up financial reserves for warranty expenses on past
sales and restructuring costs, and expect minimal internal resources to be
devoted to Xtreme Companies. The remaining boat assets which comprise the
majority of the assets, are subject to sale on or after March 31, 2004 under the
terms of the original purchase.

RESULTS OF OPERATIONS

Comparison of the twelve months ended December 31, 2003, and 2002.

In fiscal year 2003, we focused on restructuring and refocusing our business,
raising money, and writing off impaired assets to direct us toward a more
profitable product line.

Net sales for 2003 increased by $3,640,000 or 139% compared to 2002. During
2002, we acquired TSG, whose sales for 2002 were $2,200,000. The entire increase
in sales is attributable to the acquisition. Sales of boats were flat as
compared to the previous year, $462,000.

TSG began shipping production Buffaloes under a U.S. Army contract in June of
2003, which contract comprised over 90% of the sales of that division. The
improvement in operations is due to the sales increase in the TSG division and
the downsizing and eventual sale of the boat operations assets.

Cost of Sales for 2003 was $4,442,000, or 70.6% of sales, compared to 72% in
2002. This decrease in percentage is attributable to decreasing cost of sales
for boats and the production shift to MPV - particularly the Buffaloes. The
increase in dollars is a direct result of the 139% or $3,640,000 increase in
sales from the TSG acquisition.

Selling, general and administrative expenses for 2003, decreased by $2,612k to
$2,095,000 compared to $4,704,000 for 2002. The decrease is partially the result
of the sale of the boat division. Selling, general and administrative expenses
were substantially the same in both years and reflected asset write downs,
financing costs, outside professional services, and grants of stock to
employees.

We recorded a cumulative effect of changes in Net Income of $1,400,000 during
2002 for Goodwill. Impairment expense during 2003 was $1,917,747. As a result,
there is no Goodwill remaining on the Balance Sheet as of December 31, 2003.

Restructuring expenses are related to writing down the boat division assets to
fair market value, direct expenses and employee termination agreements involved
with the reorganization, and the transfer of the boat business.

As of December 31, 2003 we had $209,422 of total long term debt. $32,461 of
this debt is a 12% simple interest loan, with a maturity date of November 1,
2004. The remaining $176,961 are long-term payables with no effective or stated
interest or maturity dates. A majority of our interest expense for 2003,
excluding the interest paid on the debt mentioned above, finance charges, and
late fees, is the direct result of factoring receivables at 3% was $148,120 as
compared to 2002 factoring charges of $10,108.

On October 1, 2003 Force Protection discontinued operations of its fire rescue
boat division from its ongoing operations as the result of a partial the asset
disposal. Force Protection does not have any continuing involvement in the
operations after the disposal. The Loss from Discontinued Operations was
$2,932,179.

Our net loss for 2003 was $5,322,000 as compared to $5,373,000 for 2002. The
minor decrease is attributed to the sale of assets of the boat division and the
turnaround in operational profit attributable to the government program selling
TSG's Buffalos to the Army. Included in the 2003 loss was a loss of $1,917,000
for goodwill impairment and a loss on discontinued operations of $2,932,179 from
the boat division.

INVESTING ACTIVITIES.

Our capital expenditures for the twelve months December 31, 2003 were $125,008
as compared to $337,373 during 2002, related to investments in office and
manufacturing equipment. We anticipate that our capital expenditures during
2004 will increase because of improvements to operating efficiencies, and
relocation of our primary facilities and new contracts.

FINANCING ACTIVITIES.

During the year ended December 31, 2003, we sold a total of 25,924,000
restricted shares of common stock and warrants, respectively, to investors
pursuant to its private placement memorandum, generating net proceeds of
$1,299,900, pursuant to the sale of common stock units. For details about this
transaction, see Note 8 - Capital Stock Transactions.

On March 31, 2003, we began securing capital commitments through the issuance of
promissory notes. Under the terms of the promissory notes, the loans are
payable in six months with 8% interest; however, at the end of the term the loan
has an option to convert into Series C preferred stock. As of June 30, 2003, we
had obtained $725,000 in capital from note holders for 2003. Of this amount,
$50,000 was converted into series C preferred stock. The remaining notes will
have their terms extended and management anticipates that a significant portion
will convert to equity over the next six months.

TSG has entered into an agreement with GC Financial Service, Inc. by which this
firm may purchase from us certain accounts receivable and other rights,
including without limitations, all liens, security interest, warrants and
guarantees to secure payments of the accounts receivables. As of December 31,
2003 TSG had drawn approximately $6,138,434 gross, all of which has been repaid
at December 31, 2003.

On September 20, 2003, we entered into an equity line of credit agreement with
Dutchess Capital Management LLC. Under this agreement, Dutchess committed to
purchase up to $3,500,000 of the Registrant's restricted common stock over the
course of 36 months, after the date either free trading shares are deposited in
an escrow account or a registration statement of the stock has been declares
effective by the U.S. Securities and Exchange Commission. The amount that the
Dutchess will be entitled to request from each of the purchase "puts" will be
equal to 200% of the averaged daily volume ("ADV") multiplied by the average of
the 3 daily closing prices immediately preceding the put date. The ADV shall be
computed using the ten (10) trading days prior to the put date. The purchase
price will be the 93% of the market price, which is defined as the average of
the lowest closing bid price of the common stock during the pricing period
(which is the 5 consecutive trading days immediately after the put date).

Under the March 23, 2004 Private Placement we have agreed not to utilize the
Equity Line for a period of 6 months following the effective registration of the
shares underlying our March 23, 2004 Private Placement described immediately
below.

On March 23, 2004, we closed a Private Placement. This offering, sold to six
accredited investors, consisted of the following:
(a) 15,000,000 shares at $0.20 per share;

(b) An "A" Warrant for each share purchased, exercisable at $0.24 per share.
The "A" Warrants expire March 23, 2006; and

(c) A "Green Shoe" Warrant for each share purchased, exercisable at $0.20
per share. The "Green Shoe" Warrants expire 180 days after the effective date
of this registration statement.

(d) Each accredited investor in the March 23, 2004 Private Placement has
contractually agreed to restrict its ability to convert or exercise warrants and
receive shares of our common stock such that the number of shares of common
stock held by it and its affiliates after such conversion or exercise does not
exceed 4.99% of our then issued and outstanding shares of common stock.

LIQUIDITY AND CAPITAL RESOURCES.

As of December 31, 2003, cash and cash equivalents were $278,777 compared to
$144,476 as of December 31, 2002. We had raised net proceeds $1,299,900 through
a private placement during the nine months ended September 30, 2003. The March
2004 private placement increased liquidity by $2,669,987. During the First
Quarter of 2004 we have raised $746,250 through the exercise of warrants. The
Equity Line at 100% would generate $2,775,000 of additional liquidity. Our
principal sources of capital have been cash flow from operations, the sale of
common stock, promissory notes mentioned in financing activities, and borrowings
from G.C. Financial Services. Based on our current operating plan, we
anticipate that additional financing will be required to finance growth in
operations and capital expenditures, definitely in 2004 and possibly in 2005.

Presently, we are generating sufficient revenue to cover expenses and hire
employees. However, our near-term future liquidity will depend on our ability
to obtain necessary financing from outside sources.

INFLATION.

We do not believe that inflation has had or is likely to have any significant
impact on our operations.

CONTRACTUAL OBLIGATIONS

Technical Solution Group has a long-term lease of five years, with an additional
five year option, with Intertech Group, Inc., giving us a stable base for future
planning. Annual rent is $215,000 for the first year plus utilities, taxes and
maintenance, and $258,000 base rental for the next four years. For a total
obligation of $1,139,500. We also have general equipment monthly lease charges
of $2,118.

BUSINESS SEGMENT ANALYSIS

[Download Table]

Force Protection Performance - 2003 Segment Information
(000's)
(Discontinued) TSG
Boats MPV Consolidated
--------------- ------------ ----------- -----------------

Sales 462 6289 6247
Cost of Sales 315 4442 4757
-------------- ------------ ----------- -----------------

Gross Profit 146 1847 1490
G.P. % 31.6% 29.4% 23.8%

SG&A 2964 1469 2095
--------------- -------------- ------------ ----------- -----------------
Other
Income(Expense)

Segment P&L (2932) 378 (5322)
------------- -------------- ------------ ----------- -----------------

Mine protected vehicles provided 92.6% of the sales, resulting from 2 major
customers and 3 minor customers; in the USA and the UK; with one customer
accounting for 92.7% of the mine and blast protected sales.

During 2003, certain assets of the Boat Division were sold and we are obligated
to sell the remaining assets on or after March 2004. The division's results
have been accounted for as losses from discontinued operations of $2,932,000.

The TSG-MPV analysis is presented before inter-company eliminations. Corporate
expenses of $627,000 and interest expense of $233,000 have been excluded. There
were no material capital additions during 2003. The basis for accounting for
this segment is the same as for the company.

CRITICAL ACCOUNTING POLICIES.

Please refer to Note 1 in the Notes to Financial Statements.

DESCRIPTION OF BUSINESS
-----------------------

HISTORY

We organized under the laws of the State of Colorado, having been originally
incorporated in November 1996, as Boulder Capital Opportunities III. Effective
June 30, 1998, we acquired all assets and assumed all liabilities of Sonic Jet
Performance, LLC, a California limited liability company in the business of
producing and marketing recreational boats, jet boats, trailers, and related
accessories. On November 4, 1998, we changed our name to Sonic Jet Performance,
Inc. In 2002, we shifted our focus to vehicles that protect and save lives. As
part of the shift we acquired the shares of Technical Solutions Group, Inc., or
TSG, a development stage manufacturer of Mine Protected Vehicles based in
Charleston, South Carolina.

TSG was originally formed 1997 to supply specialty vehicles to military and law
enforcement agencies worldwide. The vehicles are used to transport personnel in
hostile areas that may include landmines and to locate and remove landmines. In
July of 2003 we determined that our limited resources would be better focused on
TSG and began the process of moving our headquarters to South Carolina and
realizing the most value for our existing watercraft business. From July through
September we negotiated and finalized an agreement with investors that was
consummated in October of 2003 to sell certain assets related to our Fire Rescue
Boat business we retain a significant portion of our boat assets subject to an
agreement to sell the remaining assets to the aforementioned investors.

In August of 2003 we changed our name to Force Protection, Inc. to reflect our
focus on Mine Protected Vehicles. We now own 100% of our subsidiary Technical
Solutions Group and are focused on our primary products which are Mine Protected
and Armored Land Vehicles produced in 86,000 square feet of office, and heavy
manufacturing space in Ladson, South Carolina.

OVERVIEW

We design, manufacture and market mine protected vehicles. These products are
designed to protect and save lives. We are an Over-the-Counter company, publicly
traded on the Over the Counter Bulletin Board under the ticker symbol "FRCP.OB."

We are headquartered in Ladson, South Carolina. TSG designs, manufactures and
markets mine-protected vehicles used by military organizations domestically and
abroad for transportation, demining, and special applications. We are a complete
design-to-manufacturing organization, creating or licensing designs, and
creating tooling, molds, and parts necessary to assemble the products in-house.

INDUSTRY OVERVIEW

The basic concept of Mine Protected Vehicles was developed in Rhodesia and South
Africa in response to the landmine problems arising from the wars in Southern
Africa. The vehicles were designed to protect personnel during transport,
removal of Unexploded Ordnance, route clearance, humanitarian de-mining, and
other missions that require protection from landmines and hostile fire. The
technology has been developed and used in several parts of the world,
principally Africa, over the last 20 years in response to the intense use of
landmines in that region.

Landmines are a weapon of choice for terrorists and insurgent groups because
they are highly effective yet relatively low cost. Rising populations in heavily
mined regions and the need to utilize and develop such areas means the problem
can no longer be ignored. With increasing world tensions, there is a need for
vehicles that can provide a protection against these threats during a variety of
missions. Such missions include troop transport in and around Unexploded
Ordnance or mine threat areas as well as route clearance and humanitarian
de-mining - which require entrance into known mine fields.

Mine protected vehicles have been purchased worldwide, principally in Africa,
with additional purchases by several NATO allied countries. Troop movements in
overseas operations face a continuous threat because of the use of land mines or
the possibility of ambush and enemy fire. Vehicles that move troops or ordnance
economically and are protected against ballistic, incendiary, and landmine
hazards are useful in these situations.

This is a pressing issue for the U.S. and its allies throughout the world. The
recent deaths of American and Allied personnel throughout Iraq, Afghanistan, and
an earlier death in Kosovo of an American solder while riding in an up-armored
M998 High Mobility Multi-purpose Wheeled Vehicle highlights the need for mine
protected vehicles.

Personnel transport missions create the greatest portion of demand for Mine
Protected Vehicles. Various types of landmine and Unexploded Ordnance clearance
missions also generate demand.

- Embassies, consulates, and other U.S. government agencies require vehicles to
safely transport personnel at low cost. The modified Chevrolet Suburban or High
Mobility Multi-purpose Wheeled Vehicle s does not provide adequate protection
against high-powered automatic rifles or explosives as demonstrated in Iraq and
Afghanistan.

- U.S. Law enforcement agencies have a pressing need to move personnel safely in
dangerous situations, such as riots or standoffs with armed militant groups as
demonstrated in a bank robbery stand-off in Los Angeles. Mine protected vehicles
are used around the world in mine problem areas by most military organizations.
The current "hot spots" in which the U.S. and other allied countries operate,
and the likely areas for the future in the "War on Terrorism", are all extremely
mined. Currently there are no current technologies available to detect mines
effectively enough to avoid them, so mine protected vehicles are valuable for
the U.S. to protect its troops.

OUR PRODUCTS

The specialty vehicle business requires experience with blast protection and
vehicle design, heavy manufacturing equipment and facilities, and knowledge of
target customers. The cycle for product entrance into this market is long and
complex. We have attained credibility with our products, and have sold
production vehicles to the U.S. and British militaries. We have moved our
products into the "limited deployment" stage.

BUFFALO

A Mine Resistant Vehicle with multiple mission configurations and field
reparability. This design mates a monocoque capsule protection, meaning the hull
is built as a single unit, with a Peterbilt or other U.S. manufactured truck.
The Buffalo offers 45-pound wheel and 30-pound centerline protection, along with
standard ballistic protection, which is 7.62mm NATO ball which is the
international standard for ballistics, upgradeable to Dragunov Anti-Personnel
round protection. The roof is identical to the sides, providing equal overhead
ballistic and splinter protection, creating a full 360-degree occupant
protection, a capability that is essential for urban fighting. Self Forming
Fragmentation Plates, which protect the occupants of the vehicle against newer
landmine technology, are available as an option. C-17 transportable

COUGAR/TEMPEST

The Cougar is a versatile, multi-purpose vehicle configured to satisfy a wide
variety of mission requirements. The purpose-built monocoque capsule is designed
to protect both the driver and crew from both ballistic and mine/blast threats,
and is mated with Peterbilt and Marmon-Herrington commercial automotive
technology to produce a user-friendly and adaptable vehicle. The Cougar can be
configured to serve as a mine protected 10 - 16 seat troop transport vehicle, a
weapons platform, a law enforcement special response vehicle, an EOD/Range
Clearance vehicle, or a VIP Protection vehicle. Available in various
configurations including: 4x2, 4x4, and 6x6. The Cougar is protected to 30
pounds of TNT on any wheel and 15 pounds of TNT on the centerline and is C-130
transportable. The Tempest is a heavy duty version of the Cougar that adds a
Self Forming Fragment Plate to provide protection against state-of-the art Self
Forming Fragment "Tank Killer" mines.

TYPHOON

Typhoon is the ultimate urban combat vehicle. It is a multi-role armored
vehicle. Typhoon has an improved hull, upgraded ballistic protection, enhanced
access, reduced profile, and a remote controlled weapons platform. Designed to
seat eight passengers and upgradeable with an interior based customer
requirements. The vehicle can withstand a single anti-tank land mine explosion
anywhere under the vehicle and a double anti-tank land mine on any wheel. The
Typhoon has ballistic protection to 7.62 x 51mm NATO AP, which can be increased
to Dragunov Armor Piercing rounds.

LION

The Lion has an all-welded armored capsule and glass that will resist small arms
fire to 7.62 x 51 mm. The unique capsule shape insures limited damage to the
capsule when encountering anti-tank land mines. The capsule is purposely
designed to withstand a single land mine explosion under any wheel and anywhere
underneath the vehicle.

All products have acceptable power/weight ratios.

CUSTOMER ACTIVITY

Twelve Buffalo mine protected vehicles have been delivered to the U.S. Army
prior to the end of 2003. One more Buffalo was shipped during January 2004. The
vehicles were extensively tested prior to selection by the Army. In addition, in
2002 we delivered eight Cougar/Tempest vehicles to the British Ministry of
Defense. These vehicles are part of an Urgent Operational Requirement, and the
Cougar beat out several competitors for this contract, including vehicles from
Vickers, Australian Defense Industries, and KMW Industries.

In tests at the U.S. Army proving grounds, the Buffalo blast capsule protected
both the occupants and the critical automotive components from the effects of a
mine blast. The vehicles integrate a blast resistant capsule with a truck engine
and drive train, but have an updated design that uses American-made trucks. A
key aspect of mine protected vehicle design is the dispersion of hot gasses
released by a mine blast. The force of the blast is routed along the V hull and
dissipated to the side of the vehicle so that the vehicle is not lifted or
severely damaged by the blast. It is the absence of this V hull design that
makes it extremely difficult to properly protect a standard vehicle, by
retrofitting armor plates. The design must be undertaken from the beginning with
mine protection as the primary design criteria.

We are using the Buffalo platform for a special project for the US Navy and
continue to ship spares and steel wheels to the US Army. On March 31, 2004 we
announced that TSG had signed a non-exclusive agreement with U.S. Marketing
Group LLC to develop a commercial U.S. distribution channel for its Lion. One
Lion has been ordered as a demonstration vehicle.

COMPETITION

We are subject to significant competition that could harm our ability to win
business and increase the price pressure on our products. We face strong
competition from a wide variety of firms, including large, multinational
vehicle, defense and aerospace firms such as Alvis, Vickers, Australian Defense
Industries, KMW Industries and Textron. Most of our competitors have
considerably greater financial, marketing and technological resources than we do
which may make it difficult to win new contracts and we may not be able to
compete successfully. Certain competitors operate fabrication facilities and
have longer operating histories and presence in key markets, greater name
recognition, larger customer bases and significantly greater financial, sales
and marketing, manufacturing, distribution, technical and other resources, as a
result, these competitors may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements. They may also be able to
devote greater resources to the promotion and sale of their products.

We believe our competitive advantages include:

- as an American company, with access to American commercial drive train
technology, and the after market support system,
- as an American producer of mine protected vehicles many countries wish to
purchase from America rather from the third world,
- our mine protected vehicles are effective and were tested and accepted by the
U.S. Army and the British Ministry of Defense,
- access to low cost heavy manufacturing facilities,
- updated designs will take time for competitors to develop.

SALES AND MARKETING

We use various means of marketing our products including our web site,
brochures, and independent referral sources which assist us in identifying
opportunities for our products and services. Any payments to referral sources
are negotiated on a case by case basis and dependent on various factors
including the quality of the referral, the opportunity, the role of the referral
sources in the sale, and the potential revenues associated with a specific
opportunity. Many of these referral sources have established relationships with
the potential customers through the sale of other products and services.

Our primary sales and marketing efforts are done through employees including the
various senior executives in our company who call on prospective customers and
foreign agents representing various governments and agencies who would have an
interest in our product offerings. Currently our primary sales staff resides in
the states of South Carolina and Connecticut, and we have a European presence
with an employee based out of England. We emphasize attendance at trade shows
and conferences and actually demonstrate our protected vehicles as much as is
practical. We do a limited amount of media advertising in closely targeted
publications.

We offer vehicle technology mated with the latest protection technology, all
from the design team with a history in vehicle mine protection. We intend to
participate in the growth of the Security and Defense Market's increased demand
for protection by focusing on sales to the Government and Military markets. We
participate in major shows involving countermine operations and technology,
military vehicle, law enforcement technology, and military force protection.

EMPLOYEES

As of March 31, 2003, we had 29 employees and 4 consultants located in the
United Kingdom and in South Africa. Employees can be broken down to 22 factory
workers, 3 sales, 3 administrative and 5 management personnel. The Company is
not party to any collective bargaining agreement.

DESCRIPTION OF PROPERTY
-----------------------

On October 10, 2003, TSG entered into a lease agreement with Intertech Group,
Inc. to lease 86,000 square feet of manufacturing and administrative space at
9801 Highway 78, Building No. 3, Ladson, South Carolina. The term of the lease
is five years starting October 15, 2003, with an option to renew for another
five years. The space substantially increases our ability to qualify for and
fulfill larger contracts for our mine-protected vehicles. Annual rent is
$215,000 for the first year plus utilities, taxes and maintenance, and $258,000
base rental for the next four years. The prior landlord has terminated our lease
at our prior headquarters located at 2031 Avenue B, Building 44, North
Charleston, South Carolina, in exchange for payment of rent at this prior
facility through November 30, 2003.

MANAGEMENT
----------

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following table sets forth certain information about our directors and
executive officers.

[Download Table]

Name Age Position

Michael Watts. . . 56 Chief Executive Officer, Director

Tom Thebes . . . . 48 Chief Financial Officer

Madhava Rao Mankal 52 Director

Scott R. Ervin . . 49 Director

Frank Kavanaugh. . 43 Director of Business Development, Director

Gale Aguilar . . . 71 Director

BIOGRAPHIES OF EXECUTIVE OFFICERS AND DIRECTORS

Michael Watts, Chief Executive Officer/Director
Mr. Watts joined us in July of 2002 as General Manager of TSG, International and
was appointed Chief Executive Officer on May 29, 2003. Mr. Watts has more than
30 years of experience as an executive and investor. He has served as CEO of
four private companies in the computer hardware, computer software, consumer
electronics, and semiconductors fields - two of which he founded. In addition,
he has served as a management consultant to numerous companies, including BNP
Paribas and Wells Fargo Bank, in varieties of industries. From March 1998 to
February 2002, Mr. Watts was self employed as an investor. For the period of
2002 to July 2002, he served as a management consultant to visual enVisual
Enterprises, Inc. a software company Mr. Watts received a Bachelor of Science
degree in Electrical Engineering with high honors from Colorado State University
in 1969 and majored in Finance in the MBA program at the University of Colorado
in 1973. He holds five patents, including one for the laser bar code scanner and
four related to software.

Tom Thebes, Chief Financial Officer
Mr. Thebes joined us in November of 2003 as Chief Financial Officer. Prior to
joining us and from November 2003, Mr. Thebes served as the Program Manager for
Flextronics. From 2001 through 2003, Mr. Thebes was a Financial Consultant for
ID Technologies and GlaxoSmithKline. From 1999 to 2001, Mr. Thebes was the
Controller, Manufacturing and International Operation for Insilco Technologies.
Mr. Thebes has over 22 years of operational management and strategic business
analysis experience in both the federal sector and private industry. He has
spent over 12 years conducting Activity Based Management studies, business
process reengineering, benchmarking and strategic planning for Fortune 100 and
Fortune 1000 companies. Mr. Thebes holds an undergraduate degree from Miami
University and an MBA from the University of Toledo.

Madhava Rao Mankal, Director
Mr. Mankal served as Chief Financial Officer from May 1999, and was appointed
President in January of 2002. With the sale of our California operations, his
role as Chief Financial Officer ended effective November 30, 2003 and he
continued to act as an employee until December 31, 2003 whereafter he agreed to
act as a consultant until March of 2004 and remain a director of the company.
Prior to that, Mr. Mankal served as Controller of American Power Products, Inc.
between 1998 and 1999, and Manager at American Power Products, Inc., from
September 1994 to 1998. He has more than 28 years of experience in senior
positions in various manufacturing and service organizations. He is Qualified
Chartered Accountant and Cost Accountant and a member of the Institute of
Chartered Accountant, Institute of Cost and Works Accountants, and Institute of
Management Accounting.

Frank Kavanaugh, Business Development, Director
Mr. Kavanaugh has worked for the Company since May of 2002 in our fire/rescue
business, and in January of 2003 became responsible for strategic and investment
relationships. In October of 2003 he was appointed to the board of directors.
Over the last 8 years, as a principal in Ashford Capital, LLC and its
predecessor he has served in an interim capacity in several executive positions
including operational management roles at NewGen Systems, and several portfolio
companies. He co founded and served as President of QuickStart Technologies and
held positions at Microsoft and Hewlett Packard. His education includes: a BS
degree in Information & Computer Science, from University of California, Irvine
and an MBA from Pepperdine University. He also serves on several community
boards including the Child Guidance Center of Orange County, and the board of
advisors at Chaprman University's Leatherby Center.

Scott R. Ervin, Director
Mr. Ervin acted initially as a director from June through October 2001, and has
served on the board continuously since February 2002. He is an attorney, having
graduated from Boston College Law School (JD 1984) and is licensed to practice
in New York and Texas. From 1984 through 1991 Mr. Ervin was associated with the
New York law firm of Burlingham, Underwood and from 1991 through 1999 he
practiced law with the law offices of Dr. Abdelrahman Abbar, in Jeddah Saudi
Arabia. Since 1999 Mr. Ervin has been in private practice in Austin Texas. He is
a director of Interlex, Inc a Texas corporation and a director of The
Behavioural Sciences Foundation, a non-profit scientific research foundation. He
also acts as trustee for several private trusts.

Gale Aguilar, Director
Mr. Aguilar has served as our director since October of 2003. Currently he is
the President and a member of the Board of Directors at MITEM Corporation which
he joined in 1995. His experience includes SF2 Corp, Stardent Corporation, and
Prime Computer as VP of Marketing Senior, and VP of Corp. Strategy and Corp.
Development. In addition, he worked at IBM for 27 years in several positions
including \ Director of Marketing and Service General Products Division, and IBM
Director of Product Marketing, and Director of Systems Strategy. His experience
includes active duty in the Army 1951-55. He participates on several corporate
and charitable boards.

NUMBER AND ELECTION OF DIRECTORS

We have five directors. Directors are elected annually.

LIMITATIONS ON OFFICER AND DIRECTOR LIABILITY

Our Articles of Incorporation limit the liability of our directors or our
shareholders for monetary damages for breach of fiduciary duty as a director
except, for (i) liability based on a breach of the duty of loyalty to us or our
shareholders; (ii) liability for acts or omissions not in good faith or that
involved intentional misconduct or a knowing violation of the law; (iii)
liability based on the payment of an improper dividend or an improper repurchase
of our stock under California law, or violations of federal or state securities
laws; (iv) liability for transactions from which the director derived an
improper personal benefit; or (v) liability for any act or omissions occurring
prior to the effective date of the Articles of Incorporation.

Our Bylaws provide that we shall indemnify a person made or threatened to be
made a party to a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding by reason of such
person's present or former capacity as our director, officer, employee or agent
if such person: (a) has not been indemnified by another organization or employee
benefit plan for the same judgment, penalty or fine; (b) acted in good faith;
(c) received no improper personal benefit and, if a director, had no improper
conflict of interest; (d) in the case of a criminal proceeding, had no
reasonable cause to believe the conduct was unlawful; and (e) reasonably
believed that the conduct complained of was in our best interests or was not
opposed to our best interests.

The Colorado Business Corporation Act requires that unless prohibited or limited
by our Articles of Incorporation or Bylaws, we must indemnify our current and
former directors, officers and employees who are made or threatened to be made a
party to certain proceedings by reason of their present or former official
capacity with us, against judgments, penalties, fines, settlements, and
reasonable expenses (including attorney's fees) incurred in connection with such
proceedings. "Proceeding," means a threatened, pending or completed civil,
criminal, administrative or investigative action, including a derivative action
in our name. Reference is made to the detailed terms of the Colorado statute for
a complete statement of such indemnification right.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling us under the
foregoing provisions, we have been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act, and
is unenforceable for that reason.

EXECUTIVE COMPENSATION
----------------------

Set forth in the following table is certain information relating to the
approximate remuneration we paid during the past fiscal year to our president
and each of our most highly compensated executive officers whose total
compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

The following table presents a summary of the compensation paid to our Chief
Executive Officer and other highly compensated employees during the last three
fiscal years and the first three quarters of 2003. Except as listed below, there
are no bonuses, other annual compensation, restricted stock awards or stock
options/SARs or any other compensation paid to executive officers.

The following table presents a summary of the compensation paid to our Chief
Executive Officer and other highly compensated employees during the last four
fiscal yearsExcept as listed below, there are no bonuses, other annual
compensation, restricted stock awards or stock options/SARs or any other
compensation paid to executive officers.

[Enlarge/Download Table]

Long Term Compensation

Annual Compensation Awards Payouts
a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Bonus Other Annual Restricted Securities LTIP All Other
Position Salary Compensation Stock Underlying Payouts Compensation (1)
Year ($) ($) Award(s)($) Options/SARs($) (#) ($) ($)
=============================================================================================================
Madhava Rao
Mankal 2001 64,000 0 0 0 0 0 0
CEO/President 2002 65,000 0 0 0 500,000 0 0
CFO, Director 2003 64,800 0 0 0 1,000,000 0 0
=============================================================================================================
Mike Watts 2001 0 0 0 0 0 0 0
CEO/President 2002 4,500 0 0 0 2,250,000 0 77,000
Director 2003 180,500 0 0 0 2,000,000 0 0
=============================================================================================================
Garth Barrett
TSG President 2001 0 0 0 0 0 0 0
2002 60,000 0 0 0 0 0 0
2003 120,000 0 0 0 2,250,000 0 0
=============================================================================================================
Frank Kavanaugh
Business 2001 0 0 0 0 0 0 0
Development, 2002 60,000 0 0 0 500,000 0 32,000
Director 2003 146,923 0 0 0 750,000 0 0
=============================================================================================================

<FN>

(1) Consists of consulting fees for services to the company.

EMPLOYMENT AGREEMENTS WITH KEY PERSONS

During the second quarter of 2003, we negotiated certain changes in employment
agreements with certain of our executive officers:

Under a previous agreement dated June 20, 2002 and effective on July 1, 2002 we
were to issue our CEO, Michael Watts, 2,250,000 restricted shares of common
stock vesting immediately and delivered no later than one-year from the date of
this agreement. In addition, he was to receive a warrant for 2,000,000
restricted shares of common stock, exercisable at $0.07 per share, vesting on
the first and second anniversary dates of the agreement. Finally, he was to
receive a warrant to purchase 10 shares of Registrant Series C preferred stock
or its equivalent in our common stock. These issuances were modified by the
board of directors to be grants, effective July 1, 2002, of 2,000,000 restricted
shares of common stock, plus a warrant for 1,000,000 restricted shares of common
stock at $0.07 a share vesting on June 20, 2003, plus a warrant for 1,000,000
restricted shares of common stock vesting on June 20, 2004.

On April 1, 2003, we entered into an agreement with Frank Kavanaugh, our
director of business development, for a salary, and a grant of 500,000
restricted shares of our common stock. Also, during June 2003, Mr. Kavanaugh was
granted 750,000 restricted shares of common stock that were committed in June of
2002, for consulting services as interim general manager during the second and
third quarters of 2002.

In connection with our restructuring, we entered into a verbal termination
agreement with Madhava Rao Mankal in connection with his prior employment
agreement. The agreement stipulates that he remain our chief financial officer
until November 30, 2003 and then act as our consultant until December 31, 2003
at the same salary, without benefits, and receive a grant of 600,000 restricted
shares of stock in September, 2003. On December 31, 2003 Mr. Mankal will be paid
90 days termination based on his annual rate of salary of $64,800. In June 2003,
Mr. Mankal received 200,000 restricted shares of common stock for the first and
second quarters of 2003 in connection with his employment contract dated March
17, 2003, and in September 2003 he received 600,000 restricted shares of common
stock in connection with his termination agreement. The balance of any shares
owed under his original employment agreement will be paid within 45 days of his
employment termination.

DIRECTOR COMPENSATION

Mr. Scott Ervin was awarded 600,000 shares in 2003 for services rendered during
2002 and 2003 as a director. The shares were valued at $42,000, using $0.07 per
share for services rendered to the Company.

We currently reimburse Directors for travel expense associated with their work
for the company and have agreed to establish a compensation plan to be submitted
for approval by shareholders at our annual meeting in 2004.

STOCK OPTION PLANS

On September 30, 2003, we adopted a Directors and Consultants Retainer Stock
Plan. A total of 5,000,000 shares can be issued under this plan and were
registered under a Form S-8 registration statement filed with the Securities and
Exchange Commission on November 7, 2003. The purpose of the plan is to enable us
to attract and retain both employee and non-employee directors and consultants
by paying their retainer or fees in the form of free trading shares of our
common stock. As of March 31, 2004, a total of 4,000,000 shares have been issued
or committed under the plan.

RELATED PARTY TRANSACTIONS
--------------------------

On September 30, 2002 the Series C shareholders agreed to amend and restate the
Certificate of Designation of Series C Convertible Preferred for Sonic Jet
Performance. Pursuant to the agreement and upon finalization of the amendment of
the Series C documents, the stock shall be voted equally with the shares of the
Common Stock of the Corporation and not as a separate class, at any annual or
special meeting of shareholders of the Corporation, and may act by written
consent in the same manner as the Common Stock, in either case upon the
following basis: the holder of the shares of Series C Stock shall be entitled to
such number of votes as shall be equal to the aggregate number of shares of
Common Stock into which such holder's shares of Series C Stock are convertible
immediately after the close of business on the record date fixed for such
meeting or the effective date of such written consent. Furthermore, the parties
also agreed that each 10 shares of Series C stock shall be convertible into two
percent of our common stock outstanding at the time of conversion.

The Series B and C shareholders agreed to let us file a registration statement
without including those shareholders in the registration statement as was their
right under the original purchase instruments. The board of directors agreed to
extend the mandatory conversion date of the Series B and C share to December 27,
2004 unless otherwise modified by mutual agreement.

As part of our purchase of TSG International, Inc. (which owns 100% of Technical
Solutions Group, Inc.,) in July 2002, Ashford Capital, LLC, an advisor to the
transaction and our shareholder, received shares equal to 10% of TSG
International, Inc. in the form of a Series A preferred stock. An agreement was
reached in April of 2003 under which Ashford Capital, LLC could exchange each
shares of TSG International, Inc. Series A preferred stock for 50 shares of the
Registrant's Series C preferred shares, by notifying us by October 15, 2003.

In September 2003, Ashford Capital, LLC and Mr. Watts reached an agreement under
which the TSG Series A preferred shares and the rights associated with the
Series A preferred shares were purchased by Mr. Watts in a private sale between
the parties and the right to exchange the shares was assigned to Mr. Watts by
Ashford Capital LLC. On October 12, 2003, we were notified of Mr. Watt's
intention to exercise his option to exchange his TSG International, Inc.
preferred stock for our Series C preferred stock. Under the terms of the
agreement, Mr. Watts exchanged all his shares of TSG International, Inc. stock
for 50 of our shares of Series C preferred stock effective October 15, 2003. As
a result, we hold 100% of TSG International, Inc.

MARKET FOR OUR COMMON STOCK
---------------------------

Our common stock is traded on the OTC Bulletin Board under the symbol "FRCP.OB."
Our common stock began trading on the OTC Bulletin Board on December 29, 1998.
Before our listing on the OTC Bulletin Board none of our securities were traded
in the public market. Bid and ask quotations for our common shares are routinely
submitted by registered broker dealers who are members of the National
Association of Securities Dealers on the NASD Over-the-Counter Electronic
Bulletin Board. These quotations reflect inner-dealer prices, without retail
mark-up, markdown or commission and may not represent actual transactions. The
following table shows, for the periods indicated, the high and low closing sales
prices per share of our common stock.

[Download Table]

High Low
2001
First Quarter $0.22 $0.05
Second Quarter $0.17 $0.05
Third Quarter $0.20 $0.04
Fourth Quarter $0.07 $0.02

2002
First Quarter $0.22 $0.08
Second Quarter $0.42 $0.06
Third Quarter $0.29 $0.07
Fourth Quarter $0.25 $0.10

2003
First Quarter $0.27 $0.10
Second Quarter $0.21 $0.12
Third Quarter $0.13 $0.07
Fourth Quarter $0.11 $0.07

2004
First Quarter $0.59 $0.07

SHARE HOLDERS

As of March 31, 2004, there were 408 shareholders of record of our common stock.

REPORTS TO SECURITY HOLDERS
---------------------------

We are subject to the information requirements of the Securities Exchange Act of
1934, as amended. In accordance with those regulations, we file periodic
reports, and other information with the Securities and Exchange Commission. Our
reports and other information can be inspected and copied at the SEC's Public
Reference Room at 450 Fifth Street N.W., Washington D.C. 20549. You can obtain
information on the operations of the Public Reference Room by calling the SEC at
(800) SEC-0330. Information also is available electronically on the Internet at
http://www.sec.gov.

We will provide without charge to each person to whom a copy of this prospectus
is delivered, upon oral or written request of such person, a copy of any or all
documents which are incorporated by reference in this prospectus, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests for such documents should be
directed to: Force Protection, Inc., 9801 Highway 78, #3 Ladson, South Carolina
29456. Our telephone number is (843) 740-7015.

We intend to furnish our shareholders with annual reports containing audited
financial statements and quarterly reports containing financial information.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ND MANAGEMENT
--------------------------------------------------------------------

The following table sets forth, to our knowledge, certain information concerning
the beneficial ownership of our common stock as of March 31, 2004 by each
stockholder known by us to be (i) the beneficial owner of more than 5% of the
outstanding shares of common stock, (ii) each current director, (iii) each of
the executive officers named in the Summary Compensation Table who were serving
as executive officers at the end of the 2002 fiscal year and (iv) all of our
directors and current executive officers as a group:

[Enlarge/Download Table]

Name of Number of Shares Percentage
Beneficial Owner Beneficially Owned (1) Ownership (2)
---------------- ---------------------- -------------
Michael Watts (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,729,506 12.3%
Madhava Rao Mankal (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,920,936 1.3%
Tom Thebes (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,303,516 .9%*
Scott Ervin (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,168,516 .8%*
Frank Kavanaugh (6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,923,675 20.0%
Gale Aguilar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0%*
Ashford Capital, LLC (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,923,675 20.0%

All directors and executive. . . . . . . . . . . . . . . . . . . . . . . . . . . 63,046,150 35.2%
officers as a group (6 persons)
* less than 1%
<FN>

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power with
respect to shares beneficially owned. Shares of Common Stock subject to options
or warrants currently exercisable are deemed outstanding for computing the
percentage ownership of the person holding such options or warrants, but are not
deemed outstanding for computing percentage ownership of any other person.

(2) The shares of common stock outstanding as of March 31, 2004 are 151,454,698.

(3) Michael Watts' common stock holdings as of March 31, 2004 are 3,901,206 and
he owns 50 Series C preferred shares convertible to 16,828,300 common shares. He
purchased 564,706 common shares in 2002. Under the terms of his employment
contract he received 2,250,000 common shares and has an option to purchase
2,000,000 common shares at 7 cents. He is the CEO and a director of the Company.

(4) Madhava Rao Mankal's common stock holdings as of March 31, 2004 are
1,335,067. His son Krishna Mankal has 282,353 from the conversion of 1 Series C
preferred share, and his wife Sharada Mankal has 1 Series C preferred share that
is convertible to 303,516 common shares. He is a director and the former CEO and
CFO.

(5) Scott Ervin's common stock holdings as of March 31, 2004 are 865,000 common
shares and 1 share of Series C he purchased, which is convertible into 303,516
shares of common stock. He is a director.

(6) Frank Kavanaugh's direct common stock holdings as of March 31, 2004 are 0.
His indirect holdings are 37,923,675 as a principal in Ashford Capital, LLC (See
(7) below). Through Ashford Capital he indirectly owns 60,000 common shares and
10 shares of Series B preferred stock. He is non-executive Vice President of
Business Development and a director.

(7) Ashford Capital, LLC's common stock holdings as of March 31, 2004 are 60,000
and they own 10 shares of Series B preferred stock which is convertible into
37,923,675 common shares as of March 31, 2004. The business address of Ashford
Capital, LLC is 3419 Via Lido, #470, Newport Beach, CA 92663.

(8) Thomas Thebes' common stock holdings as of March 31, 2004 are 0 and 1 Series
C preferred share convertible to 303,516 common shares. Under the terms of his
employment contract he has an option exercisable in March of 2004 to purchase
1,000,000 shares at 7 cents. He is the CFO of the Company.

DESCRIPTION OF SECURITIES
-------------------------

Our authorized capital stock consists of 300 million shares of common stock, and
10 million shares of preferred stock. The following is a summary of certain
provisions of our common stock, preferred stock, Articles of Incorporation and
bylaws.

COMMON STOCK

As of March 31, 2004, there were 151,454,698 shares of common stock outstanding.
All outstanding shares of common stock are, and the common stock to be issued in
this offering will be, fully paid and nonassessable. Each share of our common
stock has identical rights and privileges in every respect. The holders of our
common stock are entitled to vote upon all matters submitted to a vote of our
shareholders and are entitled to one vote for each share of common stock held.
There are no cumulative voting rights.

The holders of our common stock are entitled to share equally in dividends and
other distributions that our board of directors may declare from time to time
out of funds legally available for that purpose, if any, after the satisfaction
of any prior rights and preferences of any outstanding preferred stock. If we
liquidate, dissolve or wind up, the holders of shares of common stock will be
entitled to share ratably in the distribution of all of our assets remaining
available for distribution after satisfaction of all our liabilities and our
obligations to holders of our outstanding preferred stock.

The holders of our common stock have no preemptive or other subscription rights
to purchase shares of our stock, nor are they entitled to the benefits of any
redemption or sinking fund provisions.

PREFERRED STOCK

As of March 31, 2003, there were 10 shares of Series B preferred stock
outstanding. Each share is convertible into two percent of the shares of our
common stock outstanding at the date of conversion. The shares shall convert at
the earlier of the election of the holder, or December 27, 2004. The holder of
the Series B preferred stock, has the right to vote, with the holders of common
stock, on any matter to which the common stock holders are entitled to vote, the
number of shares of common stock into which the Series B preferred stock is
convertible. If we are liquidated, distribute our assets, dissolve or wind-up,
the holders of Series B preferred stock shall receive the greater of (i) $2,500
per share of Series B preferred stock they hold at the time of such Liquidation,
or (ii) their pro rata share of the total value of our assets and funds to be
distributed, assuming the Series B preferred stock is converted to common stock.

As of March 31, 2004, there were 111 shares of series C preferred stock
outstanding, each share converts into .2% of the outstanding shares at the time
of conversion. The Series C shareholders are subject to a mandatory conversion
on December 27, 2004 unless the terms are modified by mutual agreement of the
parties. In the event of a liquidation, the holders of Series C preferred stock
shall be entitled to receive one hundred and fifty percent of the amount of
consideration paid for the Series C preferred stock, after which time the
holders of Series B preferred stock and Series C preferred stock shall
participate in such liquidation, on a pro rata basis, based on the number of
shares of the common stock into which the Series B preferred stock and the
Series C preferred stock are convertible at the time of the liquidation. The
Series C preferred stock was modified to allow voting rights equal to their
underlying shares at the time of the vote.

Our board of directors has the authority to issue additional shares of preferred
stock in one or more series, and fix for each series, the designation of, and
number of shares to be included in, each such series. Our board of directors is
also authorized to set the powers, privileges, preferences, and relative
participating, optional or other rights, if any, of the shares of each such
series and the qualifications, limitations or restrictions of the shares of each
such series.

Unless our board of directors provides otherwise, the shares of all series of
preferred stock will rank on parity with respect to the payment of dividends and
to the distribution of assets upon liquidation. Any issuance by us of shares of
our preferred stock may have the effect of delaying, deferring or preventing a
change of our control or an unsolicited acquisition proposal. The issuance of
preferred stock also could decrease the amount of earnings and assets available
for distribution to the holders of common stock or could adversely affect the
rights and powers, including voting rights, of the holders of common stock.

LEGAL PROCEEDINGS
-----------------

On June 26, 2003 Albert Mardikian, a company shareholder and holder of certain
designs and components, filed a complaint against us in the Orange Country
Superior Court. The complaint alleges breach of contract of the license
agreement dated December 27, 2001 between Mr. Mardikian, Mardikian Marine
Design, and us. The complaint further alleges breach of an employment and agency
agreement between us and Mr. Mardikian, and fraud, conversion and unfair
competition. We have filed an answer denying these allegations, and on July 28,
2003 filed a cross-complaint against Mr. Mardikian and Mardikian Marine Design.
While we believe that the matter will be resolved in our favor, this case is in
the early stages of litigation and we can not accurately predict the outcome. If
we receive an unfavorable ruling, there is a possibility of a material adverse
impact of money damages on our financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

A potential liability from the discontinued boat operation exists. There is a
lawsuit pending in Texas seeking $42,495 and legal fees. The claim has arises
over charges of vessel defects, specifically the motor supports creating hull
damage.

On September 4, 2003 the Commonwealth of Pennsylvania, Pennsylvania Securities
Commission issued a summary order to Cease and Desist pertaining to the Private
Placement Memorandum. A Sonic Jet representative sent a packet of disclosure
materials to a non-accredited investor under Section 501 of Regulation D.

On March 25, 2004 the Division of Securities - Utah has asked for an Order to
Show Cause pertaining to the Private Placement Memorandum. The claim states that
a broker-dealer engaged as an unlicensed agent. We believe the matter can be
settled and is not material.

We are not aware of any other material litigation or potential litigation
affecting us or our assets or any of our subsidiaries.

LEGAL MATTERS
-------------

The legality of our shares of common stock being offered hereby is being passed
upon by Amy Trombly, Esq. Ms. Trombly will not receive a direct or indirect
interest in the small business issuer and has never been a promoter,
underwriter, voting trustee, director, officer, or employee of our company. Nor
does Ms. Trombly have any contingent based agreement with us or any other
interest in or connection to us.

EXPERTS
-------

The financial statements included in this prospectus, have been audited by
Michael Johnson & Co, LLC, independent auditors, and have been included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing. Michael Johnson & Co, LLC has no direct or indirect
interest in us, nor were they a promoter or underwriter.

ADDITIONAL INFORMATION
----------------------

We filed with the Securities and Exchange Commission a registration statement on
Form SB-2 under the Securities Act of 1933 for the shares of common stock in the
offering, of which this prospectus is a part. This prospectus does not contain
all of the information in the registration statement and the exhibits and
schedule that were filed with the registration statement. For further
information with respect to us and the Units, we refer you to the registration
statement and the exhibits and schedule that were filed with the registration
statement.

Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330.

The Securities and Exchange Commission maintains a web site that contains
reports, proxy and information statements, and other information regarding
registrants that file electronically with the SEC. The address of the site is
www.sec.gov.

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS:

Michael Johnson & Co., LLC.
9175 Kenyon Ave., #100
Denver, CO 80237
Phone: 303-796-0099
Fax: 303-796-0137

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Force Protection, Inc. and subsidiary

We have audited the accompanying consolidated balance sheets of Force
Protection, Inc., and subsidiary (formerly known as Sonic Jet Performance, Inc.)
as of December 31, 2003 and 2002, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flow for the years 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Force Protection, Inc, and
subsidiary, at December 31, 2003 and 2002, and the results of their operations
and their cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States.

The accompanying consolidated 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's recurring losses from operations and its
difficulties in generating sufficient cash flow to meet its obligation and
sustain its operations raise substantial doubt about its ability to continue as
a going concern. Management's plans concerning these matters are also described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Michael Johnson & Co., LLC
Michael Johnson & Co., LLC
Denver, Colorado
March 2, 2004

424B3 Last "Page" of 2 TOC 1st Previous Next Bottom Just 2nd

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
For the Period ending DECEMBER 31 2003, 2002 and 2001

2003 2002 2001
----------------- ----------------- -----------------

ASSETS

Current Assets:
Cash $278,777 $144,476 $42,760
Restricted cash - 201,004
Accounts receivable 144,932 166,242 9,500
Inventories 827,337 186,463 363,971
Other current assets 60,000 146,874 7,731
----------------- ----------------- -----------------
Total Current Assets 1,311,046 644,055 624,966
----------------- ----------------- -----------------

Property and equipment, net 309,068 336,523 1,221,313
----------------- ----------------- -----------------

Other Assets:
Licensing rights 200,000 267,500
Goodwill - 1,434,873
--------------- ----------------- -----------------
Total Other Assets - 1,634,873 267,500
---------------- ----------------- -----------------

TOTAL ASSETS $1,620,114 $2,615,451 $2,113,779
---------------- ================= =================

The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
For the Period ending DECEMBER 31 2003, 2002 and 2001

2003 2002 2001
------------ ---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Account payable $715,066 $873,544 $458,416
Accrued payroll taxes 13,826 38,690 70,936
Other accrued liabilities 197,469 122,867 172,329
Current portion of capitalized
lease obligations - 12,236
Loans payable 536,162 56,807 -
General reserve 424,947 224,947
Deferred Revenue 209,175
------------- ---------------- ----------------
Total Current Liabilities 1,671,698 1,516,855 938,864
------------- ---------------- ----------------

Long-term debt:
Long-term accrued liabilities 176,961 227,414 -
Note payable - long-term 32,461 67,732 -
------------- ---------------- ----------------
Total long-term 209,422 295,146 -
------------- ---------------- ----------------

TOTAL LIABILITIES 1,881,120 1,812,001 938,864
------------- ---------------- ----------------

Shareholders' equity:
Preferred stock: no par value, 10,000,000
shares authorized, issued and outstanding
Series A convertible preferred stock
no share issued and outstanding - - -
Series B convertible preferred stock,
1 share issued and outstanding 25,000 25,000 25,000
Series C convertible preferred stock,
issued and outstanding,
34 and 5 shares respectively 1,294,000 340,000 50,000
Common stock, no par value, 300,000,000
shares authorized, issued and outstanding
122,280,238 and 29,016,461 respectively 19,403,349 15,985,256 12,015,715
Warrants 689,726 692,226 -
Shares committed to be issued 30,924 143,350 93,205
Accumulated deficit (21,704,005) (16,382,382) (11,009,005)
--------------- ---------------- ----------------
Total stockholders' equity (261,006) 803,450 1,174,915
--------------- ---------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,620,114 $2,615,451 $2,113,779
================ ================ ================

The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENT
For the Period ending DECEMBER 31 2003, 2002 and 2001
(in dollars)

2003 2002 2001
-------------- ------------------ ----------------
NET SALES $6,247,285 $2,606,634 $1,199,047

COST OF SALES 4,442,418 1,877,495 896,084
-------------- ------------------ ----------------

GROSS PROFIT 1,804,867 729,139 302,963
-------------- ------------------ ----------------

OPERATING EXPENSES:
General and administrative 2,095,339 4,704,249 1,501,864
Impairment losses - goodwill 1,917,747 1,400,000 -
------------ ------------------ ----------------
Total Operating Expenses 4,013,086 6,104,249 1,501,864
------------ ------------------ ----------------

Loss from operations (2,208,219) (5,375,110) (1,198,901)
------------ ------------------ ----------------
OTHER INCOME (EXPENSE):
Interest income - 3,227 7,056
Other income 41,668 41,435 172,258
Interest expense (222,894) (42,929) (24,938)
Extraordinary loss - (393,293)
------------ ------------------ ----------------
Total Other Income (Expenses) (181,226) 1,733 (238,917)
------------ ------------------ ----------------

NET LOSS $(2,389,445) $(5,373,377) $(1,437,818)
============ ================== ================

Loss from Discontinued Operations $(2,932,179) - -

Net Loss $(5,321,623) $(5,373,377) $(1,437,818)
============= ================== =================

Basic loss per common share $(.054) $(0.13) $(0.08)
------------- ------------------ ----------------
Diluted loss per common share $(.028) $(0.09) $(0.07)
------------- ------------------ ----------------

Weighted-average shares used to compute:
Basic loss per share 98,221,830 40,697,802 15,847,263
------------- ------------------ ----------------
Diluted loss per share 186,760,559 61,421,885 23,816,716
------------- ------------------ ----------------

The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the year ended December 31,2003

Additional
Preferred Stock Common Stock Paid-In
Shares Amount Shares Amount Capital Warrants
---------- ------------- ------------- ------------- ------------- -------------
Balance, December 31, 1999 1,600 $1,500,000 12,676,000 3,618,194 $272,000 $316,026

Issuance of common stock for
cash - - 348,767 710,583 - -
Capital changes due to debt
financing - - - - 826,000 708,601
Cumulative translation adjustment - - - - - -
Net loss - - - - - -
---------- ------------- ------------- ------------- ------------- -------------
Balance, December 31, 2000 1,600 1,500,000 13,024,767 4,328,777 1,098,000 1,024,627
---------- ------------- ------------- ------------- ------------- -------------
Issuance of common stock for
services - - 4,841,969 6,186,938 (1,098,000) (1,024,627)
Conversion of preferred stock
into common stock (1,600) (1,500,000) 1,467,200 1,500,000
Issuance of preferred stock 6 75,000 - - - -
Cumulative translation adjustments - - - - - -
Net loss - - - - - -
---------- ------------- ------------- ------------- ------------- -------------
Balance, December 31, 2001 6 75,000 19,333,936 12,015,715 - -
---------- ------------- ------------- ------------- ------------- -------------
Issuance of common stock for
services - - 47,086,879 3,858,083 - -
Issuance of preferred stock 31 310,000 - - - -
Conversion of preferred stock
into common stock (2) (20,000) 564,706 20,000 - -
Beneficial conversion feature - - - - - 692,226
Stock issued in lieu of debt - - 4,572,897 91,458 - -
Net loss - - - - - -
---------- ------------- ------------- ------------- ------------- -------------
Balance, December 31, 2002 35 $365,000 71,558,418 $15,985,256 $- $692,226
========== ============= ============= ============= ============= =============
Issuance of common stock for
services - - 7,319,836 284,884 - -
Issuance of preferred stock 98 990,000 - - - -
Issuance of common stock for
cash 42,151,984 3,045,709
Conversion of preferred stock
into common stock - - - -
Beneficial conversion feature (3) (36,000) - - - (2,500)
Stock issued in lieu of debt - - 1,250,000 87,500 - -
Net loss - - - - - -
---------- ------------- ------------- ------------- ------------- -------------
Balance, December 31, 2003 130 $1,319,000 122,280,238 19,403,349 $- $689,726
========== ============= ============= ============= ============= =============

The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Continued
For the year ended December 31,2003

Accumulated
Shares Other
Committed Comprehensive Accumulated
to be issued Income Deficit Total
----------- ----------- --------------- ------------

Balance, December 31, 1999 $799,455 $(4,943) $(2,132,207) $4,368,525
-
Issuance of common stock for -
cash (655,583) - - 55,000
Capital changes due to debt
financing - - - 1,534,601
Cumulative translation adjustment - 25,273 - 25,273
Net loss - - (7,458,046) (7,458,046)
----------- ----------- --------------- ------------
Balance, December 31, 2000 143,872 20,330 (9,590,253) (1,474,647)
----------- ----------- --------------- ------------
Issuance of common stock for
services (50,667) (20,330) 20,332 4,013,646
Conversion of preferred stock
into common stock -
Issuance of preferred stock - - - 75,000
Cumulative translation adjustments - - (1,266) (1,266)
Net loss - - (1,437,818) (1,437,818)
----------- ----------- --------------- ------------
Balance, December 31, 2001 93,205 - (11,491,879) 1,174,915
----------- ----------- --------------- ------------
Issuance of common stock for
services 50,145 - - 3,908,228
Issuance of preferred stock - - - 310,000
Conversion of preferred stock
into common stock - - - -
Beneficial conversion feature - - - 692,226
Stock issued in lieu of debt - - - 91,458
Net loss - - (5,373,377) (5,373,377)
----------- ----------- --------------- ------------
Balance, December 31, 2002 $143,350 $- $ (16,382,382) $ 803,450
=========== =========== =============== ============
Issuance of common stock for
services (112,426) - - 172,458
Issuance of common stock for
cash - - - 3,045,709
Issuance of preferred stock - - - 990,000
Conversion of preferred stock
into common stock - - - -
Beneficial conversion feature - - - (38,500)
Stock issued in lieu of debt - - - 87,500
Net loss - - (5,321,623) (5,321,623)
----------- ----------- --------------- ------------
Balance, December 31, 2003 $ 30,924 $- $ (19,644,292) $ (261,006)
=========== =========== =============== ============
The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2003 AND 2002

2003 2002 2001
------------ -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $( 2,389,445) $(5,373,377) $(1,437,818)
Loss from discontinued operations (2,932,179)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization (343,511) 245,807 141,314
Royalty 60,000 -
Goodwill Impairment 1,917,747 1,400,000 -
Restructuring Expense (224,947) - -
Deferred Revenue 209,175 - -
Write off of molds and tools on discontinued product - 1,020,000 -
Write off investment in Dalian Sonic Jet Co., Ltd - 393,292
Provision for China inventory and assets 368,492 -
Common stock issued for services 284,884 528,834 96,080
Common stock committed for services - 93,205
Stock issued in lieu of debt 87,500 (74,311) (164,335)
Write down of assets 1,400,000
Bad debts (57,950) 36,500 152,970
Beneficial conversion feature - warrants (2,500) 692,226 100,000
Change in assets and liabilities:
Decrease (increase) in accounts receivable 64,528 (206,650) 36,261
Decrease (increase) in other receivable 27,714 - (4,281)
Decrease (increase) in inventories (640,874) (150,411) 205,069
Decrease (increase) in due from related parties - (32,084)
Decrease (increase) in other current assets (54,000) (139,143)
Increase (decrease) in accounts payable (173,598) 125,557 430,546
Increase (decrease) in accrued payroll taxes (24,864) (32,246) 2,450
Increase (decrease) from customers 50,000 -
Increase (decrease) in other accrued liabilities (119,160) (49,462) (138,940)
----------- ------------ ----------------
NET CASH USED IN OPERATING ACTIVITIES (4,371,480) (1,498,184) (120,408)
----------- ------------ ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Restriced cash 201,004 2,116
Purchase of property and equipment (60,713) - (2,645)
Proceeds from sale of assets 294,862 - -
Investment in Technical Solutions Group (21,546) (505,000) -
----------- ------------- ---------------
NET CASH USED IN INVESTING ACTIVITIES 212,603 (303,996) (529)
----------- ------------- ---------------

The accompanying notes are an integral part of these financial statements.

[Enlarge/Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2003 AND 2002

2003 2002 2001
----------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt - related party - 125,000
Proceeds from (payments on) capitalized lease (12,236) (1,432)
Issuance of common stock, net 3,045,709 1,425,825 -
Issuance of preferred stock, net 954,000 290,000 -
Proceeds from stock commitment (112,426) 143,500 -
Proceeds from loans 405,895 56,807 -
----------- --------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,293,178 1,903,896 123,568
----------- --------------- ---------------

NET (DECREASE) INCREASE IN CASH 134,301 101,716 2,631

CASH - beginning of period 144,476 42,760 40,129
------------ --------------- ---------------

CASH - end of period $ 278,777 $ 144,476 $ 42,760

============ =============== ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid (includes factoring) $322,992 $ 8,184 $ 24,937
============ =============== ===============
Income taxes paid $ 0 $ 800 $ 800
============ =============== ===============
<FN>

Supplemental schedule of non-cash investing and financing
activities:

During the year ended December 31, 2003, the Company issued
4,019,836 restricted shares of common stock valued at $297,134
in connection with settlement agreements and outstanding
debts owed by the Company under various loan agreements. $ 297,134

During the year ended December 31, 2002, the Company issued
9,972,020 restricted shares of common stock valued at $963,626
in connection with the settlement agreement of all outstanding
debts owed by the Company under various loan agreements. $ 963,626

During the year ended December 31, 2001, the Company issued
6,309,169 restricted shares of common stock valued at $6,044,961
in connection with the settlement agreement of all outstanding
debt owed by the Company under loan agreements, agreement
between the Company and Plaintiffs in "Wrongful death case" and
outstanding amounts owed to employee and other expenses. $ 6,044
During the year ended December 31, 2001, the Company recorded
$93,205 for settlement with employees and consultants by
committing to issue shares, which represents the Company's
committed-to-issue 1,656,695 shares of common stock. $ 93,205

During the year ended December 31, 2002, the Company issued
6,000,000 restricted shares of common stock valued at $1,200,000
in connection with the acquisition of Technical Solutions Group, Inc. $1,200,000

Cash from investing and financing activities exclude the effect of
the acquisition of real property through the assumption of debt.

The accompanying notes are an integral part of these financial statements.

[Download Table]

FORCE PROTECTION INC. AND SUBSIDIARY
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the period ending December 31, 2003
(in dollars)

Net Income $(5,321,623)
Other Comprehensive Income,
Net of tax -
---------------
Comprehensive Income $(5,321,623)

The accompanying notes are an integral part of these financial statements.

FORCE PROTECTION, INC.
(FORMERLY SONIC JET PERFORMANCE, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF THE BUSINESS:

Force Protection, Inc. (the "Company) designs, manufactures and markets mine and
blast protected vehicles.

GENERAL STATEMENT

The Securities and Exchange Commission has issued Financial Reporting release
No. 60, "Cautionary Advice Regarding Disclosure About Critical Accounting
Policies," or FRR 60, suggesting companies provide additional disclosure and
commentary on their most critical accounting policies. In FRR 60, the SEC
defined the most critical accounting policies as the ones that are most
important to the portrayal of a company's financial condition and operating
results, and require management to make its most difficult and subjective
judgments, often as a result of the need to make estimates of matters that are
inherently uncertain. The methods, estimates and judgments we use in applying
these most critical accounting policies have a significant impact on the results
we report in our financial statements.

As a general rule, financial information is accounted for and based on cost, not
current market value. Revenues and gains should be matched using the accrual
method with the expenses giving rise to the revenues and gains to determine
earnings for the period. Expenses are necessarily incurred to produce revenue.
Expenses are then "matched" in the same accounting period against the revenue
generated. Revenues are recognized when they are earned and expenses are
recognized in the same period as the related revenue (matching or using a
systematic and rational allocation or expensing in the period in which they
expire), not necessarily in the period in which the cash is received or expended
by the company. Other areas include:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Force Protection,
Inc., and Technical Solution Group, Inc. for the year ended December 31, 2003.
All inter-company balances and transactions are eliminated in consolidation.

GOING CONCERN

The accompanying consolidated financial statements have been prepare on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the financial
statements, during the year ended December 31, 2003 the Company incurred losses
of $5,321,623 and its current liabilities exceed its current assets by $360,652.

Realization of a major portion of the assets in the accompanying balance sheet
is dependent upon continued operations of the Company, obtaining additional
financing, and the success of its future operations.

Due to the nature of the business it is uncertain whether we will receive orders
impeding our cash situation and our ability to pay creditors.

COMPREHENSIVE INCOME (LOSS)

Comprehensive loss is equal to net loss for the years ended December 31, 2000,
2001, 2002 and 2003.

CASH EQUIVALENTS

For purposes of reporting cash flows, the Company considers all highly liquid
debt instruments purchased with maturity of three months or less to be cash
equivalents. Cash equivalents consist primarily of United States government
securities.

INVENTORIES

Inventories are stated at the lower of cost or market. The cost is determined
under the first-in-first-out method base (FIFO) valuation method.

PROPERTY, PLANT AND EQUIPMENT

Property and equipment are stated at cost or at the value of the operating
agreement. Additions and improvements are capitalized; these include all
material, labor and engineering cost to design, install or improve the asset.
Routine repairs and maintenance are expensed as incurred. Depreciation and
amortization are computed using the straight-line method over the following
estimated useful lives:

Building and improvements 20 years
Furniture and fixtures 7 years
Machinery and equipment 7 years
Tooling and molds 7 years
Vehicles 7 years

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets to be held and used for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, the Company would recognize an impairment loss based on the estimated
fair value of the asset.

GOODWILL

Under SFAS No. 142. Goodwill and other Intangible Assets, all goodwill
amortization ceased effective Jan.1, 2002. Rather, goodwill is now subject to
only impairment reviews. A fair-value based test is applied at the reporting
level. This test requires various judgments and estimates. A goodwill
impairment loss will be recorded for any goodwill that is determined to be
impaired. Goodwill is tested for impairment at least annually.

Goodwill, which represents the excess of purchase price over fair value of net
assets, acquired in the acquisition of Technical Solutions Group, Inc. in June
2002. The Company follows SFAS 142, Goodwill and Intangible Assets, which
requires the Company to test goodwill for potential impairment annually. When
the carrying value exceeds fair value, the impairment is the difference between
the carrying value of goodwill and the implied value. The implied value of
goodwill is the difference between the fair value for the unit as a whole and
the value of individual assets and liabilities using as "as-if" purchase price.

FOREIGN CURRENCY TRANSACTION

Assets and liabilities in foreign currencies are translated at the exchange rate
prevailing at the balance sheet date. Revenues and expenses are translated at
the exchange rate prevailing at the transaction date, and the resulting gains
and losses are reflected in the statements of operations. Gains and losses
arising from translation of a subsidiary's foreign currency financial statements
are shown as a component of stockholders' equity (deficit) as accumulated
comprehensive income (loss).

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes.
The asset and liability method accounts for deferred income taxes by applying
enacted statutory rates in effect for periods in which the difference between
the book value and the tax bases of assets and liabilities are scheduled to
reverse. The resulting deferred tax asset or liability is adjusted to reflect
changes in tax laws or rates. Because the Company has incurred losses from
operations, no benefit is realized for the tax effect of the net operating loss
carry-forward due to the uncertainty of its realization.

LOSS PER SHARE

The Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per share is
computed by dividing loss available to common stockholders by the
weighted-average number of common shares outstanding. Diluted loss per share is
computed similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the additional
common shares were dilutive.

ESTIMATES

The preparation of financial statements in conformity with 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, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The Company's revenues are derived principally from the sale of blast and
mine-protected vehicles. Revenue from products and services are recognized at
the time goods are shipped or services are provided to the customer, with an
appropriate provision for returns and allowances. The estimated sales value of
performance under fixed-price and fixed-price incentive contracts in process is
recognized under the percentage-of-completion method of accounting in which the
estimated sales value is determined on the basis of physical completion
to date (the total contract amount multiplied by percent of performance to date
less sales value recognized in previous periods) and cost (including general and
administrative) are expensed as incurred. It is our policy to not recognize
revenue until customer acceptance and shipment to the customer. All advance
payments are treated as "deferred revenue".

RESEARCH AND DEVELOPMENT

We expense research and development cost as incurred.

INTERNAL CONTROLS

TSG is a relatively new company with limited staff resources. Internal controls
have been put in place and are evolving as the company grows.

NOTE 2 - FINANCIAL STATEMENTS

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. All significant inter-company balances,
transactions, and stockholdings have been eliminated.

NOTE 3 - INVENTORIES

Inventories at December 31, 2003 consisted of the following:

[Download Table]

Raw materials and supplies $100,217
Work in process. . . . . . 674,419
Finished goods - Demo. . . 52,701
Finished Goods . . . . . . 0
Less: Provision. . . . . . 0

Total Inventories. . . . . $827,337

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2003 consisted of the following:

[Download Table]

Furniture and fixtures $125,074
=============================
Machinery and equipment 307,490
Tooling - new products -
Design rights -
Vehicles 500
Demo vehicles 192,530
Less depreciation and amortization (316,526)
Total property and equipment $309,068
-----------------------------

Depreciation expense for the year ended December 31, 2003 was $ 104,334.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

LEASES

On October 10, 2003, TSG entered into a lease agreement with Intertech Group,
Inc. to lease 86,000 square feet of manufacturing and administrative space and
transfer the Company's executive offices at the end of October, 2003 to new
facilities at 9801 Highway 78, Building No. 3, Ladson, South Carolina. The term
of the lease is five years starting October 15, 2003, with an option to renew
for another five years. The space substantially increases the Company's ability
to qualify for and fulfill larger contracts for its mine-protected vehicles.
Annual rent is $215,000 for the first year plus utilities, taxes and
maintenance, and $258,000 base rental for the next four years. The prior
landlord has agreed to terminate its lease at the Company's prior headquarters
located at 2031 Avenue B, Building 44, North Charleston, South Carolina, in
exchange for payment of rent at this prior facility through November 30, 2003.

The Company has terminated its month-to-month lease in Stanton, California and
transferred its headquarters to Ladson, South Carolina. Additionally, the
month-to-month warehouse lease in Riverside, California was terminated with no
penalty to the Company. The Company has no remaining obligations under the
terminations. The Company's wholly owned subsidiary in China has been
dissolved. The Company has no ongoing obligations in Nanning, China.

ROYALTY/LICENSING AGREEMENTS

On December 27, 2001, the Company entered into a new license agreement covering
the design and other rights, with Mardikian Marine Design, an entity that
includes two of the Company's larger shareholders, and a principal of the holder
of the Company's Series B preferred stock. The Company paid all outstanding
obligations under the agreement for 2002 in the first quarter of 2003; in
addition the Company paid all outstanding obligations under the agreement
through June 2003. The remaining obligation under the agreement remain in
dispute and is the subject of a claim by a member of Mardikian Marine Design and
a counter suit against a member of Mardikian Marine Design. One of the
principals of Mardikian Marine Design has informed the Company of his intention
to revoke the licensing agreement to the Company and has filed a lawsuit against
the Company (discussed in Part 1, Item 3 of this Form 10-KSB).

NOTE 6 - STOCK COMPENSATION PLAN

On September 30, 2003, the Company adopted a Directors and Consultants Retainer
Stock Plan. A total of 5,000,000 shares can be issued under this plan and were
registered under a Form S-8 registration statement filed with the Securities and
Exchange Commission on November 7, 2003, and declared effective on that date.
The purposes of the plan are to enable the Company to promote the interests of
the Company and its shareholders by attracting and retaining both employee and
non-employee directors and consultants by paying their retainer or fees in the
form of free trading shares of the Company's common stock. No shares have yet
been issued under this plan.

The Company's July 2000 Employee Stock Compensation Plan provides for the
granting of stock options to employees and certain consultants of the Company.
A total of 2,000,000 shares of common stock have been reserved for issuance upon
exercise of options granted under the plan. Securities authorized for issuance
under equity compensation plans:

[Download Table]

Number of Number of
securities to Securities
be issued upon Weighted remaining
exercise of average available
outstanding exercise price outstanding
Plan Category options of for future options
------------------------- -------------- -------------- -----------
Equity compensation plans
approved by security
holders . . . . . . . . . (a) 1,987,829 (b) $0.11 (c) 12,171
------------------------- -------------- -------------- -----------
Equity compensation plans
not approved by security
holders . . . . . . . . . --- --- ---
------------------------- -------------- -------------- -----------
Total:. . . . . . . . . . (a) 1,987,829 (b) $0.11 (c) 12,171
------------------------- ============== ============== ===========

NOTE 7 - SALE OF ASSETS

Effective July 1, 2003 and modified on September 15, 2003, the Company
transferred the sales activity and right to use the Stanton, California
facility, and transferred certain boat assets of the fire and rescue operations
to its subsidiary, Rockwell Power Systems Inc. ("RPSI"). The Company then
agreed to accept shares from Xtreme Companies, a public traded company trading
under the symbol XTRI.OB on the Bulletin Board. Under the agreement, Force
Protection agreed to distribute the shares it received to its shareholders of
record on December 5, 2003. In addition Force Protection is to receive $500,000
in preferred Series A stock of Xtreme for a list of tangible and intangible
assets included as part of the original asset sale agreement.

NOTE 8 - OTHER TRANSACTIONS

RIGHTS OF SERIES B AND SERIES C PREFERRED SHAREHOLDERS.

Under the original agreements for Series B and Series C preferred shares, the
conversion rights were extended to December 27, 2004 from the previous mandatory
conversion of December 27, 2003. The extension was agreed to in exchange for
waiving the time provisions for the filing of the registration statement by the
registrant.

CAPITAL STOCK TRANSACTIONS

During the nine months ended September 30, 2003, two restricted shares of Series
C preferred stock were redeemed, ten shares were issued to Garth Barrett, an
employee, two shares to Russell Miller, a consultant advising on strategic
issues, and one share was committed to Scott Ervin, a director of the company,
in exchange for a loan of $50,000 to the Company, leaving a balance of 45 shares
of Series C preferred stock outstanding and committed at September 30, 2003.

The Company issued to Scott Ervin, a director, as compensation in such capacity,
restricted shares of common totaling 250,000 in the third quarter 2003.

During the three months and nine months ended September 30, 2003, the Company
issued or committed to be issued 195,085 and 3,300,000 restricted shares of
common stock, respectively, to five companies and individuals (Regent Capital
West, Albert Mardikian, Ashford Capital LLC., R. James Consulting, and Harrison
Douglas, Inc.) in connection with compensation under the private placement being
conducted by the Company.

During the three months and nine months ended September 30, 2003, the Company
sold a total of 2,245,000 and 25,924,000 restricted shares of common stock and
warrants, respectively, to investors pursuant to its private placement
memorandum, generating net proceeds of $88,981 and $1,299,900 respectively,
pursuant to the sale of common stock units. Each common stock unit consists of
(a) 50 restricted shares of common stock of the Company, (b) one warrant to
purchase 25 restricted shares of common stock of the Company at an exercise
price of $0.20 per share, and (c) one warrant to purchase 25 restricted shares
of common stock, at an exercise price of $0.30 per share (which was subsequently
reduced to $0.01 per share, of which all warrants were exercised).

EMPLOYMENT AGREEMENTS.

During the second quarter of 2003, the Company negotiated certain changes in
employment agreements with certain of its officers.

Under a previous agreement, the Company was to issue Mr. Watts a warrant for
2,000,000 restricted shares of common stock at $0.07 a share with full vesting
rights as of July 1, 2002, plus a warrant for 1,000,000 restricted shares of
common stock at $0.07 a share vesting on the June 30, 2003, plus a warrant for
1,000,000 restricted shares of common stock at $0.07 a share vesting on June 30,
2004, plus 10 shares of Series "C" preferred or the equivalent in common shares.
These issuances were modified to be grants, effective July 1, 2002, of 2,000,000
shares of S8 common stock, plus a warrant for 1,000,000 S8 shares of common
stock at $0.07 exercisable on June 20, 2003, plus a warrant for 1,000,000 S8
shares of common stock exercisable on June 20, 2004.

Garth Barrett is to receive a salary plus a grant of 10 shares of series "C"
preferred stock.

On April 1, 2003, the Company entered into an agreement with Frank Kavanaugh,
the Company's director of business development, for a salary, and a grant of
500,000 restricted shares of the Company's common stock. Also, during June
2003, Mr. Kavanaugh was granted 750,000 restricted shares of common stock that
were committed in June of 2002, for consulting services as interim general
manager during the second and third quarters of 2002.

In connection with the restructuring of the Company, it entered into a verbal
termination agreement with Madhava Rao Mankal. The agreement stipulates that he
will assist the Company as a consultant for 90 days beginning October 1, 2003 at
the same salary, without benefits, and receive a grant of 600,000 restricted
shares of stock in September, 2003. On December 31, 2003 Mr. Mankal will be
paid 90 days termination based on his annual rate of salary of $64,800. In June
2003, Mr. Mankal received 200,000 restricted shares of common stock for the
first and second quarters of 2003 in connection with his employment contract
dated March 17, 2003, and in September 2003 he received 600,000 restricted
shares of common stock in connection with his termination agreement.

During the third quarter of 2003, the Company also negotiated a termination
agreement with Hratch Khedesian, the Company's former production manager. Mr.
Khedesian received 660,000 restricted shares of common stock in 2003 in
connection with his employment contract dated January 2, 2002 and termination
agreement. In addition Mr. Khedesian will receive future payments totaling
$58,000 over the next two years. Executive officer compensation is subject to
review on a periodic basis by the board of directors.

ACQUISITION OF TSG INTERNATIONAL, INC.

As part of the purchase of TSG International, Inc. (which owns 100% of Technical
Solutions Group, Inc.,) in July 2002 (see 2002 Form 10-KSB), Ashford Capital,
LLC, an advisor to the transaction and a shareholder of the Company, received
shares equal to 10% of TSG International, Inc. in the form of a Series A
preferred stock. An agreement was reached in April of 2003 under which Ashford
Capital, LLC could exchange each shares of TSG International, Inc. Series A
preferred stock for 50 shares of the Company's Series C preferred shares, by
**notifying the Company by October 15, 2003.

In September 2003, Ashford Capital, LLC and the Company's CEO, Michael Watts,
reached an agreement under which the TSG Series A preferred shares and the
rights associated with the Series A preferred shares were purchased by Mr. Watts
in a private sale between the parties. On October 12, 2003, the Company was
notified of Ashford Capital, LLC's intention to exercise its option to exchange
its TSG International, Inc. preferred stock for the Company's Series C preferred
stock. Under the terms of the agreement, Mr. Watts will exchange each share of
his TSG International, Inc. stock for 50 shares of Company Series C preferred
stock effective October 15, 2003. As a result, the Company will hold 100% of
TSG International, Inc.

REDEMPTION OF SERIES C PREFERRED STOCK

Under the terms of the Series C preferred stock, as reflected in an amended
Certificate of Designation, shareholders could redeem each preferred share for
$12,000 after a certain date. Under these terms, Noriaki Sasaki notified the
Company of his request to redeem 10 shares of the Series C preferred stock at a
schedule to be provided by the Company. The Company has agreed to a redemption
schedule and has redeemed 2 of the 10 shares. The remaining 8 shares should be
redeemed by January 2004. Subsequently, the remaining Series C shareholders
have waived the redemption rights in return for an extension of the mandatory
conversion dates (see 2002 Form 10-KSB).

NOTE 9 - INCOME TAXES

There has been no provision for U.S. federal, state, or foreign income taxes for
any period because the Company has incurred losses in all periods and for all
jurisdictions.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
deferred tax assets are as follows as of December 31, 2002:

[Download Table]

Deferred tax assets:
Net operating loss carry forwards $11,954,500
Future deduction for intangible assets 1,612,013
Future deduction for reserves & others 1,880,682
Less valuation allowance (15,447,195)
------------

Net deferred tax assets $ -
============

Realization of deferred tax assets is dependent upon future earnings, if any,
the timing and amount of which are uncertain. Accordingly, the net deferred tax
assets have been fully offset by a valuation allowance. As of December 31, 2002,
the Company had net operating loss carry forwards of approximately $11,954,500
for federal and state income tax purposes. These carry forwards, if not utilized
to offset taxable income begin to expire in 2007. Utilization of the net
operating loss may be subject to substantial annual limitation due to the
ownership change limitations provided by the Internal Revenue Code and similar
stat provisions. The annual limitation could result in the expiration of the net
loss before utilization.

NOTE 10 DISCONTINUED OPERATIONS

Discontinued operations follows SFAS no. 144. The loss from discontinued
operations consist of impairment loss, the loss or gain from actual operations,
and the gain/loss on the disposal of assets. All these accounts are included in
discontinued operations in the period in which they occur.

On October 1, 2003, Force Protection discontinued operations of its boat
division from its ongoing operations as the result of the asset disposal. Force
Protection does not have any continuing involvement in the operations after the
disposal.

We anticipate "subsequent adjustments" in 2004 for settlement of employee
severance and any potential warranty claims.

[Download Table]

Discontinued operations:
Loss from operations including
Impairment loss $2,932,179

Income tax benefit -
-----------
Loss from Discontinued Operations $2,932,179

NOTE 11 CONTINGENCY LOSSES

A potential liability from the discontinued boat operation exists. During the
2001-2002 time frame, the company experienced a hull quality problem with a
foreign distributor. The issue has been satisfied however a $29,000 potential
exposure remains. The company believes the probability of this exposure is very
low.

A potential liability from the discontinued boat operation exists. There is a
lawsuit pending in Texas seeking $42,495 and legal fee. The claim has arises
over charges of vessel defects, specifically the motor supports creating hull
damage.

There has been no adjustment to the financial statements reflecting these
potential liabilities.

NOTE 12 RECEIVABLES

During 2003 we factored our receivables at 3%.

NOTE 13 GOODWILL

The impairment expense for 2002 was $1,400,000. $482,874 was reclassified from
"Investment in TSG" to Goodwill during the 4th quarter. The goodwill impairment
expense for 2003 was $1,917,747. There is no goodwill remaining on the balance
sheet as of December 31, 2003.

NOTE 14 RESTRUCTURING EXPENSES - NET

The Company implemented restructuring actions to streamline operations and exit
the boat business. These actions include workforce reductions, rationalization
and the exit of the boat business. Charges and credits related to discontinued
operations are included in income (loss) from operations of discontinued
operations. As of December 31, 2003, t here is no longer a restructuring reserve
on the balance sheet. Restructuring expense for 2003 was $224,947.

SFAS 146 requires that a liability for a cost associated with an exit or
disposal activity be recognized and measured initially at fair value only when
the liability is incurred. The adoption of SFAS 146 did not have a material
impact on the Company's financial condition.

NOTE 15 DEBTS

FORCE PROTECTION, INC.

65,000,000 Shares of
Common Stock

No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied on as having been authorized by Force Protection, Inc. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy, by
any person in any jurisdiction in which it is unlawful for such person to make
such offer or solicitation. Neither the delivery of this Prospectus nor any
offer, solicitation or sale made hereunder, shall under any circumstances create
an implication that the information herein is correct as of any time subsequent
to the date of the Prospectus.

PROSPECTUS
----------

Until [90 days from the date of effectiveness], all dealers effecting
transactions in the registered securities, whether or not participating in the
distribution thereof, may be required to deliver a Prospectus. This is in
addition to the obligation of dealers to deliver a Prospectus when acting as
Underwriters and with respect to their unsold allotment or subscriptions.

April 16, 2004
-----------------

424B3	1st "Page" of 2	TOC	Top	Previous	Next	Bottom	Just 1st

424B3	Last "Page" of 2	TOC	1st	Previous	Next	Bottom	Just 2nd

Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 424B3 Filing	Date	First	Last	Other Filings

	6/30/98	1		10QSB
	11/4/98	1
	12/29/98	1
	12/31/99	2		10KSB, 10KSB/A, NT 10-K
	12/31/00	2		10KSB, NT 10-K
	12/27/01	1	2	3
	12/31/01	2		10KSB, 10KSB/A
	1/2/02	2
	6/20/02	1
	7/1/02	1	2
	9/30/02	1		10QSB, NT 10-Q
	12/31/02	1	2	10KSB, 10KSB/A, NT 10-K
	3/17/03	1	2
	3/31/03	1		10QSB, NT 10-Q
	4/1/03	1	2
	5/29/03	1
	6/20/03	1	2
	6/26/03	1
	6/30/03	1	2	10QSB, NT 10-Q
	7/1/03	1	2
	7/28/03	1		DEF 14A
	9/4/03	1
	9/15/03	2
	9/20/03	1
	9/30/03	1	2	10QSB, NT 10-Q
	10/1/03	1	2
	10/10/03	1	2
	10/12/03	1	2
	10/15/03	1	2
	11/7/03	1	2	S-8
	11/30/03	1	2
	12/5/03	1	2
	12/27/03	2
	12/31/03	1	2	10KSB, 10KSB/A, 5
	3/2/04	1
	3/23/04	1		8-K
	3/25/04	1		3
	3/31/04	1		10QSB
Filed On / Filed As Of	4/16/04	1	2	4
	6/20/04	1	2
	6/30/04	2		10QSB
	11/1/04	1	2
	12/27/04	1	2
	3/23/06	1

Top				List All Filings

Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

			in		Show		and
Help...		Wildcards: ? (any letter), * (many). *Logic:* for Docs: & (and), \| (or); for Text: \| (anywhere), "(&)" (near).

Force Protection Inc · 424B3 · On 4/16/04

Filed On 4/16/04 11:12am ET · SEC File 333-114263 · Accession Number 1231742-4-285

﻿Prospectus · Rule 424(b)(3)Filing Table of Contents

﻿Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Prospectus · Rule 424(b)(3)
Filing Table of Contents

Document Table of Contents