Solar power has emerged as one of the most rapidly growing renewable energy sources. To date, a number of different technologies have been developed to harness solar energy. The most significant technology is the use of inter-connected photovoltaic cells to generate electricity directly from sunlight. Most PV cells are constructed using specially processed silicon, which, when exposed to sunlight, generates direct current electricity.

According to Solarbuzz, the global solar power market, as measured by total PV installations at end-customers in that year, increased from 927 MW in 2004 to 1,744 MW in 2006, which represents a CAGR of approximately 37.2%. During the same period, solar power industry revenues grew from approximately $6.5 billion in 2004 to approximately $10.6 billion in 2006. Under one of three forecast scenarios, Solarbuzz projects that solar power industry revenues and annual installations will reach $26 billion and 5,521 MW, respectively, by 2011.

In 2006, approximately 92% of PV modules were manufactured using crystalline silicon technologies, while thin-film technologies accounted for approximately 8%. Crystalline silicon PV systems are manufactured using either multicrystalline, monocrystalline or string ribbon technologies. Multicrystalline is currently the most widely used silicon technology.

The PV industry has grown significantly in the past several years. According to Solarbuzz, the global PV market, as measured by total PV installations at end-customers in that year, increased from 927 MW in 2004 to 1,744 MW in 2006, which represents a CAGR of approximately 37.2%. During the same period, PV industry revenues grew from approximately $6.5 billion in 2004 to approximately $10.6 billion in 2006. Under one of three forecast scenarios, Solarbuzz projects that PV revenues and annual installations will reach $26 billion and 5,521 MW, respectively, by 2011. Despite the rapid growth, solar energy constitutes only a small fraction of the world\\\'s energy output.

The Company sells products both on a stand-alone basis and as part of turnkey manufacturing solutions.

Polysilicon is a highly purified form of silicon that is used to make both semiconductors for microelectronics applications and solar wafers. The chemical vapor deposition process involved in the production of polysilicon takes place in a specialized CVD reactor using a variety of complex chemical processes, the most widely used being the Siemens process, which has been in existence for nearly fifty years.

The Company began offering a polysilicon CVD reactor commercially in April 2006 and also offers an STC converter. STC converters recycle silicon tetrachloride gas to be reused in the CVD reactor process.

The Company’s DSS unit is a specialized furnace used to melt polysilicon and grow multicrystalline ingots and is the most widely used furnace for growing multicrystalline ingots in the solar industry. Multicrystalline ingots are used to produce solar wafers and, ultimately, solar cells. The Company recently introduced a next generation DSS unit that is capable of producing larger ingots to generate more usable polysilicon for solar wafers and thereby reduce unit manufacturing costs.

During the PV manufacturing value chain, solar cells are made from polysilicon wafers and multiple solar cells are strung together, laminated for weatherproofing, and framed between a glass front panel and a polymer back sheet to create a solar module. The Company provides a portfolio of products that are used throughout this manufacturing process.

Turnkey manufacturing solutions are complete production lines designed to produce a specified level of output. Turnkey solutions are typically sold to new market entrants in connection with the construction of new facilities. The Company currently offers three turnkey solutions: a wafer fabrication line, a cell fabrication line and a module fabrication line.

Cost of revenue increased 55% from $22.1 million for the nine months ended December 31, 2005 to $34.3 million for the nine months ended December 31, 2006.

Research and development expenses were $2.9 million for the nine months ended December 31, 2006, compared to $1.0 million for the nine months ended December 31, 2005, an increase of 180%.

Selling and marketing expenses were $5.3 million for the nine months ended December 31, 2006, compared to $3.0 million for the nine months ended December 31, 2005, representing an increase of 75%.

For the nine months ended December 31, 2006, net loss was $3.2 million compared to a net loss of $12.0 million for the nine months ended December 31, 2005.