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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                (AMENDMENT NO. 1)

      |X|   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934
            For the quarterly period ended June 30, 2008; or

      |_|   Transition Report Pursuant to Section 13 or 15(d) of the
            Securities Exchange Act of 1934
            For the transition period from ____________ to ____________

                         Commission file number: 0-12742


                                SPIRE CORPORATION
                                -----------------
             (Exact name of registrant as specified in its charter)



          MASSACHUSETTS                                        04-2457335
          -------------                                        ----------
 (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                         Identification Number)


ONE PATRIOTS PARK, BEDFORD, MASSACHUSETTS                      01730-2396
------------------------------------------                     ----------
(Address of principal executive offices)                       (Zip Code)


                                  781-275-6000
                                  ------------
               (Registrant's telephone number including area code)


     Indicate by "X" whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.                                Yes |X| No |_|

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

     Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer (Do
not check if a smaller reporting company) |_| Smaller reporting company |X|

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).                       Yes |_| No |X|

     The number of shares of the registrant's common stock outstanding as of
August 6, 2008 was 8,330,688.

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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Explanatory Note  ...........................................................  1

PART I. FINANCIAL INFORMATION

Item 1.  Unaudited Condensed Consolidated Financial Statements:

         Unaudited Condensed Consolidated Balance Sheets as of June 30,
         2008 (as restated) and December 31, 2007 (as restated)  ............  3

         Unaudited Condensed Consolidated Statements of Operations for
         the Three Months Ended June 30, 2008 and 2007 and the Six
         Months Ended June 30, 2008 (as restated) and 2007  .................  4

         Unaudited Condensed Consolidated Statements of Cash Flows
         for the Six Months Ended June 30, 2008 (as restated) and 2007  .....  5

         Notes to Unaudited Condensed Consolidated Financial Statements
         (as restated)  .....................................................  6

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations  ......................................... 20

Item 3.  Quantitative and Qualitative Disclosures About Market Risk  ........ 30

Item 4T. Controls and Procedures  ........................................... 30


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings  ................................................. 33

Item 1A. Risk Factors  ...................................................... 33

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  ....... 33

Item 3.  Defaults Upon Senior Securities  ................................... 33

Item 4.  Submission of Matters to a Vote of Security Holders  ............... 33

Item 5.  Other Information  ................................................. 33

Item 6.  Exhibits  .......................................................... 33

         Signatures  ........................................................ 35
<PAGE>

                                EXPLANATORY NOTE

     In November 2008, our management  notified the Audit Committee of the Board
of Directors over a concern  relating to the timing of revenue  recognition with
respect to a single  contract  with one  customer  that we  recognized  in prior
periods.  Management  determined  that this  customer was provided a concession,
which was  previously  undisclosed  and  undocumented,  with  respect to upgrade
rights to a specific tool sold in  conjunction  with a module line  delivered to
this  customer.  As the  upgrade  was not  available  for sale at the time  when
certain  elements of the contract were  recognized,  management  determined that
revenue for the entire  contract should have been deferred until the upgrade was
provided to the customer.  Management  informed both the Audit Committee and our
independent   registered   public   accounting  firm  when  the  concession  was
discovered. Management in concert with the Audit Committee initiated an internal
review of other solar equipment  contracts to determine if other  concessions or
side  arrangements  were timely  conveyed,  such that revenue was  appropriately
recognized.  The review revealed that,  except for the one contract in question,
all customer  concessions and modifications  were conveyed on a timely basis and
revenue was  appropriately  recorded in all other cases  during the period under
review.

     On  November  18,  2008,  as a result  of these  investigations,  the Audit
Committee  concluded,  in  consultation  with  and upon  the  recommendation  of
management,  that the  previously  issued  financial  statements  for the fourth
quarter  and fiscal  2007  included  in our  Annual  Report on Form 10-K for the
fiscal  year  ended  December  31,  2007  and the  previously  issued  financial
statements  included  in our  Quarterly  Reports  on Form  10-Q  for the  fiscal
quarters ended March 31, 2008 and June 30, 2008 (the "Original  Report") and the
related earnings releases and similar communications relating to all such fiscal
periods, should no longer be relied upon. Specifically, adjustments needed to be
made in the fourth quarter of 2007 and the first quarter of 2008.

     In this  Quarterly  Report on Form  10-Q/A  (the  "Amended  Report") we are
restating our condensed  consolidated  balance sheet as of December 31, 2007 and
June 30, 2008 and our  condensed  consolidated  statements of  operations,  cash
flows and  related  disclosures  for the  six-month  period  ended June 30, 2008
included in the Original Report to correct this error. We are also restating the
consolidated  financial  statements  for fiscal 2007 and condensed  consolidated
financial  statements  for first  quarter  of 2008 to  correct  this  error.  We
anticipate  filing on the same date as this Amended Report,  an Annual Report on
Form 10-K/A for fiscal 2007 and a Quarterly  Report on Form 10-Q/A for the first
quarter of 2008. We also anticipate filing our Quarterly Report on Form 10-Q for
the three and nine months ended September 30, 2008,  which will also include the
effects  of the  restatements.  We do not  anticipate  filing  amended  periodic
reports  for any  periods  prior to the fourth  quarter of 2007.  For a detailed
discussion  of the  effect  of the  restatements,  see Part I,  Item 1,  Note 2,
"Restatement  of  Previously  Issued  Financial  Statements"  to  the  unaudited
condensed consolidated financial statements.

     We  have  identified  and  reported  "material  weaknesses"  to  the  Audit
Committee of our Board of Directors and Vitale,  Caturano & Company,  Ltd.,  our
independent registered public accounting firm. Please see "Item 4T. Controls and
Procedures" in Part I for a description  of these  matters,  and of the measures
that we have implemented to date, as well as additional steps we plan to take to
strengthen our controls.

     We are recording  adjustments affecting our  previously-reported  financial
statements for the fourth quarter of 2007 and for the first quarter of 2008, the
cumulative effects of which are summarized in the table below.

CUMULATIVE EFFECT OF ADJUSTMENTS ON ACCUMULATED DEFICIT

     The following table presents the cumulative effect of adjustments resulting
from the reviews described above for the periods shown.

                                               Year Ended      Quarter Ended
                                              December 31,        March 31,
                                                  2007              2008
                                              ------------      ------------
                                                       As Restated (1)
                                              ------------------------------

Net loss as originally reported               $ (1,686,000)     $   (508,000)
Adjustments related to:
    Revenue recognition                         (1,355,000)         (380,000)
    Cost of goods sold                           1,108,000           365,000
                                              ------------      ------------
Net adjustments                                   (247,000)          (15,000)
                                              ------------      ------------
Net loss as restated                          $ (1,933,000)     $   (523,000)
                                              ------------      ------------
Cumulative effect to accumulated deficit      $    247,000      $    262,000
                                              ============      ============

                                        1
<PAGE>

(1) See Note 2, to the Unaudited Condensed Consolidated Financial Statements
included in Part I, Item 1

        For the reasons  discussed  above,  we are filing this Amended Report in
order  to amend  Part I,  Item 1  "Unaudited  Condensed  Consolidated  Financial
Statements,"  Part I, Item 2 "Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations"  and  Part  I,  Item 4T  "Controls  and
Procedures"  of the  Original  Report to the extent  necessary  to  reflect  the
adjustments  discussed  above and to reflect the results of our  evaluations  of
disclosure   controls  and  procedures  and  internal   control  over  financial
reporting, taking into consideration these restatements.  The remaining Items of
our Original  Report are not amended hereby and are repeated herein only for the
reader's convenience.

        In order to preserve  the nature and  character of the  disclosures  set
forth in the  Original  Report,  except as expressly  noted  above,  this report
speaks as of the date of the filing of the Original Report, August 13, 2008, and
we have not updated the  disclosures in this report to speak as of a later date.
All  information  contained  in this  Amended  Report is subject to updating and
supplementing  as provided in our reports  filed with the SEC  subsequent to the
date of the Original Report.


















                                       2
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SPIRE CORPORATION AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE><CAPTION>
                                                                                       JUNE 30,        DECEMBER 31,
                                                                                         2008              2007
                                                                                     ------------      ------------
                                                                                             AS RESTATED (1)
                                                                                     ------------------------------
<S>                                                                                  <C>               <C>
                                                 ASSETS
Current assets
--------------
   Cash and cash equivalents                                                         $  4,462,000      $  2,372,000
   Restricted cash - current portion                                                      250,000           391,000
                                                                                     ------------      ------------
                                                                                        4,712,000         2,763,000

    Accounts receivable - trade, net                                                    7,450,000        11,865,000
    Inventories, net                                                                   16,239,000        11,570,000
    Deferred cost of goods sold                                                         8,445,000         8,044,000
    Deposits on equipment for inventory                                                 2,682,000         2,475,000
    Prepaid expenses and other current assets                                             391,000           542,000
                                                                                     ------------      ------------
           Total current assets                                                        39,919,000        37,259,000

Property and equipment, net                                                             6,108,000         6,209,000

Intangible and other assets, net                                                          849,000           851,000
Available-for-sale investments, at quoted market value (cost of $1,696,000 and
    $1,696,000 at 6/30/08 and 12/31/07, respectively)                                   1,637,000         1,800,000
Equity investment in joint venture                                                      1,911,000         2,264,000
Deposit - related party                                                                   304,000           304,000
                                                                                     ------------      ------------
        Total other assets                                                              4,701,000         5,219,000
                                                                                     ------------      ------------
        Total assets                                                                 $ 50,728,000      $ 48,687,000
                                                                                     ============      ============

                                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
-------------------
   Current portion of capital lease obligation - related party                       $       --        $    486,000
   Current portion of equipment line of credit                                          1,167,000         1,167,000
   Accounts payable                                                                     5,017,000         2,909,000
   Accrued liabilities                                                                  5,889,000         6,057,000
   Current portion of advances on contracts in progress                                26,130,000        24,053,000
                                                                                     ------------      ------------
      Total current liabilities                                                        38,203,000        34,672,000

Long-term portion of equipment line of credit                                           1,166,000         1,750,000
Long-term portion of advances on contracts in progress                                  1,624,000         1,950,000
Deferred compensation                                                                   1,637,000         1,800,000
Other long-term liabilities                                                               126,000            60,000
                                                                                     ------------      ------------
   Total long-term liabilities                                                          4,553,000         5,560,000
                                                                                     ------------      ------------
      Total liabilities
                                                                                       42,756,000        40,232,000
                                                                                     ------------      ------------

Stockholders' equity
--------------------
   Common stock, $0.01 par value;  20,000,000 shares  authorized;  8,330,688 and
       8,321,188 shares issued and outstanding at June 30, 2008 and
       December 31, 2007, respectively                                                     83,000            83,000
   Additional paid-in capital                                                          20,429,000        19,999,000
   Accumulated deficit                                                                (12,481,000)      (11,689,000)
   Accumulated other comprehensive income (loss), net                                     (59,000)           62,000
                                                                                     ------------      ------------
      Total stockholders' equity                                                        7,972,000         8,455,000
                                                                                     ------------      ------------
      Total liabilities and stockholders' equity                                     $ 50,728,000      $ 48,687,000
                                                                                     ============      ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

(1) See Note 2.

                                       3
<PAGE>

                       SPIRE CORPORATION AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE><CAPTION>
                                                THREE MONTHS ENDED JUNE 30,          SIX MONTHS ENDED JUNE 30,
                                               ------------------------------      ------------------------------
                                                   2008              2007              2008              2007
                                                                                  AS RESTATED (1)
                                               ------------      ------------      ------------      ------------
<S>                                            <C>               <C>               <C>               <C>
Net sales and revenues
----------------------
   Sales of goods                              $ 13,510,000      $  6,100,000      $ 24,505,000      $ 10,439,000
   Contract research, service and
     license revenues                             3,375,000         2,479,000         6,918,000         5,137,000
                                               ------------      ------------      ------------      ------------

      Total net sales and revenues               16,885,000         8,579,000        31,423,000        15,576,000
                                               ------------      ------------      ------------      ------------

Costs of sales and revenues
---------------------------
   Cost of goods sold                             9,068,000         5,168,000        17,562,000         8,739,000
   Cost of contract research, services
     and licenses                                 2,342,000         2,322,000         4,716,000         4,450,000
                                               ------------      ------------      ------------      ------------

      Total cost of sales and revenues           11,410,000         7,490,000        22,278,000        13,189,000


Gross margin                                      5,475,000         1,089,000         9,145,000         2,387,000

Operating expenses
------------------
   Selling, general and administrative
     expenses                                     4,997,000         2,856,000         8,775,000         5,864,000
   Internal research and development
     expenses                                       171,000            78,000           282,000           123,000
                                               ------------      ------------      ------------      ------------
      Total operating expenses                    5,168,000         2,934,000         9,057,000         5,987,000
                                               ------------      ------------      ------------      ------------

Income (loss) from operations                       307,000        (1,845,000)           88,000        (3,600,000)
-----------------------------

Interest income (expense), net                      (48,000)          (15,000)         (108,000)            3,000
Loss on equity investment in joint venture         (234,000)             --            (364,000)             --
Foreign exchange loss                              (294,000)           (4,000)         (408,000)          (14,000)
                                               ------------      ------------      ------------      ------------
Total other expense, net                           (576,000)          (19,000)         (880,000)          (11,000)
                                               ============      ============      ============      ============

Net loss                                       $   (269,000)     $ (1,864,000)     $   (792,000)     $ (3,611,000)
                                               ============      ============      ============      ============

Loss per share  - basic and diluted            $      (0.03)     $      (0.23)     $       (.10)     $      (0.44)
                                               ============      ============      ============      ============

Weighted average number of common
  and common equivalent shares
  outstanding - basic and diluted                 8,330,029         8,263,571         8,326,474         8,255,178
                                               ============      ============      ============      ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

(1) See Note 2.

                                       4
<PAGE>

                       SPIRE CORPORATION AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE><CAPTION>
                                                                            SIX MONTHS ENDED JUNE 30,
                                                                         ------------------------------
                                                                             2008             2007
                                                                        AS RESTATED (1)
                                                                         ------------      ------------
<S>                                                                      <C>               <C>
Cash flows from operating activities:
-------------------------------------
   Net loss                                                              $   (792,000)     $ (3,611,000)
   Adjustments to reconcile net loss to net cash provided by (used
      in) operating activities:
      Depreciation and amortization                                         1,077,000           945,000
      Loss on impairment of capital equipment                                    --              78,000
      Loss on equity investment in joint venture                              364,000              --
      Deferred compensation                                                  (121,000)           47,000
      Stock-based compensation                                                409,000           208,000
      Decrease in accounts receivable reserves                                (39,000)          (47,000)
      Increase (decrease) in inventory reserves                                93,000          (210,000)
      Changes in assets and liabilities:
        Restricted cash                                                       141,000           258,000
        Accounts receivable                                                 4,454,000          (633,000)
        Inventories                                                        (4,773,000)       (5,596,000)
        Deferred Cost of Goods Sold                                          (401,000)         (205,000)
        Deposits, prepaid expenses and other current assets                   (56,000)        1,199,000
        Accounts payable, accrued liabilities and other liabilities         2,006,000           505,000
        Deposit - related party                                                  --             (68,000)
        Advances on contracts in progress                                   1,751,000         5,704,000
                                                                         ------------      ------------
           Net cash provided by (used in) operating activities              4,113,000        (1,426,000)
                                                                         ------------      ------------

Cash flows from investing activities:
-------------------------------------
   Proceeds from maturity of short-term investments                              --           5,000,000
   Purchase of property and equipment                                        (925,000)         (508,000)
   Increase in intangible and other assets                                    (49,000)         (265,000)
                                                                         ------------      ------------
           Net cash (used in) provided by investing activities               (974,000)        4,227,000
                                                                         ------------      ------------

Cash flows from financing activities:
-------------------------------------
   Principal payments on capital lease obligations - related parties         (486,000)         (448,000)
   Borrowings from (principal payments on) equipment line of
     credit, net                                                             (584,000)        3,500,000
   Proceeds from exercise of stock options                                     21,000           105,000
                                                                         ------------      ------------
           Net cash (used in) provided by financing activities             (1,049,000)        3,157,000
                                                                         ------------      ------------

Net increase in cash and cash equivalents                                   2,090,000         5,958,000
Cash and cash equivalents, beginning of period                              2,372,000         1,536,000
                                                                         ------------      ------------
Cash and cash equivalents, end of period                                 $  4,462,000      $  7,494,000
                                                                         ============      ============

Supplemental disclosures of cash flow information:
--------------------------------------------------
   Interest received                                                     $     11,000      $     50,000
                                                                         ============      ============
   Interest paid                                                         $    110,000      $       --
                                                                         ============      ============
   Interest paid - related party                                         $      9,000      $     47,000
                                                                         ============      ============
   Income taxes paid                                                     $       --        $      7,000
                                                                         ============      ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

(1) See Note 2.

                                       5
<PAGE>

                       SPIRE CORPORATION AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                             JUNE 30, 2008 AND 2007

1.      DESCRIPTION OF THE BUSINESS

        Spire  Corporation   ("Spire"  or  the  "Company")  is  a  Massachusetts
corporation incorporated in 1969. The Company's principal offices are located at
One  Patriots  Park,  Bedford,  Massachusetts,  and its  phone  number  is (781)
275-6000.   The  Company's  SEC  filings  are  available  through  its  website,
www.spirecorp.com. The Company's common stock trades on the Nasdaq Global Market
under the symbol "SPIR".

        The Company  principally  develops,  manufactures and markets customized
turnkey solutions for the solar industry,  including manufacturing equipment and
full turnkey lines for cell and module production and testing.  The Company also
offers  through  its  subsidiary  Spire  Semiconductor   concentrator  cell  and
light-emitting diode ("LED") fabrication services and through its joint venture,
Gloria Spire Solar, photovoltaic ("PV") system integration services. The Company
also  operates  a  line  of  business   associated   with  advanced   biomedical
applications.  The foundation for the Company's business is its industry-leading
expertise in materials  technologies  and surface  treatments;  this proprietary
knowledge  enables  the  Company  to  further  develop  its  offerings  in solar
equipment, optoelectronics and biomedical products and services.

        In the PV solar area,  the Company  develops,  manufactures  and markets
specialized  equipment for the  production of terrestrial  photovoltaic  modules
from solar cells.  The Company's  equipment has been installed in  approximately
190 factories in 50 countries.

        In addition to the Company's cell and module manufacturing solutions, it
has a device  fabrication  facility  where it produces,  under contract with its
customers,  gallium  arsenide (GaAs)  concentrator  cells.  Under the name Spire
Semiconductor,  this division produces GaAs concentrator cells, high performance
LEDs,  and  other  custom  semiconductor  foundry  services  for  the  Company's
customers.

        In  the  biomedical  area,  the  Company  provides  value-added  surface
treatments to manufacturers of orthopedic and other medical devices that enhance
the durability,  antimicrobial characteristics or other material characteristics
of their  products;  develops  and  markets  coated  and  uncoated  hemodialysis
catheters and related devices for the treatment of chronic kidney  disease;  and
performs  sponsored  research  programs into practical  applications of advanced
biomedical and biophotonic technologies.

        In July 2007, the Company entered into a joint venture with Gloria Solar
Co., Ltd., a leading module  manufacturer  in Taiwan,  which designs,  sells and
manages installations of photovoltaic systems. The Company's 45% ownership stake
in the joint  venture,  Gloria  Spire  Solar,  LLC,  was  obtained  through  the
contribution  of its  integrated  photovoltaic  business to Gloria  Solar.  This
transaction  has allowed the Company to focus more of its  attention on its core
solar  business,  while  continuing  to  expand  the  Spire  brand  name  in the
marketplace.

        The  Company  has been in the solar  business  for over 30 years and has
been active in research and development in the space,  with over $100 million of
research and  development  conducted which has led to over 60 patents granted to
date, as well as cell and module production,  having been a pioneer in the early
development  of solar  technology.  This expertise has provided the platform and
expertise for the Company's manufacturing equipment.

        Operating  results will depend upon  revenue  growth and product mix, as
well as the timing of shipments of higher  priced  products  from the  Company's
solar  equipment  line.  Export  sales,  which  amounted to 61% of net sales and
revenues  for the  quarter  ended  June  30,  2008,  continue  to  constitute  a
significant portion of the Company's net sales and revenues.

        The Company has incurred significant  operating losses in 2007 and 2006.
Loss from operations,  before gain on sales of trademarks, were $6.7 million and
$8.3 million in 2007 and 2006, respectively.  Income from operations for the six
months ended June 30, 2008 was $88,000.  Previous  losses from  operations  have
resulted  in cash  losses  (loss  from  operations  excluding  gain on  sales of
trademark plus or minus non-cash  adjustments) of approximately $6.1 million and
$5.4 million in 2007 and 2006,  respectively.  The Company has funded these cash
losses  from cash  receipts of $4.0  million  from the sale of a solar PV module
line along with the transfer of  technology  and rights to mark the modules with
the  Company's  trademark to the joint venture in 2007 and $7.7 million from the
sale of equity in 2006.  For the six months ended June 30,  2008,  the cash gain
(income from operations plus or minus non-cash  adjustments) was $1,871,000.  As
of June 30, 2008, the Company had unrestricted cash and cash equivalents of $4.5
million compared to unrestricted cash and cash equivalents of $2.4 million as of
December 31, 2007.  While the Company has had positive cash flow from operations
for the past three  quarters,  the Company  continues to experience  net losses.
While the Company has numerous  options on

                                       6
<PAGE>

how to fund these  losses,  including  but not limited to sales of equity or the
sale or license of assets and technology, just as it has done the past; however,
there are no assurances that the Company would be able to sell equity or sell or
license those assets on a timely basis and at  appropriate  values.  The Company
has developed  several plans to mitigate cash losses  primarily  from  increased
revenues  and,  if  required,  potential  cost  reduction  efforts  and  outside
financing.  As a result,  the Company  believes it has  sufficient  resources to
continue as a going concern through at least June 30, 2009.

2.      RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

BACKGROUND OF THE RESTATEMENT OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND
REMEDIAL MEASURES.

REVIEW OF ACCOUNTING FOR PHOTOVOLTAIC MODULE EQUIPMENT TRANSACTIONS

       In  November  2008,  management,  in  concert  with the Audit  Committee,
commenced a review of the revenue  recognized  during the fourth quarter of 2007
and the first  quarter  of 2008 with  respect  to a single  contract  due to the
existence of a previously  undisclosed  and  undocumented  side  agreement.  The
Company also conducted an internal review of other solar equipment  contracts to
determine if other  concessions or side  agreements  were granted and not timely
conveyed such that revenue could be appropriately recognized.

        The  Company  conducted  a review  of the  solar  equipment  contracting
process  and  order  management   activity,   including  a  review  of  contract
modifications.  The results of this review  revealed that during the fulfillment
of several customer orders,  concessions and contract modifications were made in
the ordinary course of business to reflect changing facts and  circumstances but
that  these  changes  were  appropriately  communicated  and  recorded.  It  was
determined  that the  identified  contract was the only  instance  where revenue
recognition  requirements  were  not  met  at the  time  revenue  was  initially
recognized. As a result, the Company has recorded adjustments to both the fourth
quarter  of 2007  and the  first  quarter  of 2008,  by  reversing  the  revenue
recognized  and  associated  costs of goods sold  previously  recorded  in those
periods.  The revenue  associated  with this contract will be deferred until the
remaining undelivered element is supplied to the customer. These adjustments are
summarized below, and generally have the effect of deferring revenue and related
cost of goods sold, previously recognized until later periods.

CUMULATIVE EFFECT OF ADJUSTMENTS ON ACCUMULATED DEFICIT

        The  following  table  presents  the  cumulative  effect of  adjustments
resulting from the reviews described above for the periods shown.

                                              Year Ended      Quarter Ended
                                             December 31,        March 31,
                                                 2007              2008
                                             ------------      ------------
                                                      As Restated
                                             ------------------------------

Net loss as originally reported              $ (1,686,000)     $   (508,000)
Adjustments related to:
    Revenue recognition                        (1,355,000)         (380,000)
    Cost of goods sold                          1,108,000           365,000
                                             ------------      ------------
Net adjustments                                  (247,000)          (15,000)
                                             ------------      ------------
Net loss as restated                         $ (1,933,000)     $   (523,000)
                                             ============      ============
Cumulative effect to accumulated deficit     $    247,000      $    262,000
                                             ============      ============

The tables below set forth the effect of the adjustments as of June 30, 2008 and
December  31,  2007  and  for  the six  month  period  ended  June  30,  2008 as
applicable:

                                       7
<PAGE>


                       SPIRE CORPORATION AND SUBSIDIARIES
            UNAUDITED RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE><CAPTION>
                                                                      JUNE 30, 2008                 DECEMBER 31, 2007
                                                               ----------------------------    ----------------------------
                                                               As Reported     As Restated     As Reported     As Restated
                                                               ------------    ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>             <C>
                           ASSETS
Current assets
--------------
   Cash and cash equivalents                                   $  4,462,000    $  4,462,000    $  2,372,000    $  2,372,000
   Restricted cash - current portion                                250,000         250,000         391,000         391,000
                                                               ------------    ------------    ------------    ------------
                                                                  4,712,000       4,712,000       2,763,000       2,763,000

   Accounts receivable - trade, net                               7,450,000       7,450,000      12,766,000      11,865,000
   Inventories, net                                              23,211,000      16,239,000      18,506,000      11,570,000
   Deferred cost of goods sold                                         --         8,445,000            --         8,044,000
   Deposits on equipment for inventory                            2,682,000       2,682,000       2,475,000       2,475,000
   Prepaid expenses and other current assets                        391,000         391,000         542,000         542,000
                                                               ------------    ------------    ------------    ------------
        Total current assets                                     38,446,000      39,919,000      37,052,000      37,259,000

Property and equipment, net                                       6,108,000       6,108,000       6,209,000       6,209,000

Intangible and other assets, net                                    849,000         849,000         851,000         851,000
Available-for-sale investments, at quoted market value (cost
  of $1,696,000 and $1,696,000 at 6/30/08 and 12/31/07,
  respectively)                                                   1,637,000       1,637,000       1,800,000       1,800,000
Equity investment in joint venture                                1,911,000       1,911,000       2,264,000       2,264,000
Deposit - related party                                             304,000         304,000         304,000         304,000
                                                               ------------    ------------    ------------    ------------
        Total other assets                                        4,701,000       4,701,000       5,219,000       5,219,000
                                                               ------------    ------------    ------------    ------------
        Total assets                                           $ 49,255,000    $ 50,728,000    $ 48,480,000    $ 48,687,000
                                                               ============    ============    ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
-------------------
   Current portion of capital lease obligation - related       $       --      $       --      $    486,000    $    486,000
party
   Current portion of equipment line of credit                    1,167,000       1,167,000       1,167,000       1,167,000
   Accounts payable                                               5,017,000       5,017,000       2,909,000       2,909,000
   Accrued liabilities                                            5,889,000       5,889,000       6,057,000       6,057,000
   Current portion of advances on contracts in progress          24,395,000      26,130,000      23,599,000      24,053,000
                                                               ------------    ------------    ------------    ------------
      Total current liabilities                                  36,468,000      34,218,000      34,672,000      38,203,000

Long-term portion of equipment line of credit                     1,166,000       1,166,000       1,750,000       1,750,000
Long-term portion of advances on contracts in progress            1,624,000       1,624,000       1,950,000       1,950,000
Deferred compensation                                             1,637,000       1,637,000       1,800,000       1,800,000
Other long-term liabilities                                         126,000         126,000          60,000          60,000
                                                               ------------    ------------    ------------    ------------
   Total long-term liabilities                                    4,553,000       4,553,000       5,560,000       5,560,000
                                                               ------------    ------------    ------------    ------------
      Total liabilities                                          41,021,000      42,756,000      39,778,000      40,232,000
                                                               ------------    ------------    ------------    ------------

Stockholders' equity
--------------------
  Common stock, $0.01 par value; 20,000,000
     shares  authorized; 8,330,688 and 8,321,188
     shares issued and outstanding at June 30, 2008
     and December 31, 2007, respectively                             83,000          83,000          83,000          83,000
   Additional paid-in capital                                    20,429,000      20,429,000      19,999,000      19,999,000
   Accumulated deficit                                          (12,219,000)    (12,481,000)    (11,442,000)    (11,689,000)
   Accumulated other comprehensive income, net                      (59,000)        (59,000)         62,000          62,000
                                                               ------------    ------------    ------------    ------------
      Total stockholders' equity                                  8,234,000       7,972,000       8,702,000       8,455,000
                                                               ------------    ------------    ------------    ------------
      Total liabilities and stockholders' equity               $ 49,255,000    $ 50,728,000    $ 48,480,000    $ 48,687,000
                                                               ============    ============    ============    ============
</TABLE>

                                       8
<PAGE>

                       SPIRE CORPORATION AND SUBSIDIARIES
       UNAUDITED RESTATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE><CAPTION>
                                                         SIX MONTHS ENDED JUNE 30, 2008
                                                          ----------------------------
                                                          AS REPORTED     AS RESTATED
                                                          ------------    ------------
<S>                                                       <C>             <C>
Net sales and revenues
----------------------
   Sales of goods                                         $ 24,885,000    $ 24,505,000
   Contract research, service and license revenues           6,918,000       6,918,000
                                                          ------------    ------------
      Total net sales and revenues                          31,803,000      31,423,000

Costs of sales and revenues
---------------------------
   Cost of goods sold                                       17,927,000      17,562,000
   Cost of contract research, services and licenses          4,716,000       4,716,000
                                                          ------------    ------------
      Total cost of sales and revenues                      22,643,000      22,278,000
                                                          ------------    ------------
Gross Margin                                                 9,160,000       9,145,000

Operating expenses
------------------
   Selling, general and administrative expenses              8,775,000       8,775,000
   Internal research and development expenses                  282,000         282,000
                                                          ------------    ------------
      Total operating expenses                               9,057,000       9,057,000
                                                          ------------    ------------
Income from operations                                         103,000          88,000
----------------------

Interest income (expense), net                                (108,000)       (108,000)
Loss on equity investment in joint venture                    (364,000)       (364,000)
Foreign exchange loss                                         (408,000)       (408,000)
                                                          ------------    ------------
Total other income (expense), net                             (880,000)       (880,000)
                                                          ------------    ------------
Net loss                                                  $   (777,000)   $   (792,000)
                                                          ============    ============

Loss per share - basic and diluted                        $      (0.09)   $      (0.10)
                                                          ============    ============

Weighted average number of common and common equivalent
shares outstanding - basic and diluted                       8,326,474       8,326,474
                                                          ============    ============
</TABLE>

                                       9
<PAGE>

                       SPIRE CORPORATION AND SUBSIDIARIES
       UNAUDITED RESTATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE><CAPTION>
                                                                      SIX MONTHS ENDED JUNE 30, 2008
                                                                       ----------------------------
                                                                       AS REPORTED     AS RESTATED
                                                                       ------------    ------------
<S>                                                                    <C>             <C>
Cash flows from operating activities:
-------------------------------------
   Net loss                                                            $   (777,000)   $   (792,000)
   Adjustments to reconcile net loss to net cash provided by (used
      in) operating activities:
      Depreciation and amortization                                       1,077,000       1,077,000
      Loss on impairment of capital equipment                                  --              --
      Loss on equity investment in joint venture                            364,000         364,000
      Deferred compensation                                                (121,000)       (121,000)
      Stock-based compensation                                              409,000         409,000
      Decrease in accounts receivable reserves                              (39,000)        (39,000)
      Decrease in inventory reserves                                         93,000          93,000
      Changes in assets and liabilities:
        Restricted cash                                                     141,000         141,000
        Accounts receivable                                               5,355,000       4,454,000
        Inventories                                                      (4,809,000)     (4,773,000)
        Deferred cost of goods sold                                            --          (401,000)
        Deposits, prepaid expenses and other current assets                 (56,000)        (56,000)
        Accounts payable, accrued liabilities and other liabilities       2,006,000       2,006,000
        Advances on contracts in progress                                   470,000       1,751,000
                                                                       ------------    ------------
           Net cash provided by (used in) operating activities            4,113,000       4,113,000
                                                                       ------------    ------------

Cash flows from investing activities:
-------------------------------------
   Proceeds from maturity of short-term investments                            --              --
   Purchase of property and equipment                                      (925,000)       (925,000)
   Increase in intangible and other assets                                  (49,000)        (49,000)
                                                                       ------------    ------------
           Net cash provided by (used in) investing activities             (974,000)       (974,000)
                                                                       ------------    ------------

Cash flows from financing activities:
-------------------------------------
   Principal payments on capital lease obligations - related parties       (486,000)       (486,000)
   Principal payments on equipment line of credit, net                     (584,000)       (584,000)
   Proceeds from exercise of stock options                                   21,000          21,000
                                                                       ------------    ------------
           Net cash used in financing activities                         (1,049,000)     (1,049,000)
                                                                       ------------    ------------

Net increase (decrease) in cash and cash equivalents                      2,090,000       2,090,000
Cash and cash equivalents, beginning of period                            2,372,000       2,372,000
                                                                       ------------    ------------
Cash and cash equivalents, end of period                               $  4,462,000    $  4,462,000
                                                                       ============    ============

Supplemental disclosures of cash flow information:
--------------------------------------------------
   Interest received                                                   $     11,000    $     11,000
                                                                       ============    ============
   Interest paid                                                       $    110,000    $    110,000
                                                                       ============    ============
   Interest paid - related party                                       $      9,000    $      9,000
                                                                       ============    ============
</TABLE>

                                       10
<PAGE>

3.      INTERIM FINANCIAL STATEMENTS

        The accompanying  unaudited condensed  consolidated financial statements
have  been  prepared  in  accordance  with  the  rules  and  regulations  of the
Securities  and  Exchange  Commission  regarding  interim  financial  reporting.
Certain information and footnote  disclosures  normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted  in the United  States of  America  have been  condensed  or omitted in
accordance  with  such  rules  and   regulations.   These  unaudited   condensed
consolidated  financial statements should be read in conjunction with the annual
audited  consolidated  financial statements and notes thereto for the year ended
December 31, 2007,  included in the  Company's  Annual Report on Form 10-K filed
with the Securities and Exchange Commission.

        In the opinion of  management,  the  accompanying  unaudited,  condensed
consolidated  financial  statements contain all adjustments  necessary to fairly
present the  Company's  financial  position as of June 30, 2008 and December 31,
2007 and the  results  of its  operations  and cash  flows for the three and six
months ended June 30, 2008 and 2007. The results of operations for the three and
six months ended June 30, 2008 are not necessarily  indicative of the results to
be  expected  for the fiscal  year  ending  December  31,  2008.  The  condensed
consolidated balance sheet as of December 31, 2007 has been derived from audited
financial statements as of that date.

        The  accounting  policies  followed  by the  Company  are set  forth  in
Footnote 3 to the  Company's  consolidated  financial  statements  in its Annual
Report on Form 10-K/A for the year ended December 31, 2007.

New Accounting Pronouncements
-----------------------------

        In December  2007,  the Financial  Accounting  Standards  Board ("FASB")
issued  Statement  of  Financial  Accounting  Standards  ("SFAS") No. 141R ("FAS
141R"),  BUSINESS  COMBINATIONS,  which  revises  FAS 141 and  changes  multiple
aspects of the accounting for business  combinations.  Under the guidance in FAS
141R,  the  acquisition  method must be used,  which  requires  the  acquirer to
recognize  most  identifiable   assets  acquired,   liabilities   assumed,   and
non-controlling  interests  in the  acquiree  at their  full  fair  value on the
acquisition   date.   Goodwill  is  to  be  recognized  as  the  excess  of  the
consideration  transferred plus the fair value of the  non-controlling  interest
over the fair values of the identifiable net assets acquired. Subsequent changes
in the fair value of contingent  consideration  classified as a liability are to
be recognized in earnings,  while contingent  consideration classified as equity
is not to be  re-measured.  Costs such as  transaction  costs are to be excluded
from acquisition  accounting,  generally  leading to recognizing  expense,  and,
additionally,   restructuring  costs  that  do  not  meet  certain  criteria  at
acquisition date are to be subsequently  recognized as  post-acquisition  costs.
FAS 141R is effective for business  combinations  for which the acquisition date
is on or after the beginning of the first annual  reporting  period beginning on
or after December 15, 2008. The Company is currently  evaluating the impact,  if
any,  that this  standard  will have on its  financial  position  and results of
operations.

        In  December   2007,   the  FASB  issued  SFAS  No.  160  ("FAS   160"),
NON-CONTROLLING  INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS - AN AMENDMENT OF
ARB NO. 151. FAS 160 requires  that a  non-controlling  interest in a subsidiary
(i.e.  minority interest) be reported in the equity section of the balance sheet
instead of being  reported as a liability or in the  mezzanine  section  between
debt and equity. It also requires that the consolidated income statement include
consolidated  net income  attributable  to both the  parent and  non-controlling
interest of a consolidated  subsidiary. A disclosure must be made on the face of
the consolidated  income statement of the net income  attributable to the parent
and to the  non-controlling  interest.  Also,  regardless  of whether the parent
purchases  additional  ownership  interest,  sells a  portion  of its  ownership
interest in a subsidiary or the subsidiary  participates  in a transaction  that
changes  the  parent's  ownership  interest,  as  long  as  the  parent  retains
controlling interest,  the transaction is considered an equity transaction.  FAS
160 is effective  for annual  periods  beginning  after  December 15, 2008.  The
Company is currently evaluating the impact, if any, that this standard will have
on its financial position and results of operations.

        In March 2008,  the FASB issued  SFAS No. 161 ("FAS  161"),  DISCLOSURES
ABOUT  DERIVATIVE  INSTRUMENTS  AND  HEDGING  ACTIVITIES--AN  AMENDMENT  OF FASB
STATEMENT  NO. 133.  FAS 161  requires  enhanced  disclosures  about an entity's
derivative  and hedging  activities.  Entities are required to provide  enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative  instruments  and  related  hedged  items  are  accounted  for  under
Statement  No.  133  and its  related  interpretations,  and (c) how  derivative
instruments  and related  hedged  items affect an entity's  financial  position,
financial  performance,  and cash  flows.  FAS 161 is  effective  for  financial
statements  issued for fiscal years and interim periods beginning after November
15, 2008, with early application  encouraged.  FAS 161 encourages,  but does not
require,  comparative  disclosures for earlier periods at initial adoption.  The
Company is currently evaluating the impact, if any, that this standard will have
on its financial position and results of operations.

                                       11
<PAGE>

        In May 2008, the FASB issued SFAS No. 162 ("FAS 162"),  THE HIERARCHY OF
GENERALLY  ACCEPTED  ACCOUNTING  PRINCIPLES.  FAS 162  identifies the sources of
accounting  principles and the framework for selecting the principles to be used
in the preparation of financial statements that are presented in conformity with
generally  accepted  accounting  principles  in the  United  States.  FAS 162 is
effective 60 days following the SEC's approval of the Public Company  Accounting
Oversight  Board  amendments to AU Section 411, THE MEANING OF PRESENT FAIRLY IN
CONFORMITY  WITH  GENERALLY  ACCEPTED  ACCOUNTING  PRINCIPLES.  The  Company  is
currently  evaluating  the impact,  if any,  that this standard will have on its
financial position and results of operations.

4.      ACCOUNTS RECEIVABLE/ADVANCES ON CONTRACTS IN PROGRESS

        Net accounts receivable, trade consists of the following:

<TABLE><CAPTION>
                                                                       June 30,      December 31,
                                                                         2008            2007
                                                                                     As Restated
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
          Amounts billed                                             $  6,611,000    $ 11,142,000
          Retainage                                                         8,000           8,000
          Accrued revenue                                               1,022,000         945,000
                                                                     ------------    ------------
                                                                        7,641,000      12,095,000
          Less:  Allowance for sales returns and doubtful accounts       (191,000)       (230,000)
                                                                     ------------    ------------
          Net accounts receivable, trade                             $  7,450,000    $ 11,865,000
                                                                     ============    ============
          Advances on contracts in progress                          $ 27,754,000    $ 26,003,000
                                                                     ============    ============
</TABLE>

        Retainage  represents  revenues  on  certain  United  States  government
sponsored  research and  development  contracts.  These  amounts,  which usually
represent 15% of the Company's research fee on each applicable contract, are not
collectible until a final cost review has been performed by government auditors.
The government's  most recent audit was as of December 31, 2006, with no adverse
impact.

        Accrued revenue  represents  revenues  recognized on contracts for which
billings  have not been  presented to  customers  as of the balance  sheet date.
These amounts are billed and generally collected within one year.

        The Company  maintains  allowances  for doubtful  accounts for estimated
losses  resulting  from the  inability of its  customers to pay amounts due. The
Company actively pursues collection of past due receivables as the circumstances
warrant.  Customers  are contacted to determine the status of payment and senior
accounting and operations  management are included in these efforts as is deemed
necessary.  A specific reserve will be established for past due accounts when it
is  probable  that a loss has  been  incurred  and the  Company  can  reasonably
estimate the amount of the loss.  The Company  does not record an allowance  for
government   receivables   and   invoices   backed  by   letters  of  credit  as
realizeability  is  reasonably  assured.  Bad debts are  written off against the
allowance  when  identified.  There is no dollar  threshold for account  balance
write-offs. While rare, a write-off is only recorded when all efforts to collect
the receivable have been exhausted and only in consultation with the appropriate
business line manager.

        In addition,  the Company  maintains an allowance for  potential  future
product  returns and rebates  related to current  period  revenues.  The Company
analyzes  the rate of  historical  returns when  evaluating  the adequacy of the
allowance  for sales  returns  and  allowances.  Returns and rebates are charged
against the allowance when incurred.

        Advances on contracts in progress represent contracts for which billings
have been  presented to the  customer,  either as deposits or progress  payments
against future shipments, but revenue has not been recognized.

5.      INVENTORIES

        Inventories,  net of $447,000  and $354,000 of reserves at June 30, 2008
and December 31, 2007, respectively, consist of the following
at:

                                          June 30,     December 31,
                                            2008           2007
                                        ------------   ------------
                                                As Restated
                                        ---------------------------

          Raw materials                 $  5,629,000   $  4,989,000
          Work in process                  5,732,000      4,663,000
          Finished goods                   4,878,000      1,918,000
                                        ------------   ------------
          Net Inventory                 $ 16,239,000   $ 11,570,000
                                        ============   ============
          Deferred cost of goods sold   $  8,445,000   $  8,044,000
                                        ============   ============

                                       12
<PAGE>

        Deferred  costs of goods sold  represents  costs on  equipment  that has
shipped to the  customer  and title has passed.  The Company  defers these costs
until related revenue is recognized.

6.      INCOME (LOSS) PER SHARE

        The following table provides a reconciliation of the denominators of the
Company's  reported basic and diluted income (loss) per share  computations  for
the periods ended:

<TABLE><CAPTION>
                                                     Three Months Ended June 30,    Six Months Ended June 30,
                                                     ---------------------------   ---------------------------
                                                         2008           2007           2008           2007
                                                     ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>            <C>            <C>
     Weighted average number of common and common
       equivalent shares outstanding - basic            8,330,029      8,263,571      8,326,474      8,255,178
     Add: Net additional common shares upon
       assumed exercise of common stock options              --             --             --             --
                                                     ------------   ------------   ------------   ------------
     Adjusted weighted average number of common
       and common equivalents shares outstanding -
       diluted                                          8,330,029      8,263,571      8,326,474      8,255,178
                                                     ============   ============   ============   ============
</TABLE>

        For the three and six months  ended June 30,  2008,  168,834 and 188,760
shares,  respectively,  and for the three and six months  ended  June 30,  2007,
125,360 and  106,230  shares,  respectively,  of common  stock  related to stock
options  were  excluded  from the  calculation  of dilutive  shares  because the
inclusion of such shares would be  anti-dilutive  due to the  Company's net loss
position.

        In addition,  for the three and six months  ended June 30, 2008,  39,500
and zero shares,  respectively,  and for the three and six months ended June 30,
2007, 6,250 and 91,250 shares,  respectively,  of common stock issuable relative
to stock options were excluded from the  calculation  of diluted  shares because
their  inclusion  would have been  anti-dilutive,  due to their exercise  prices
exceeding the average market price of the stock for the periods.

                                       13
<PAGE>

7.      OPERATING SEGMENTS AND RELATED INFORMATION

        The following table presents certain operating  division  information in
accordance with the provisions of SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information."

<TABLE><CAPTION>
                                                                                              Total
                                               Solar        Biomedical   Optoelectronics     Company
                                           ------------------------------------------------------------
For the three months ended June 30, 2008
----------------------------------------
<S>                                        <C>             <C>             <C>             <C>
Net sales and revenues                     $ 12,647,000    $  2,858,000    $  1,380,000    $ 16,885,000
Income (loss) from operations              $  1,127,000    $   (181,000)   $   (639,000)   $    307,000

For the three months ended June 30, 2007
----------------------------------------
Net sales and revenues                     $  4,975,000    $  2,827,000    $    777,000    $  8,579,000
Loss from operations                       $   (725,000)   $   (215,000)   $   (905,000)   $ (1,845,000)

                                                                                               Total
                                               Solar        Biomedical   Optoelectronics      Company
                                            As Restated                                     As Restated
                                           ------------------------------------------------------------
For the six months ended June 30, 2008
--------------------------------------
Net sales and revenues                     $ 22,940,000    $  5,666,000    $  2,817,000    $ 31,423,000
Income (loss) from operations              $  1,440,000    $   (357,000)   $   (995,000)   $     88,000

For the six months ended June 30, 2007
--------------------------------------
Net sales and revenues                     $  8,568,000    $  5,353,000    $  1,655,000    $ 15,576,000
Loss from operations                       $ (1,308,000)   $   (726,000)   $ (1,566,000)   $ (3,600,000)
</TABLE>


The following  table shows net sales and revenues by  geographic  area (based on
customer location):


<TABLE>
<CAPTION>
                              Three Months Ended June 30,                           Six Months Ended June 30,
                    ------------------------------------------------    ------------------------------------------------
                        2008          %           2007          %          2008           %           2007          %
                                                                        As Restated
                    ------------    ------    ------------    ------    ------------    ------    ------------    ------
<S>                 <C>                 <C>   <C>                 <C>   <C>                 <C>   <C>                 <C>
United States       $  6,532,000        39%   $  4,901,000        57%   $ 11,967,000        38%   $  8,112,000        52%
Europe/Africa          3,104,000        18       2,047,000        24       8,323,000        27       3,749,000        24
Asia                   7,100,000        42       1,425,000        17      10,747,000        34       3,422,000        22
Rest of the world        149,000         1         206,000         2         386,000         1         293,000         2
                    ------------              ------------              ------------              ------------
                    $ 16,885,000       100%   $  8,579,000       100%   $ 31,423,000       100%   $ 15,576,000       100%
                    ============              ============              ============              ============
</TABLE>

        Revenues from contracts with United States  government  agencies for the
three  months  ended  June 30,  2008 and 2007 were  approximately  $353,000  and
$225,000, or 2% and 3% of consolidated net sales and revenues, respectively.

        Revenues from contracts with United States  government  agencies for the
six  months  ended  June 30,  2008  and 2007  were  approximately  $753,000  and
$520,000, or 2% and 3% of consolidated net sales and revenues, respectively.

        One customer accounted for approximately 11% and two customers accounted
for approximately 37% of the Company's gross sales during the three months ended
June 30, 2008 and 2007,  respectively.  One customer accounted for approximately
15% and three customers  accounted for  approximately 41% of the Company's gross
sales  during the six months  ended June 30,  2008 and 2007,  respectively.  Two
customers  represented 23% of trade account receivables at June 30, 2008 and two
customers represented 46% of trade account receivables at December 31, 2007.

8.      INTANGIBLE AND OTHER ASSETS

        Patents  amounted  to  $117,000,  net  of  accumulated  amortization  of
$713,000,  at June 30, 2008.  Licenses  amounted to $83,000,  net of accumulated
amortization of $242,000, at June 30, 2008. Patent cost is primarily composed of
cost associated with securing and registering  patents that the Company has been
awarded  or that  have been  submitted  to,  and the  Company  believes  will be
approved  by, the  government.  License  cost is composed of the cost to acquire
rights to the underlying technology or know-how. These costs are capitalized and
amortized  over their useful lives or terms,  ordinarily  five years,  using the
straight-line  method.  There are no expected  residual  values related to these
patents or licenses.  For disclosure  purposes,  the table below includes future
amortization  expense for licenses  and patents  owned by the Company

                                       14
<PAGE>

as  well  as  $640,000  of  estimated   amortization   expense  on  a  five-year
straight-line  basis  related to patents  that remain  pending as of the balance
sheet date.

        Estimated amortization expense for the periods ending December 31, is as
follows:

                               Year                   Amortization Expense
                   ---------------------------        --------------------

                   2008 remaining 6 months                 $  104,000
                   2009                                       178,000
                   2010                                       173,000
                   2011                                       167,000
                   2012 and beyond                            218,000
                                                           ----------
                                                           $  840,000
                                                           ==========

        Also included in other assets at June 30, 2008 are approximately  $9,000
of unamortized expenses that were prepaid.

9.      AVAILABLE-FOR-SALE INVESTMENTS

        Available-for-sale  securities  consist of the following  assets held as
part of the Spire Corporation Non-Qualified Deferred Compensation Plan:

                                                    June 30,     December 31,
                                                      2008           2007
                                                  ------------   ------------

                    Equity investments            $  1,363,000   $  1,411,000
                    Government bonds                   222,000        303,000
                    Cash and money market funds         52,000         86,000
                                                  ------------   ------------
                                                  $  1,637,000   $  1,800,000
                                                  ============   ============

        These  investments have been classified as long-term  available-for-sale
investments  and are reported at fair value,  with  unrealized  gains and losses
included in  accumulated  other  comprehensive  loss.  As of June 30, 2008,  the
unrealized loss on these marketable securities was $59,000.

        Effective January 1, 2008, the Company adopted SFAS No. 157, "Fair Value
Measurements" ("FAS 157"). In February 2008, the FASB issued FASB Staff Position
No. FAS 157-2,  "Effective Date of FASB Statement No. 157," which provides a one
year  deferral of the  effective  date of FAS 157 for  non-financial  assets and
non-financial liabilities,  except those that are recognized or disclosed in the
financial statements at fair value at least annually. Therefore, the Company has
adopted  the  provisions  of FAS 157 with  respect to its  financial  assets and
liabilities  only.  FAS 157 defines  fair  value,  establishes  a framework  for
measuring fair value, and expands disclosures about fair value measurements. The
new standard provides a consistent  definition of fair value which focuses on an
exit price which is the price that would be received to sell an asset or paid to
transfer a liability in an orderly  transaction  between market  participants at
the measurement date. The standard also  prioritizes,  within the measurement of
fair value, the use of market-based information over entity specific information
and establishes a three-level hierarchy for fair value measurements based on the
nature  of  inputs  used in the  valuation  of an asset or  liability  as of the
measurement date.

           The hierarchy established under FAS 157 gives the highest priority to
unadjusted  quoted prices in active markets for identical  assets or liabilities
(Level 1) and the lowest priority to unobservable  inputs (Level 3). As required
by FAS 157, the Company's  available for sale investments are classified  within
the fair value  hierarchy based on the lowest level of input that is significant
to the fair value  measurement.  The three  levels of the fair  value  hierarchy
under  FAS  157,  and its  applicability  to the  Company's  available  for sale
investments, are described below:

           Level 1 -  Pricing  inputs  are  quoted  prices  available  in active
           markets  for  identical  investments  as of the  reporting  date.  As
           required by FAS 157, the Company does not adjust the quoted price for
           these investments, even in situations where the Company holds a large
           position and a sale could reasonably impact the quoted price.

           Level 2 - Pricing  inputs are quoted prices for similar  investments,
           or inputs that are  observable,  either  directly or indirectly,  for
           substantially  the full term through  corroboration  with  observable
           market data.  Level 2 includes  investments  valued at quoted  prices
           adjusted  for legal or  contractual  restrictions  specific  to these
           investments.

           Level 3 - Pricing inputs are  unobservable  for the investment,  that
           is, inputs that reflect the reporting  entity's own assumptions about
           the assumptions market participants would use in pricing the asset or
           liability.  Level 3 includes investments that are supported by little
           or no market activity.

                                       15
<PAGE>

        The following table presents the financial  instruments  carried at fair
value as of June 30, 2008 by FAS 157 valuation hierarchy (as defined above).

<TABLE>
<CAPTION>
                                                    Level 1         Level 2         Level 3         Total
                                                  -----------     -----------     -----------     ----------
<S>                                               <C>             <C>             <C>             <C>
            Available for sale investments        $ 1,372,000     $   265,000          --         $1,637,000
            Percent of total                              84%             16%          --               100%
</TABLE>

10.     NOTES PAYABLE AND CREDIT ARRANGEMENTS

        The  Company had a  $2,000,000  Loan  Agreement  with  Citizens  Bank of
Massachusetts  which expired on June 26, 2007. On May 25, 2007,  the Company and
its wholly-owned subsidiary,  Spire Semiconductor,  LLC, entered into a Loan and
Security  Agreement (the "Equipment  Credit  Facility") with Silicon Valley Bank
(the "Bank").  Under the Equipment Credit Facility,  for a one-year period,  the
Company and Spire  Semiconductor  could borrow up to $3,500,000 in the aggregate
to finance  certain  equipment  purchases  (including  reimbursement  of certain
previously-made  purchases).  Advances made under the Equipment  Credit Facility
would bear  interest at the Bank's  prime  rate,  as  determined,  plus 0.5% and
payable in thirty-six (36) consecutive  monthly  payments  following the funding
date of that advance.

        On March 31, 2008,  the Company  entered into a second Loan and Security
Agreement (the "Revolving  Credit  Facility") with the Bank.  Under the terms of
the  Revolving  Credit  Facility,  the Bank agreed to provide the Company with a
credit line up to  $5,000,000.  The  Company's  obligations  under the Equipment
Credit  Facility  are secured by  substantially  all of its assets and  advances
under the Revolving  Credit Facility are limited to 80% of eligible  receivables
and the lesser of 25% of the value of its  eligible  inventory,  as defined,  or
$2,500,000 if the inventory is backed by a customer  letter of credit.  Interest
on  outstanding  borrowings  accrues at a rate per annum equal to the greater of
Prime Rate plus one percent  (1.0%) or seven  percent  (7%).  In  addition,  the
Company agreed to pay to the Bank a collateral  monitoring fee of $750 per month
in the event the  Company  is in  default  of its  covenants  and  agreed to the
following  additional terms: (i) $50,000 commitment fee; (ii) an unused line fee
in the amount of 0.75% per annum of the average  unused portion of the revolving
line; and (iii) an early termination fee of 0.5% of the total credit line if the
Company  terminates  the Revolving  Credit  Facility prior to 12 months from the
Revolving Credit  Facility's  effective date. The Revolving Credit Facility,  if
not sooner  terminated in accordance with its terms,  expires on March 30, 2009.
In addition,  on March 31, 2008 the Company's existing Equipment Credit Facility
was amended whereby the Bank granted a waiver for the Company's defaults for not
meeting its December 31, 2007 quarter liquidity and profit covenants and for not
meeting  its  January  and  February  2008  liquidity  covenants.  Further,  the
covenants  were amended to match the covenants as discussed  below  contained in
the Revolving Credit Facility.  The Company's  interest rate under the Equipment
Credit  Facility was also  modified from Bank Prime plus one half percent to the
greater of Bank Prime plus one percent (1%) or seven percent (7%).

        On May 13, 2008, the Bank amended the Equipment  Credit Facility and the
Revolving  Credit  Facility,  modifying the  Company's net income  profitability
covenant  requirements in exchange for a three quarters percent (0.75%) increase
in the Company's interest rate (7.75% at June 30, 2008) and waiver restructuring
fee equal to one half percent (0.5%) of amounts  outstanding under the Equipment
Credit Facility and committed under the Revolving Credit Facility.  In addition,
the  Company's  term loan  balance  will be  factored  in when  calculating  the
Company's borrowing base under the Revolving Credit Facility.

        Under  the  amended  terms  of both  credit  facilities,  as long as any
commitment  remains  outstanding  under the facilities,  the Company must comply
with an adjusted quick ratio covenant and a minimum monthly net income covenant.
In addition,  until all amounts  under the credit  facilities  with the Bank are
repaid,  covenants  under  the  credit  facilities  impose  restrictions  on the
Company's ability to, among other things, incur additional indebtedness,  create
or permit liens on the Company's assets, merge, consolidate or dispose of assets
(other  than in the  ordinary  course  of  business),  make  dividend  and other
restricted  payments,  make  certain  debt or equity  investments,  make certain
acquisitions,  engage in  certain  transactions  with  affiliates  or change the
business  conducted  by the  Company  and its  subsidiaries.  Any failure by the
Company to comply with the covenants and obligations under the credit facilities
could  result in an event of default,  in which case the Bank may be entitled to
declare  all  amounts  owed to be due and  payable  immediately.  The  Company's
obligations  under the credit facilities are secured by substantially all of its
assets.

        At  June  30,  2008,  the  Company's  outstanding  borrowings  from  the
Equipment  Credit  Facility  amounted to $2,333,000 and there were no borrowings
from the  Revolving  Credit  Facility.  The Company was in  compliance  with its
covenants as of June 30, 2008.

                                       16
<PAGE>

11.     STOCK OPTION PLAN AND STOCK-BASED COMPENSATION

        On January 1,  2006,  the  Company  adopted  the fair value  recognition
provisions  of  FASB  Statement  No.  123(R),  Share-Based  Payment  ("Statement
123(R)")  using the  modified  prospective  method.  Based on an analysis of the
Company's  historical  data,  for the three months ended June 30, 2008 and 2007,
the Company applied 8% and 14% forfeiture rates, respectively,  to stock options
outstanding in determining its Statement 123(R) stock-based compensation expense
which it believes are  reasonable  forfeiture  estimates  for the  periods.  The
impact of Statement  123(R) on the Company's  results of operations  resulted in
recognition of stock-based  compensation  expense of approximately  $213,000 and
$137,000 for the three months  ended June 30, 2008 and 2007,  respectively,  and
approximately  $409,000  and $208,000 for the six months ended June 30, 2008 and
2007,  respectively.   The  total  non-cash,  stock-based  compensation  expense
included in the condensed  consolidated  statement of operations for the periods
presented is included in the following expense categories:

<TABLE><CAPTION>
                                                           Three Months Ended June 30,    Six Months Ended June 30,
                                                           ---------------------------   ---------------------------
                                                               2008           2007           2008           2007
                                                           ------------   ------------   ------------   ------------
<S>                                                        <C>            <C>            <C>            <C>
        Cost of contract research, services and licenses   $     14,000   $     14,000   $     27,000   $     19,000
        Cost of goods sold                                       36,000          6,000         68,000          8,000
        Administrative and selling                              163,000        117,000        314,000        181,000
                                                           ------------   ------------   ------------   ------------
              Total stock-based compensation               $    213,000   $    137,000   $    409,000   $    208,000
                                                           ============   ============   ============   ============
</TABLE>

        At June 30,  2008 the Company had  outstanding  options  under two stock
option  plans:  the 1996 Equity  Incentive  Plan (the "1996  Plan") and the 2007
Stock Equity Plan (the "2007 Plan").  Both plans were  approved by  stockholders
and  provided  that the Board of  Directors  may grant  options to purchase  the
Company's common stock to key employees and directors of the Company.  Incentive
and  non-qualified  options must be granted at least at the fair market value of
the  common  stock or, in the case of  certain  optionees,  at 110% of such fair
market  value at the time of grant.  The  options may be  exercised,  subject to
certain  vesting  requirements,  for  periods  up to ten years  from the date of
issue.  The 1996 Plan  expired  with respect to the issuance of new grants as of
December 10, 2006.  Accordingly,  future  grants may be made only under the 2007
Plan.

        A summary of options outstanding under the 2007 Plan and 1996 Plan as of
June 30, 2008 and changes during the six-month period is as follows:

<TABLE><CAPTION>
                                                                             Average
                                                            Weighted-       Remaining       Aggregate
                                            Number of        Average       Contractual      Intrinsic
                                              Shares      Exercise Price   Life (Years)       Value
                                           ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
Options Outstanding at December 31, 2007        495,177    $       7.10
Granted                                          40,000    $      13.87
Exercised                                        (9,500)   $       2.22
Cancelled/expired                               (12,000)   $       9.56
                                           ------------    ------------
Options Outstanding at June 30, 2008            513,677    $       7.67            7.55    $  2,589,529
                                           ============    ============

Options Exercisable at June 30, 2008            265,927    $       6.47            6.43    $  1,656,389
                                           ============    ============
</TABLE>

        The  per-share  weighted-average  fair  value of stock  options  granted
during  the three  and six  months  ended  June 30,  2008 was  $9.15 and  $7.96,
respectively, and $6.45 for both periods in 2007, on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions:

                Expected         Risk-Free      Expected           Expected
     Year    Dividend Yield    Interest Rate   Option Life    Volatility Factor
    ------   --------------    -------------   -----------    -----------------
     2008           --             2.73%        4.5 years            70.6%

        The risk free interest rate reflects  treasury  yields rates over a term
that  approximates  the  expected  option  life.  The  expected  option  life is
calculated  based on historical  lives of all options issued under the plan. The
expected  volatility  factor is  determined  by measuring the actual stock price
volatility over a term equal to the expected useful life of the options granted.

                                       17
<PAGE>

12.     COMPREHENSIVE LOSS

        Comprehensive  loss includes certain changes in equity that are excluded
from net loss and consists of the following:

<TABLE><CAPTION>
                                                  ------------------------------------------------------------
                                                   For the Three Months Ended       For the Six Months Ended
                                                            June 30,                        June 30,
                                                  ----------------------------    ----------------------------
                                                      2008            2007            2008            2007
                                                                                  As Restated
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Net loss                                          $   (269,000)   $ (1,864,000)   $   (792,000)   $ (3,611,000)
Other comprehensive income (loss):
   Unrealized gain (loss) on available for sale
   marketable securities, net of tax                   (59,000)         48,000        (121,000)         47,000
                                                  ------------    ------------    ------------    ------------
Total comprehensive loss                          $   (328,000)   $ (1,816,000)   $   (913,000)   $ (3,564,000)
                                                  ============    ============    ============    ============
</TABLE>






















                                       18
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

        THIS  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS  OF  OPERATIONS   SECTION  AND  OTHER  PARTS  OF  THIS  REPORT   CONTAIN
FORWARD-LOOKING  STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT  OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND  SECTION  21E OF THE
SECURITIES  EXCHANGE  ACT OF  1934,  AS  AMENDED  (THE  "EXCHANGE  ACT"),  WHICH
STATEMENTS  INVOLVE  RISKS AND  UNCERTAINTIES.  THESE  STATEMENTS  RELATE TO OUR
FUTURE PLANS, OBJECTIVES,  EXPECTATIONS AND INTENTIONS.  THESE STATEMENTS MAY BE
IDENTIFIED  BY THE USE OF  WORDS  SUCH AS  "MAY",  "COULD",  "WOULD",  "SHOULD",
"WILL", "EXPECTS",  "ANTICIPATES",  "INTENDS", "PLANS", "BELIEVES", "ESTIMATES",
AND SIMILAR EXPRESSIONS. OUR ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS MAY
DIFFER   SIGNIFICANTLY   FROM  THE   RESULTS   AND  TIMING   DESCRIBED   IN  THE
FORWARD-LOOKING  STATEMENTS.  FACTORS  THAT COULD  CAUSE OR  CONTRIBUTE  TO SUCH
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE FACTORS DISCUSSED OR REFERRED
TO IN THIS  REPORT  AND IN THE ANNUAL  REPORT ON FORM  10-K/A FOR THE YEAR ENDED
DECEMBER 31,  2007.  THE  FOLLOWING  DISCUSSION  AND  ANALYSIS OF OUR  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN LIGHT OF THOSE FACTORS AND
IN  CONJUNCTION  WITH  OUR  ACCOMPANYING   CONSOLIDATED   FINANCIAL  STATEMENTS,
INCLUDING THE NOTES THERETO.

OVERVIEW

            We principally  develop,  manufacture and market customized  turnkey
solutions for the solar  industry,  including  manufacturing  equipment and full
turnkey lines for cell and module production and testing.  We also offer through
our subsidiary Spire  Semiconductor  concentrator cell and light-emitting  diode
("LED")  fabrication  services and through our joint venture  Gloria Spire Solar
photovoltaic  ("PV")  system  integration  services.  We also  operate a line of
business  associated with advanced biomedical  applications.  The foundation for
our business is our  industry-leading  expertise in materials  technologies  and
surface treatments; this proprietary knowledge enables us to further develop our
offerings  in solar  equipment,  optoelectronics  and  biomedical  products  and
services.

           Our initial focus on  high-energy  physics led to the  development of
our first product, the SPI-PULSE electron beam generator, to support research in
radiation  effects  testing.  We moved into the space solar cell business  after
signing a contract to develop solar cell coverslip for radiation  hardening.  In
addition,  we began to develop a new technology  based on ion  implantation  and
pulsed electron beam annealing of silicon solar cells. As a result of the energy
crisis  in  the  early  1980s,  which  forced  the  United  States  to  consider
photovoltaics  for terrestrial  applications,  we received our first terrestrial
solar  cell  contract  for  low  cost  production  using  our  ion  implantation
technology.   We  leveraged  this  knowledge  to  develop  our  state-of-the-art
manufacturing equipment, in addition to our offerings in the optoelectronics and
biomaterials industries.

           As photovoltaic cell and module  manufacturers  ramp up production to
meet increasing  demand,  they will first need to acquire greater  quantities of
turnkey  equipment in order to produce more photovoltaic  cells and modules.  We
believe that we are one of the world's  leading  suppliers of the  manufacturing
equipment and technology needed to produce solar photovoltaic power systems. Our
individual  manufacturing  equipment  products  and  our  SPI-LINETM  integrated
turnkey cell and module production lines can be highly scaled,  customized,  and
automated with high throughput.  These systems are designed to meet the needs of
a broad range of customers ranging from  manufacturers  relying on mostly manual
processes,  to some of the largest photovoltaic  manufacturing  companies in the
world.

           In addition to our cell and module manufacturing solutions, we have a
device fabrication facility where we produce, under contract with our customers,
gallium arsenide (GaAs) concentrator cells. The  state-of-the-art  semiconductor
fabrication  and foundry  facility is the  foundation  of our solar cell process
technology  for silicon,  polysilicon,  thin film and GaAs  concentrator  cells.
Under the name Spire  Semiconductor,  this division  produces GaAs  concentrator
cells,  high performance LEDs, and other custom  semiconductor  foundry services
for our customers.

           In July 2007,  we entered into a joint venture with Gloria Solar Co.,
Ltd., a leading module manufacturer in Taiwan, which designs,  sells and manages
installations  of  photovoltaic  systems.  Our 45% ownership  stake in the joint
venture,  Gloria Spire Solar,  LLC, was obtained through the contribution of our
integrated  photovoltaic  business to Gloria Solar. This transaction has allowed
us to focus more of our attention on our core solar business,  while  continuing
to expand the Spire brand name in the marketplace.

           Capitalizing on our expertise in surface  treatments,  we also have a
biomedical  division which  manufactures  medical devices and provides  advanced
medical device surface treatment processes to our customers.  Our medical device
business  develops,  manufactures and sells premium products for vascular access
in chronic kidney disease patients.  Our surface treatment business modifies the
surfaces of medical devices to improve their performance.

        We have  been in the  solar  business  for over 30 years  and have  been
active in  research  and  development  in the space,  with over $100  million of
research and  development  conducted which has led to over 60 patents granted to
date, as well as cell and module production,  having been a pioneer in the early
development  of solar  technology.  This expertise has

                                       19
<PAGE>

provided the platform and expertise  for our  manufacturing  equipment.  We have
equipment deployed in approximately 50 countries.

        Operating  results will depend upon  revenue  growth and product mix, as
well as the  timing  of  shipments  of  higher  priced  products  from our solar
equipment  line.  Export sales,  which amounted to 62% of net sales and revenues
for the six months ended June 30,  2008,  continue to  constitute a  significant
portion of our net sales and revenues.

Restatements
------------

        We restated our previously issued consolidated  financial  statements as
of and for the year ended December 31, 2007 and as of and for the quarters ended
March 31,  2008 and June 30, 2008 to correct  errors  under  generally  accepted
accounting  principles ("GAAP") in the United States relating to the recognition
of revenue. We determined that a single customer of our solar equipment business
unit  was  provided  certain  upgrade  rights  in  connection  with  the sale of
products,  as a result of which the revenue  associated  with those sales should
not have been  recognized  upon shipment of the products to the customers  under
GAAP because the upgrade was not  available  at that time.  We  determined  that
revenue for the entire  contract should have been deferred until the upgrade was
provided to the customer.  These orders  resulted in aggregate gross revenues of
approximately $1.4 million during the fourth quarter of 2007 and $380,000 during
the first quarter of 2008.  To correct this error,  we reversed this revenue and
the associated cost of goods sold in each of those  quarters.  See Note 2 to the
unaudited condensed consolidated financial statements.

Results of Operations
---------------------

        The  following  table sets forth  certain  items as a percentage  of net
sales and revenues for the periods presented:

<TABLE><CAPTION>
                                                     Three Months Ended         Six Months Ended
                                                           June 30,                 June 30,
                                                    ---------------------     ---------------------
                                                      2008         2007         2008         2007
                                                                            As Restated
                                                    --------     --------     --------     --------
<S>                                                      <C>          <C>          <C>          <C>
     Net sales and revenues                              100%         100%         100%         100%
     Cost of sales and revenues                           68           87           71           85
                                                    --------     --------     --------     --------
         Gross margin                                     32           13           29           15
     Selling, general and administrative expenses         30           34           28           37
     Internal research and development expenses            1            1            1            1
                                                    --------     --------     --------     --------
         Income (loss) from operations                     1          (22)           0          (23)
     Other expense, net                                   (3)        --             (3)        --
                                                    --------     --------     --------     --------
         Net loss                                         (2%)        (22%)         (3%)        (23%)
                                                    ========     ========     ========     ========
</TABLE>

OVERALL

        Our total net sales and  revenues for the six months ended June 30, 2008
were  $31,423,000 as compared to  $15,576,000  for the six months ended June 30,
2007,  which  represents an increase of  $15,847,000  or 102%.  The increase was
primarily attributable to a $14,372,000 increase in solar sales and a $1,162,000
increase in optoelectronics sales.

SOLAR BUSINESS UNIT

        Sales in our solar  business unit  increased  168% during the six months
ended June 30, 2008 to  $22,940,000  as compared to $8,568,000 in the six months
ended June 30, 2007. The increase is the result of shipments of solar  equipment
reflecting the overall increase in activity in the solar power industry. We have
focused our sales and marketing efforts on establishing  ourselves as one of the
premier  suppliers of equipment to the solar power industry for the  manufacture
of photovoltaic power modules.

BIOMEDICAL BUSINESS UNIT

        Revenues of our  biomedical  business  unit  increased 6% during the six
months ended June 30, 2008 to  $5,666,000  as compared to  $5,353,000 in the six
months ended June 30, 2007. The increase  reflects  increased  revenues from our
research and development  contracts and orthopedics  coatings services offset by
reduced revenues from catheter products.

OPTOELECTRONICS BUSINESS UNIT

        Revenues  in  our   optoelectronics   business  unit  increased  70%  to
$2,817,000  during the six months ended June 30, 2008 as compared to  $1,655,000
in the six months ended June 30, 2007. The increase reflects an overall increase
in

                                       20
<PAGE>

optoelectronics  activities  attributable  to a shift in  product  mix to larger
scale  commercial  orders  compared with smaller sized research and  development
projects.

Three and Six Months Ended June 30, 2008  Compared to Three and Six Months Ended
----------------------------------------  --------------------------------------
June 30, 2007
-------------

NET SALES AND REVENUES

        The  following  table  categorizes  our net sales and  revenues  for the
periods presented:

<TABLE><CAPTION>
                                                            Three Months Ended
                                                                  June 30,                  Increase
                                                        ---------------------------   ---------------------
                                                            2008           2007            $           %
                                                        ------------   ------------   ------------   ------
<S>                                                     <C>            <C>            <C>               <C>
     Sales of goods                                     $ 13,510,000   $  6,100,000   $  7,410,000      121%
     Contract research, services and license revenues      3,375,000      2,479,000        896,000       36%
                                                        ------------   ------------   ------------
        Net sales and revenues                          $ 16,885,000   $  8,579,000   $  8,306,000       97%
                                                        ============   ============   ============
</TABLE>

        The 121%  increase in sales of goods for the three months ended June 30,
2008 as compared to the three months ended June 30, 2007 was primarily due to an
increase in solar equipment revenues, partially offset by a decrease in catheter
products sales. Solar equipment sales increased 150% in 2008 as compared to 2007
primarily due to an overall increase in solar power industry activity.  Sales of
catheters decreased approximately 20%.

        The 36% increase in contract research, services and license revenues for
the three  months ended June 30, 2008 as compared to the three months ended June
30,  2007 is  primarily  attributable  to an  increase  in  optoelectronics  and
research  and  development  activities,   partially  offset  by  a  decrease  in
orthopedics.   Revenue  from  our  optoelectronics  processing  services  (Spire
Semiconductor)  increased 77% in 2008 compared to 2007 as a result of an overall
increase in optoelectronics activities attributable to a shift in product mix to
larger  scale  commercial  orders  compared  with  smaller  sized  research  and
development  projects.  Revenues  from our research and  development  activities
increased  110% in 2008 as compared to 2007  primarily due to an increase in the
number and value of contracts  associated with funded research and  development.
Revenues from our orthopedic  activities  decreased slightly in 2008 as compared
to 2007.

        The following  table  categorizes the our net sales and revenues for the
periods presented:

<TABLE><CAPTION>
                                                             Six Months Ended
                                                                  June 30,                  Increase
                                                        ---------------------------   ---------------------
                                                            2008           2007            $             %
                                                         As Restated                        As Restated
                                                        ---------------------------------------------------
<S>                                                     <C>            <C>            <C>               <C>
     Sales of goods                                     $ 24,505,000   $ 10,439,000   $ 14,066,000      135%
     Contract research, services and license revenues      6,918,000      5,137,000      1,781,000       35%
                                                        ------------   ------------   ------------
        Net sales and revenues                          $ 31,423,000   $ 15,576,000   $ 15,847,000      102%
                                                        ============   ============   ============
</TABLE>

        The 135%  increase  in sales of goods for the six months  ended June 30,
2008 as compared to the six months ended June 30, 2007 was  primarily  due to an
increase in solar equipment revenues, partially offset by a decrease in catheter
products sales. Solar equipment sales increased 170% in 2008 as compared to 2007
primarily due to an overall increase in solar power industry activity.  Sales of
catheters decreased approximately 12%.

        The 35% increase in contract research, services and license revenues for
the six months  ended June 30, 2008 as compared to the six months ended June 30,
2007 is primarily  attributable to an increase in  orthopedics,  optoelectronics
services and research and development  activities.  Revenues from our orthopedic
activities  increased  4% in 2008 as  compared  to 2007.  Revenue  from  Spire's
optoelectronics  processing services (Spire Semiconductor) increased 70% in 2008
compared  to 2007 as a result of  increased  demand  for  Spire  Semiconductor's
services  and  commercial  production  runs of  products  from  its  development
efforts.  Revenues from our research and development activities increased 84% in
2008 as compared to 2007 primarily due to an increase in the number and value of
contracts associated with funded research and development.

COST OF SALES AND REVENUES

        The following  table  categorizes our cost of sales and revenues for the
periods  presented,  stated in dollars and as a percentage  of related sales and
revenues:

                                       21
<PAGE>

<TABLE><CAPTION>
                                              Three Months Ended June 30,                     Increase
                                      ----------------------------------------------    ---------------------
                                          2008         %           2007         %            $           %
                                      ------------   ------    ------------   ------    ------------   ------
<S>                                   <C>                <C>   <C>                <C>   <C>                <C>
Cost of goods sold                    $  9,068,000       67%   $  5,168,000       85%   $  3,900,000       75%
Cost of contract research, services
   and licenses                          2,342,000       69%      2,322,000       94%         20,000        1%
                                      ------------             ------------             ------------
   Net cost of sales and revenues     $ 11,410,000       68%   $  7,490,000       87%   $  3,920,000       52%
                                      ============             ============             ============
</TABLE>

        Cost of goods sold  increased  75% for the three  months  ended June 30,
2008 as compared to the three months ended June 30, 2007,  primarily as a result
of the 121%  increase in related  revenues.  As a percentage  of sales,  cost of
goods  sold was 67% of sales  of  goods in 2008 as  compared  to 85% of sales in
2007.  This  reduction in the  percentage of sales in 2008 is due to a favorable
product  mix with  improved  margins  along  with  better  utilization  of solar
manufacturing overhead.

        Cost of contract  research,  services and licenses  increased 1% for the
three  months ended June 30, 2008 as compared to the three months ended June 30,
2007,  primarily  as a  result  of the 36%  increase  in  related  revenues  and
increased costs at our optoelectronics facility (Spire Semiconductor) along with
increased costs of our contract research activities due to higher volumes.  Cost
of contract research, services and licenses as a percentage of revenue decreased
to 69% of revenues in 2008 from 94% in 2007,  primarily due to the absorption of
overhead costs improving margins in biomedical and optoelectronic services.

        Cost of sales and  revenues  also  includes  approximately  $50,000  and
$20,000 of  stock-based  compensation  for the three months ending June 30, 2008
and 2007, respectively.

        The following  table  categorizes our cost of sales and revenues for the
periods  presented,  stated in dollars and as a percentage  of related sales and
revenues:

<TABLE><CAPTION>
                                                Six Months Ended June 30,                     Increase
                                      ----------------------------------------------    ---------------------
                                          2008           %         2007           %          $             %
                                       As Restated                                           As Restated
                                      ----------------------------------------------    ---------------------
<S>                                   <C>                <C>   <C>                <C>   <C>               <C>
Cost of goods sold                    $ 17,562,000       72%   $  8,739,000       84%   $  8,823,000      101%
Cost of contract research, services
   and licenses                          4,716,000       68%      4,450,000       87%        266,000        6%
                                      ------------             ------------             ------------
    Net cost of sales and revenues    $ 22,278,000       71%   $ 13,189,000       85%   $  9,089,000       69%
                                      ============             ============             ============
</TABLE>

        The $ 8,823,000 (101%) increase in cost of goods sold for the six months
ended  June 30,  2008 as  compared  to the six months  ended  June 30,  2007 was
primarily  due to  increased  costs  within  our solar  equipment  product  line
corresponding  to the 170% increase in solar equipment sales. As a percentage of
sales,  cost of goods sold was 69% of sales of goods in 2008 as  compared to 84%
of sales in 2007.  This reduction in the percentage of sales in 2008 is due to a
favorable  product mix with improved  margins along with better  utilization  of
solar manufacturing overhead.

        Cost of contract research, services and licenses increased 6% in the six
months  ended June 30, 2008 as compared to the six months  ended June 30,  2007,
primarily  as a result of the 35%  increase in related  revenues  and  increased
costs at our optoelectronics facility (Spire Semiconductor) along with increased
costs  of our  contract  research  activities  due to  higher  volumes.  Cost of
contract research, services and licenses as a percentage of revenue decreased to
68% of revenues in 2008 from 87% in 2007,  primarily  due to the  absorption  of
overhead costs improving margins in biomedical and optoelectronic services.

        Cost of sales and  revenues  also  includes  approximately  $95,000  and
$27,000 of stock-based  compensation for the six months ending June 30, 2008 and
2007, respectively.

OPERATING EXPENSES

        The following table  categorizes our operating  expenses for the periods
presented, stated in dollars and as a percentage of total sales and revenues:

<TABLE><CAPTION>
                                                Three Months Ended June 30,                   Increase
                                      ----------------------------------------------    ---------------------
                                          2008         %           2007         %           $            %
                                      ------------   ------    ------------   ------    ------------   ------
<S>                                   <C>                <C>   <C>                <C>   <C>                <C>
Selling, general and administrative   $  4,997,000       30%   $  2,856,000       33%   $  2,141,000       75%
Internal research and development          171,000        1%         78,000        1%         93,000      119%
                                      ------------             ------------             ------------
   Operating expenses                 $  5,168,000       31%   $  2,934,000       34%   $  2,234,000       76%
                                      ============             ============             ============
</TABLE>
                                       22
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

        Selling,  general and administrative  expense increased 75% in the three
months  ended June 30, 2008 as compared to the three months ended June 30, 2007,
primarily  as a result of an increase  in  stock-based  compensation,  marketing
activities,  professional  services used by us and higher head count and related
employee  costs.  In addition,  commissions to our network of independent  sales
representatives  related to sales of solar  equipment  were up due to  increased
sales and revenues. Selling, general and administrative expense decreased to 30%
of sales and  revenues  in 2008 as compared to 33% in 2007.  The  reduction  was
primarily due to the absorption of overhead related costs by the 97% increase in
sales and revenues.

        Operating  expenses  includes  approximately  $163,000  and  $117,000 of
stock-based  compensation  for the three  months  ending June 30, 2008 and 2007,
respectively.

INTERNAL RESEARCH AND DEVELOPMENT

        Internal  research and development  expense  increased 119% in the three
months  ended June 30, 2008 as compared to the three months ended June 30, 2007,
primarily as a result of our cost sharing  contract with the National  Renewable
Energy Laboratory ("NREL") reducing 2007 costs. In addition, Spire Semiconductor
had higher head count and related employee costs for the period. As a percentage
of sales and  revenue,  however,  internal  research  and  development  expenses
remained at 1% for both periods.

        The  following  table  categorizes  the our  operating  expenses for the
periods  presented,  stated in dollars  and as a  percentage  of total sales and
revenues:

<TABLE><CAPTION>
                                                 Six Months Ended June 30,                    Increase
                                      ----------------------------------------------    ---------------------
                                          2008         %           2007         %            $           %
                                      ------------   ------    ------------   ------    ------------   ------
<S>                                   <C>                <C>   <C>                <C>   <C>                <C>
Selling, general and administrative   $  8,775,000       28%   $  5,864,000       38%   $  2,911,000       50%
Internal research and development          282,000        1%        123,000        1%        159,000      129%
                                      ------------             ------------             ------------
   Operating expenses                 $  9,057,000       29%   $  5,987,000       38%   $  3,070,000       51%
                                      ============             ============             ============
</TABLE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

        Selling,  general and  administrative  expense  increased 50% in the six
months  ended June 30, 2008 as compared to the six months  ended June 30,  2007,
primarily  as a result of an increase  in  stock-based  compensation,  marketing
activities,  professional  services used by us and higher head count and related
employee  costs.  In addition,  commissions to our network of independent  sales
representatives  related to sales of solar  equipment  were up due to  increased
sales and revenues. Selling, general and administrative expense decreased to 28%
of sales and  revenues  in 2008 as compared to 38% in 2007.  The  reduction  was
primarily due to the  absorption of overhead  related costs by the 104% increase
in sales and revenues.

        Operating  expenses  includes  approximately  $314,000  and  $181,000 of
stock-based  compensation  for the six  months  ending  June 30,  2008 and 2007,
respectively.

INTERNAL RESEARCH AND DEVELOPMENT

        Internal  research and  development  expense  increased  129% in the six
months  ended June 30, 2008 as compared to the six months  ended June 30,  2007,
primarily as a result of our cost sharing  contract  with the NREL reducing 2007
costs.  In  addition,  Spire  Semiconductor  had higher  head count and  related
employee  costs for the period.  As a percentage of sales and revenue,  however,
internal research and development expenses remained at 1% for both periods.

OTHER INCOME (EXPENSE), NET

        We earned  $2,000 and  $9,000 of  interest  income for the three  months
ended June 30, 2008 and 2007, respectively. The decreased interest income is due
to lower cash  balances  held by us during 2008  compared with 2007. We incurred
interest expense of $50,000 and $24,000 for the three months ended June 30, 2008
and 2007, respectively. The increased interest expense is due to higher interest
payments associated with the Equipment Credit Facility  outstanding with Silicon
Valley Bank compared  with 2007  interest  expenses  primarily  associated  with
interest incurred on capital leases  associated with the semiconductor  foundry.
We recorded a $234,000  loss on equity  investment  in joint venture with Gloria
Solar for

                                       23
<PAGE>

the three months ended June 30, 2008. Due to the conversion of U.S. dollars into
Japanese Yen, we lost approximately  $294,000 and $4,000 during the three months
ended June 30, 2008 and 2007, respectively.

        We earned  $11,000  and  $53,000 of  interest  income for the six months
ended June 30, 2008 and 2007, respectively. The decreased interest income is due
to lower cash  balances  held by us during 2008  compared with 2007. We incurred
interest  expense of $119,000 and $50,000 for the six months ended June 30, 2008
and 2007, respectively. The increased interest expense is due to higher interest
payments associated with the Equipment Credit Facility  outstanding with Silicon
Valley Bank compared  with 2007  interest  expenses  primarily  associated  with
interest incurred on capital leases  associated with the semiconductor  foundry.
We recorded a $364,000  loss on equity  investment  in joint venture with Gloria
Solar for the six months  ended June 30,  2008.  Due to the  conversion  of U.S.
dollars into Japanese Yen, we lost approximately $408,000 and $13,000 during the
six months ended June 30, 2008 and 2007, respectively.

INCOME TAXES

        We did not  record an income  tax  benefit  for the three and six months
ended June 30, 2008 and 2007. A valuation  allowance has been  provided  against
the current period tax benefit due to uncertainty  regarding the  realization of
the net operating loss in the future.

NET INCOME

        We reported a net loss for the three months ended June 30, 2008 and 2007
of approximately $269,000 and $1,864,000,  respectively.  The net loss decreased
approximately $1,595,000 primarily due to the increase in sales and revenues and
the improvement in gross margins.

        We  reported a net loss for the six months  ended June 30, 2008 and 2007
of approximately $792,000 and $3,611,000,  respectively.  The net loss decreased
approximately $2,819,000 primarily due to the increase in sales and revenues and
the improvement in gross margins.


Liquidity and Capital Resources
-------------------------------
<TABLE><CAPTION>
                                                                Increase/(Decrease)
                                   June 30,      December 31,  ----------------------
                                     2008           2007             $             %
                                                    As Restated
                                 ----------------------------------------------------
<S>                              <C>            <C>            <C>                 <C>
     Cash and cash equivalents   $  4,462,000   $  2,372,000   $  2,090,000        88%
     Working capital                1,716,000      2,587,000   $   (871,000)      (34%)
</TABLE>

        Cash and cash  equivalents  increased  due to cash provided by operating
activities, partially offset by cash used in investing and financing activities.
The  overall  reduction  in  working  capital is due to an  increase  in current
liabilities,  partially  offset by  operating  cash flow.  We have  historically
funded our operating cash requirements using operating cash flow,  proceeds from
the sale and  licensing  of  technology  and  proceeds  from the sale of  equity
securities.

        We had a $2,000,000  Loan Agreement with Citizens Bank of  Massachusetts
which  expired  on June  26,  2007.  On May 25,  2007,  we and our  wholly-owned
subsidiary, Spire Semiconductor, LLC, entered into a Loan and Security Agreement
(the "Equipment Credit  Facility") with Silicon Valley Bank (the "Bank").  Under
the Equipment Credit Facility, for a one-year period, we and Spire Semiconductor
could borrow up to  $3,500,000  in the  aggregate to finance  certain  equipment
purchases  (including  reimbursement  of  certain  previously-made   purchases).
Advances made under the  Equipment  Credit  Facility  would bear interest at the
Bank's  prime rate,  as  determined,  plus 0.5% and payable in  thirty-six  (36)
consecutive monthly payments following the funding date of that advance.

        On March 31, 2008, we entered into a second Loan and Security  Agreement
(the  "Revolving  Credit  Facility")  with  the  Bank.  Under  the  terms of the
Revolving Credit  Facility,  the Bank agreed to provide us with a credit line up
to $5,000,000.  Our obligations  under the Equipment Credit Facility are secured
by  substantially  all of our assets and  advances  under the  Revolving  Credit
Facility are limited to 80% of eligible receivables and the lesser of 25% of the
value of our eligible  inventory,  as defined, or $2,500,000 if the inventory is
backed by a  customer  letter of  credit.  Interest  on  outstanding  borrowings
accrues at a rate per annum  equal to the greater of Prime Rate plus one percent
(1.0%)  or seven  percent  (7%).  In  addition,  we  agreed to pay to the Bank a
collateral  monitoring  fee of $750 per month in the event we are in  default of
our  covenants  and  agreed  to the  following  additional  terms:  (i)  $50,000
commitment  fee; (ii) an unused line fee in the amount of 0.75% per annum of the
average unused portion of the revolving line; and (iii) an early termination fee
of 0.5% of the total credit line if we terminate the Revolving  Credit  Facility
prior to 12 months from the Revolving  Credit  Facility's  effective  date.  The
Revolving  Credit  Facility,  if not sooner  terminated in  accordance  with its
terms,  expires  on March  30,  2009.  In

                                       24
<PAGE>

addition, on March 31 our existing Equipment Credit Facility was amended whereby
the Bank granted a waiver for our defaults for not meeting our December 31, 2007
quarter  liquidity  and profit  covenants  and for not  meeting  our January and
February 2008 liquidity covenants.  Further, the covenants were amended to match
the covenants as discussed below contained in the Revolving Credit Facility. Our
interest  rate under the Equipment  Credit  Facility was also modified from Bank
Prime plus one half  percent to the greater of Bank Prime plus one percent  (1%)
or seven percent (7%).

        On May 13, 2008, the Bank amended the Equipment  Credit Facility and the
Revolving  Credit  Facility,  modifying  our net income  profitability  covenant
requirements in exchange for a three quarters  percent  (0.75%)  increase in our
interest rate (7.75% at June 30, 2008) and waiver restructuring fee equal to one
half percent (0.5%) of amounts  outstanding  under the Equipment Credit Facility
and  committed  under the Revolving  Credit  Facility.  Interest on  outstanding
borrowings  accrues at a rate per annum  equal to the greater of Prime Rate plus
one percent  (1.0%) or seven percent  (7%).  In addition,  our term loan balance
will be factored in when  calculating  our  borrowing  base under the  Revolving
Credit Facility.

        Under  the  amended  terms  of both  credit  facilities,  as long as any
commitment  remains  outstanding  under the  facilities,  we must comply with an
adjusted  quick ratio  covenant and a minimum  monthly net income  covenant.  In
addition,  until all  amounts  under  the  credit  facilities  with the Bank are
repaid, covenants under the credit facilities impose restrictions on our ability
to, among other things, incur additional indebtedness, create or permit liens on
our assets, merge,  consolidate or dispose of assets (other than in the ordinary
course of business),  make dividend and other restricted payments,  make certain
debt or  equity  investments,  make  certain  acquisitions,  engage  in  certain
transactions  with  affiliates  or change the  business  conducted by us and our
subsidiaries.  Any failure by us to comply with the  covenants  and  obligations
under the credit  facilities could result in an event of default,  in which case
the Bank may be  entitled  to declare  all  amounts  owed to be due and  payable
immediately.  Our  obligations  under  the  credit  facilities  are  secured  by
substantially all of our assets.

        At June 30,  2008,  we had  outstanding  borrowings  from the  Equipment
Credit  Facility  amounting to $2,333,000 and there were no borrowings  from the
Revolving Credit  Facility.  We were in compliance with our covenants as of June
30, 2008.

           We maintain  allowances  for doubtful  accounts for estimated  losses
resulting  from the  inability of our  customers to pay amounts due. We actively
pursues  collection  of  past  due  receivables  as the  circumstances  warrant.
Customers are contacted to determine the status of payment and senior accounting
and operations  management are included in these efforts as is deemed necessary.
A specific reserve will be established for past due accounts when it is probable
that a loss has been incurred and we can  reasonably  estimate the amount of the
loss.  We do not record an allowance  for  government  receivables  and invoices
backed by letters of credit as  realizability is reasonably  assured.  Bad debts
are  written  off  against the  allowance  when  identified.  There is no dollar
threshold  for  account  balance  write-offs.  While rare,  a write-off  is only
recorded when all efforts to collect the receivable have been exhausted and only
in consultation with the appropriate business line manager.

        There are no material  commitments  by us for capital  expenditures.  At
June 30, 2008, our accumulated deficit was approximately  $12,481,000,  compared
to accumulated deficit of approximately $11,689,000 as of December 31, 2007.

        We have an  effective  shelf  registration  statement  on file  with the
Securities  and  Exchange  Commission  allowing  us to sell up to $60 million of
common stock. We believe it is prudent to maintain shelf  registration  capacity
in order to facilitate  future capital  raising  activities.  To date there have
been no issuances of common stock under this shelf registration statement.

        We  believe  we  have  sufficient   resources  to  finance  our  current
operations  for the  foreseeable  future  from  operating  cash flow and working
capital. We may, however, raise additional capital through the sale of equity or
equity-related securities,  under the shelf registration statement or otherwise,
under appropriate circumstances.

Foreign Currency Fluctuation
----------------------------

        We sell only in U.S. dollars, generally against an irrevocable confirmed
letter of credit  through a major United  States bank.  Accordingly,  we are not
directly  affected  by foreign  exchange  fluctuations  on our  current  orders.
However,  fluctuations  in  foreign  exchange  rates  do have an  effect  on our
customers'  access to U.S.  dollars  and on the pricing  competition  on certain
pieces of equipment that we sell in selected  markets.  We received Japanese yen
in  exchange  for the sale of a license to our solar  technology.  In  addition,
purchases made and royalties  received  under our Consortium  Agreement with our
Japanese  partner are in Japanese  yen. We have  committed  to purchase  certain
pieces of equipment from European vendors;  these commitments are denominated in
Euros. We bear the risk of any currency fluctuations that may be associated with
these  commitments.  We attempt to hedge when  possible  known  transactions  to
minimize foreign exchange risk.

                                       25
<PAGE>

Related Party Transactions
--------------------------

        We  subleased  77,000  square-feet  in a  building  leased  by  Mykrolis
Corporation,  who in turn leased the building from  SPI-Trust,  a Trust of which
Roger Little,  our Chairman of the Board, Chief Executive Officer and President,
is the sole trustee and principal beneficiary. The 1985 sublease, originally was
for a period of ten years,  was  extended  for a  five-year  period  expiring on
November 30, 2000 and was further  extended for a five-year  period  expiring on
November 30, 2005. The sublease  agreement  provided for minimum rental payments
plus annual increases linked to the consumer price index.  Effective December 1,
2005,  we entered  into a two-year  Extension  of Lease  Agreement  (the  "Lease
Extension") directly with SPI-Trust.

           We assumed certain responsibilities of Mykrolis, the tenant under the
former  lease,  as a result  of the Lease  Extension  including  payment  of all
building and real estate related expenses associated with the ongoing operations
of the property. We will allocate a portion of these expenses to SPI-Trust based
on  pre-established  formulas  utilizing  square  footage and actual usage where
applicable.  These  allocated  expenses  will be  invoiced  monthly  and be paid
utilizing a SPI-Trust escrow account of which we have sole withdrawal authority.
SPI-Trust is required to maintain three (3) months of its anticipated  operating
costs within this escrow account.  On December 1, 2006, we and SPI-Trust amended
the Lease  Extension to include the lease of an  additional  15,000  square feet
from SPI-Trust for a one-year term. The additional space was leased at a rate of
$8.06 per square foot on annual basis.  The additional  space was used to expand
our solar operations.

        On November 30, 2007,  we entered into a new Lease  Agreement  (the "New
Lease") with SPI-Trust,  with respect to 144,230 square feet of space comprising
the entire  building in which we have occupied space since December 1, 1985. The
term of the New Lease  commenced on December 1, 2007 and  continues for five (5)
years until  November 30, 2012.  We have the right to extend the term of the New
Lease for an  additional  five (5) year period.  The annual  rental rate for the
first year of the Lease is $12.50 per square foot on a triple net basis, whereby
the tenant is responsible for operating  expenses,  taxes and maintenance of the
building.  The annual  rental rate  increases on each  anniversary  by $0.75 per
square foot. If we exercises our right to extend the term of the New Lease,  the
annual  rental rate for the first year of the extended  term will be the greater
of (a) the rental rate in effect  immediately  preceding the commencement of the
extended term or (b) the market rate at such time,  and on each  anniversary  of
the commencement of the extended term the rental rate will increase by $0.75 per
square  foot.  We  believe  that the  terms of the New  Lease  are  commercially
reasonable.  Rent expense under the New Lease for the three and six months ended
June 30, 2008 was $505,000 and $1,010,000, respectively.

        In conjunction with our acquisition of Spire  Semiconductor in May 2003,
SPI-Trust purchased from Stratos Lightwave,  Inc. (Spire  Semiconductor's former
owner) the building that Spire  Semiconductor  occupies in Hudson, New Hampshire
for $3.7 million. Subsequently, we entered into a lease for the building (90,000
square  feet)  with  SPI-Trust  whereby  we  agreed to pay $4.1  million  to the
SPI-Trust over an initial five-year term expiring in May 2008 with an option for
us to  extend  for five  years.  In  addition  to the rent  payments,  the lease
obligates us to keep on deposit with  SPI-Trust  the  equivalent of three months
rent ($304,000 as of June 30, 2008.) The lease  agreement does not provide for a
transfer of ownership at any point.  Interest costs were assumed at 7%. Interest
expense was approximately  $1,600 for the three months ended June 30, 2008. This
lease has been  classified  as a related  party  capital  lease and a summary of
payments (including interest) follows:

<TABLE><CAPTION>
                                           Rate Per                                      Security
                   Year                   Square Foot    Annual Rent     Monthly Rent     Deposit
        ---------------------------       -----------    -----------     ------------     --------
<S>     <C>                               <C>            <C>             <C>              <C>
        June 1, 2003 - May 31, 2004           $6.00       $ 540,000       $ 45,000        $135,000
        June 1, 2004 - May 31, 2005            7.50         675,000         56,250         168,750
        June 1, 2005 - May 31, 2006            8.50         765,000         63,750         191,250
        June 1, 2006 - May 31, 2007           10.50         945,000         78,750         236,250
        June 1, 2007 - May 31, 2008           13.50       1,215,000        101,250         303,750
                                                         ----------
                                                         $4,140,000
                                                         ==========
</TABLE>

        Upon the  expiration  of the lease in May 2008,  we did not exercise our
option to extend the lease for an additional 5 years. On May 20, 2008, we agreed
with  SPI-Trust  to continue  the  current  lease,  under the current  terms and
conditions  on a  month-to-month  basis for a maximum of three (3) months beyond
the current term, up to August 23, 2008.

Critical Accounting Policies
----------------------------

           The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires us to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  Among the significant  estimates  affecting our consolidated
financial  statements

                                       26
<PAGE>

are those relating to revenue  recognition,  reserves for doubtful  accounts and
sales  returns  and  allowances,  reserve  for  excess and  obsolete  inventory,
impairment  of  long-lived  assets,  income  taxes,  and warranty  reserves.  We
regularly   evaluate  our  estimates  and  assumptions   based  upon  historical
experience and various other factors that it believes to be reasonable under the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  To the extent actual results  differ from those  estimates,  our
future results of operations may be affected.  We believe the following critical
accounting policies affect our more significant  judgments and estimates used in
the preparation of our consolidated financial statements. Refer to Footnote 3 of
the notes to  consolidated  financial  statements  in our Annual  Report on Form
10-K/A for the year ended December 31, 2007 for a description of our significant
accounting policies.

REVENUE RECOGNITION

           We derive our revenues from three  primary  sources:  (1)  commercial
products including,  but not limited to, solar energy  manufacturing  equipment,
solar  energy   systems  and   hemodialysis   catheters;   (2)   biomedical  and
semiconductor  processing  services;  and (3) United  States  government  funded
research and development contracts.

           We generally  recognizes  product  revenue upon  shipment of products
provided there are no uncertainties  regarding customer  acceptance,  persuasive
evidence of an arrangement exists, the sales price is fixed or determinable, and
collectibility  is reasonably  assured.  These criteria are generally met at the
time of  shipment  when the risk of loss and  title  passes to the  customer  or
distributor,  unless a consignment  arrangement exists. Revenue from consignment
arrangements is recognized based on product usage indicating sales are complete.

           We utilize a distributor  network to market and sell our hemodialysis
catheters  domestically.  We generally recognizes revenue when the catheters are
shipped to our  distributors.  Gross sales reflect  reductions  attributable  to
customer  returns and various  customer  incentive  programs  including  pricing
discounts and rebates.  Product returns are permitted in certain sales contracts
and an allowance is recorded for returns based on our history of actual returns.
Certain customer  incentive  programs require management to estimate the cost of
those  programs.  The  allowance  for these  programs is  determined  through an
analysis of programs offered, historical trends, expectations regarding customer
and  consumer  participation,  sales and payment  trends,  and  experience  with
payment  patterns  associated  with similar  programs  that had been  previously
offered.  An  analysis  of the sales  return and rebate  activity  for the three
months ended June 30, 2008, is as follows:

                                     Rebates          Returns         Total
                                   ------------    ------------    ------------
        Balance - March 31, 2008   $     86,000    $     10,000    $     96,000
           Provision                    123,000           8,000         131,000
           Utilization                 (113,000)         (9,000)       (122,000)
                                   ------------    ------------    ------------
        Balance - June 30, 2008    $     96,000    $      9,000    $    105,000
                                   ============    ============    ============

        o Credits for rebates are recorded in the month of the actual sale.
        o Credits for returns are processed when we receive the actual returned
          merchandise.
        o Substantially all rebates and returns are processed no later than
          three months after our original shipment.

        The reserve  percentage of inventory held by distributors  over the past
quarters has increased to approximately 10.5% at June 30, 2008, when compared to
8% at December 31, 2007. We perform  various  sensitivity  analyses to determine
the appropriate  reserve  percentage to use. To date,  actual quarterly  reserve
utilization has approximated  the amount  provided.  The total inventory held by
distributors was approximately $912,000 at June 30, 2008.

        If  sufficient  history to make  reasonable  and  reliable  estimates of
returns or rebates does not exist,  revenue  associated  with such  practices is
deferred  until the return period  lapses or a reasonable  estimate can be made.
This deferred revenue will be recognized as revenue when the distributor reports
to us that it has either shipped or disposed of the units  (indicating  that the
possibility of return is remote).

        Our  OEM  capital   equipment   solar  energy  business  builds  complex
customized  machines to order for specific  customers.  Most of these orders are
sold on a FOB Bedford,  Massachusetts  (or EX-Works  Factory)  basis.  It is our
policy to recognize revenues for this equipment as the product is shipped to the
customer, as customer acceptance is obtained prior to shipment and the equipment
is expected to operate the same in the customer's  environment as it does in our
environment.  When an arrangement with the customer includes future  obligations
or customer acceptance,  revenue is recognized when those obligations are met or
customer acceptance has been achieved.  For arrangements with multiple elements,
we allocate fair value to each element in the contract and revenue is recognized
upon  delivery of each  element.  If we are not able to

                                       27
<PAGE>

establish fair value of undelivered elements, all revenue is deferred.

        We recognize  revenues  and  estimated  profits on long-term  government
contracts  on the  accrual  basis  where the  circumstances  are such that total
profit can be estimated  with  reasonable  accuracy and ultimate  realization is
reasonably  assured.  We accrue  revenue and profit  utilizing the percentage of
completion method using a cost-to-cost methodology. A percentage of the contract
revenues  and  estimated  profits  is  determined  utilizing  the ratio of costs
incurred to date to total  estimated  cost to complete on a contract by contract
basis.  Profit estimates are revised  periodically based upon changes and facts,
and any losses on contracts are  recognized  immediately.  Some of the contracts
include  provisions  to withhold a portion of the  contract  value as  retainage
until such time as the United  States  government  performs an audit of the cost
incurred  under the contract.  Our policy is to take into revenue the full value
of the contract,  including any  retainage,  as we perform  against the contract
because we have not  experienced  any  substantial  losses as a result of audits
performed by the United States government.

IMPAIRMENT OF LONG-LIVED ASSETS

        Long-lived  assets,  including fixed assets and intangible  assets,  are
continually  monitored and are evaluated at least annually for  impairment.  The
determination  of  recoverability  is based on an estimate of undiscounted  cash
flows expected to result from the use of an asset and its eventual  disposition.
The  estimate  of  cash  flows  is  based  upon,  among  other  things,  certain
assumptions  about  expected  future  operating  performance.  Our  estimates of
undiscounted  cash flows may differ from  actual cash flows due to,  among other
things,  technological  changes,  economic  conditions,  changes to our business
model or changes in our operating  performance.  If the sum of the  undiscounted
cash flows (excluding interest) is less than the carrying value, we recognize an
impairment loss,  measured as the amount by which the carrying value exceeds the
fair value of the asset.

STOCK-BASED COMPENSATION

        On January 1, 2006, we adopted the fair value recognition  provisions of
Financial Accounting Standards Board ("FASB") Statement No. 123(R),  Share-Based
Payment  ("Statement   123(R)")  using  the  modified   prospective  method.  In
accordance  with the  modified  prospective  method,  we have not  restated  our
consolidated  financial  statements  for prior  periods.  Under this  transition
method,  stock-based  compensation  expense  includes  stock-based  compensation
expense for all of our stock-based compensation awards granted prior to, but not
yet vested as of, January 1, 2006,  based on the grant-date fair value estimated
in accordance  with the  provisions of FASB  Statement No. 123,  Accounting  for
Stock-Based Compensation ("Statement 123"). Stock-based compensation expense for
all stock-based compensation awards granted on or after January 1, 2006 is based
on the  grant-date  fair value  estimated in accordance  with the  provisions of
Statement  123(R).  The impact of Statement  123(R) on our results of operations
resulted in recognition of stock option  expense of  approximately  $213,000 and
$137,000 for the three months ended June 30, 2008 and 2007, respectively.  Stock
option  expense was $409,000 and $208,000 for the six months ended June 30, 2008
and 2007, respectively.

Contractual Obligations, Commercial Commitments and Off-Balance Sheet
---------------------------------------------------------------------
Arrangements
------------

The following  table  summarizes our gross  contractual  obligations at June 30,
2008 and the maturity  periods and the effect that such obligations are expected
to have on our liquidity and cash flows in future periods:

<TABLE><CAPTION>
                                                              Payments Due by Period
                                     ------------------------------------------------------------------------
                                                     Less than        2 - 3          4 - 5        More Than
     Contractual Obligations            Total          1 Year         Years          Years         5 Years
----------------------------------   ------------   ------------   ------------   ------------   ------------
<S>                                  <C>            <C>            <C>            <C>            <C>
Equipment Credit Facility (SVB)      $  2,524,000   $  1,308,000   $  1,216,000           --             --

Revolving Credit Facility (SVB)              --             --             --             --             --

Purchase obligations                 $ 15,249,000   $ 14,968,000   $    281,000           --             --

Capital leases:
  Related party capital lease                --             --             --             --             --

Operating leases:
  Unrelated party operating leases   $    314,000   $    135,000   $    179,000           --             --
  Related party operating lease      $  9,044,000   $  1,866,000   $  4,056,000   $  3,122,000           --
</TABLE>

                                       28
<PAGE>

        Purchase  obligations  include  all  open  purchase  orders  outstanding
regardless  of  whether  they  are  cancelable  or  not.  Included  in  purchase
obligations are raw material and equipment needed to fulfill customer orders.

        Capital lease and Credit  Facility  obligations  outlined  above include
both the principal and interest components of these contractual obligations.

        Total  foreign  exchange  loss for the  quarter  ended June 30,  2008 of
approximately  $294,000  is  reflected  in other  income  (expense),  net in the
accompanying unaudited condensed consolidated statement of operations.

        Outstanding letters of credit totaled approximately $250,000 at June 30,
2008. The letters of credit  principally  secure  performance  obligations,  and
allow  holders to draw funds up to the face amount of the letter of credit if we
do not perform as contractually required. These letters of credit expire through
2008 and are 100% secured by cash.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Market risk to which we are subject consists of the risk of loss arising
from  adverse  changes in market  interest  rates and  foreign  exchange  rates.
Exposure  to market  rate risk for  changes  in  interest  rates  relates to our
investment  portfolio.  We have not used derivative financial instruments in our
investment portfolio. We seek to place our investments with high-quality issuers
and we have policies limiting, among other things, the amount of credit exposure
to  any  one  issuer.   We  seek  to  limit  default  risk  by  purchasing  only
investment-grade  securities. We do not believe we have any material market risk
with respect to our financial instruments.

ITEM 4T.   CONTROLS AND PROCEDURES

Restatement of Consolidated Financial Statements
------------------------------------------------

        In November 2008, we detected a side  arrangement of which its existence
was not taken into  account  when we  recognized  revenue  on the  multi-element
contract. The identified contract was partially recognized in the fourth quarter
of  2007  and  partially  in the  first  quarter  of  2008  under  multi-element
arrangement  accounting  rules.  As we could not establish the fair value of the
undelivered elements given under the side arrangement, we incorrectly recognized
the revenue rather than deferring all revenue until all elements were delivered.

        Under the direction of the Audit  Committee  and with the  assistance of
the Chief Operating  Officer,  the Company's Chief Financial Officer conducted a
review of the solar equipment contracting process and order management activity,
including a review of contract  modifications.  Sales personnel and key managers
in the  solar  equipment  department  who are  involved  with the  execution  of
contracts were interviewed with respect to the knowledge of internal  procedures
on  customer  requests  for  concessions  as  well  as  their  knowledge  of any
previously  granted customer  concessions or  modifications.  Additionally,  the
Company  contacted  a  large  sample  of  external   customers  to  confirm  the
completeness of deliverables as called for by the written  contract or any other
means of  communications.  The review revealed that, except for the one contract
in question,  all customer  concessions  and  modifications  were  conveyed on a
timely  basis and revenue was  appropriately  recorded in all other cases during
the period under review.

        The error that caused the improper recognition of revenue was not timely
identified  by our  procedures  and  controls  in place and $1.735  million  was
incorrectly  recognized as goods revenue,  resulting in a material overstatement
of goods  revenue  for the  fourth  quarter  of  fiscal  year 2007 and the first
quarter of 2008.  On November  18,  2008,  the Audit  Committee  of the Board of
Directors, in consultation with and upon recommendation of management, concluded
that due to the error in accounting  for goods revenue,  our  previously  issued
financial  statements  for the fourth  quarter and fiscal  2007  included in the
Annual  Report on Form 10-K for the fiscal year ended  December 31, 2007 and our
previously issued financial statements included in the Quarterly Reports on Form
10-Q for the fiscal  quarters  ended  March 31, 2008 and June 30, 2008 should no
longer be relied  upon and  should be  restated.  Please  refer to Note 2 of the
notes to the  consolidated  financial  statements  for a  quantification  of the
restatement.

Evaluation of Disclosure Controls and Procedures
------------------------------------------------

        Our management,  under the supervision of and with the  participation of
the Chief Executive Officer and Chief Financial Officer, performed an evaluation
of the  effectiveness  of our disclosure  controls and procedures (as defined in
Rules 13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange Act"))
as of the end of the period covered by this report, June 30, 2008.

                                       29
<PAGE>

        Based on its  evaluation,  and taking into  consideration  the  material
weaknesses in internal control over financial  reporting  referenced  below, our
management,  including the Chief Executive Officer and Chief Financial  Officer,
concluded that our disclosure  controls and procedures  were not effective as of
June 30, 2008.

        As previously  reported in our Annual Report on Form 10-K, as filed with
the  Securities and Exchange  Commission  (SEC) on March 31, 2008, in connection
with our assessment of the  effectiveness of our internal control over financial
reporting at the end of our last fiscal  year,  management  identified  material
weaknesses in the internal  control over financial  reporting as of December 31,
2007.

        We had an  ineffective  control  environment.  This has been  previously
disclosed in prior filings. Efforts to remediate deficiencies were impeded by an
evolving control  environment  brought on by the rapid expansion in our business
over  the  past  twelve  months.  We did not  maintain  an  effective  financial
reporting process, ensure timely and accurate completion of financial statements
and we did not maintain effective monitoring controls including  reconciliations
and analysis of key  accounts.  We did not have a  sufficient  level of staffing
with the necessary knowledge, experience and training to ensure the completeness
and accuracy of our financial statements.  Specifically, the financial reporting
organization  structure  was not  adequate  to support the size,  complexity  or
activities of our Company.

        This affected our ability to maintain effective  monitoring controls and
related segregation of duties over automated and manual transactions  processes.
Specifically,  inadequate  segregation of duties led to untimely  identification
and  resolution  of  accounting  and  disclosure  matters and failure to perform
timely and  effective  supervision  and reviews.  We did not maintain  effective
controls over our IT environment.  Specifically,  we did not perform a review of
restricted  user  access in our  application  software  system  and file  server
critical worksheet  directories.  We lacked sufficient  business  continuity and
back-up polices and procedures.

        In addition  to the  material  weaknesses  discussed  above,  we did not
maintain  effective  controls to identify  and  monitor  the  existence  of side
agreements.  In November 2008 we became aware of a preexisting undocumented side
agreement  made  in  connection  with a  multiple  element  arrangement.  Timely
notification of the existence of the oral agreement was not  communicated to the
Finance  Department,  and  therefore  the  impact  of  such  agreement  was  not
considered  in the  evaluation  of revenue  recognition  on the  contract.  As a
result, our recognition of revenue was materially  misstated with respect to the
fourth quarter of 2007 and the first quarter of 2008 which required  restatement
of previously issued financial statements.

        In  connection   with  the  findings  of  our  review   related  to  the
restatement, management and the Audit Committee reviewed the additional internal
control  procedures and processes that have been implemented  since the original
date of the error and have  identified  additional  remediation  to address  the
material weakness of untimely reporting of customer contract changes. We will be
implementing new internal controls and enhanced accounting policies,  as well as
improved sales policies and procedures  relating to customer contract management
and order  fulfillment.  In addition,  we have begun to strengthen our financial
reporting  competencies,  develop  internal  controls  and  compliance  training
programs directed towards contract management, implement personnel changes where
necessary and establish  corporate  policies,  practices and controls  which are
clear, concise and consistent.

        As a result of the  foregoing,  management  concluded  that our internal
control over financial reporting was not effective as of December 31, 2007.

Changes in Internal Control Over Financial Reporting
----------------------------------------------------

        Except as described below,  there have been no changes during our fiscal
quarter  ended June 30, 2008 in our internal  control over  financial  reporting
that may have  materially  affected,  or are  reasonably  likely  to  materially
affect, our internal control over financial reporting.

        Management is actively  addressing the above noted  material  weaknesses
and other operational,  financial and internal control  remediation  efforts are
also  underway.  New  policies  and  procedures  are being  created and existing
policies and  procedures  are being reviewed and will be modified as part of our
documentation  and  testing  of  internal  control  over  financial   reporting.
Management  believes these new internal  control  policies and procedures,  when
fully implemented, along with the training of key personnel and testing of these
key controls will be effective in  remediating  these  material  weaknesses.  In
February  2008,  we hired a Director of  Financial  Reporting  who will have the
primary  responsibility  for the financial  close and reporting  process and our
internal control and monitoring  environment related to financial reporting.  In
July 2008, we hired a Senior Financial Analyst, who will be actively involved in
the financial  close and reporting  process and assisting us in our  remediation
efforts.  We have  implemented  new IT policies  and  inventory  procedures  and
progress was made in addressing the controls over IT and Inventory.

                                       30
<PAGE>

        Further,  the we have  hired an  outside  consulting  firm to finish our
Sarbanes-Oxley  efforts  started  in  2007.  As  a  non-accelerated  filer,  our
management  will perform an  evaluation of our internal  control over  financial
reporting at the end of the year;  however,  our independent  registered  public
accounting  firm  is  not  required  to  issue  an  opinion  on  the  design  or
effectiveness  on our internal  control over  financial  reporting  for the 2008
fiscal year.





























                                       31
<PAGE>

PART II

                                OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

        During  the   second   quarter  of  2005  a  suit  was  filed  by  Arrow
International, Inc. against Spire Biomedical, Inc., our wholly owned subsidiary,
alleging patent  infringement  by us. The complaint  claimed one of our catheter
products  induced and  contributed to  infringement  when medical  professionals
inserted it. We responded to the  complaint  denying all  allegations  and filed
certain  counterclaims.  We also filed a motion for summary judgment,  asserting
patent   invalidity   resulting   from   plaintiff's   failure   to  follow  the
administrative  procedures of the U.S. Patent and Trademark Office ("USPTO"). On
August 4, 2006, the Court granted our motion and dismissed this lawsuit  without
prejudice. Plaintiffs applied to revive the applicable patent, which application
was  granted  by the USPTO in August  2006.  Plaintiffs  refiled  their  lawsuit
against us in September  2006. We have filed our answer and resumed our defense.
We have filed summary  judgment motions with the Court and a hearing date on the
motions has been set for the late fall of 2008.  Based on information  presently
available to us, we believe we have  meritorious  legal defenses with respect to
this action.  If we are  unsuccessful in our defenses,  a portion of our product
line may be enjoined or we may need to redesign certain products to avoid future
infringement.  However,  if the plaintiff's patent is found valid and infringed,
the parties have already agreed to a stipulated  calculation of damages based on
a pre-specified royalty rate.

ITEM 1A.  RISK FACTORS

        There have been no material  changes in the Risk  Factors  described  in
Part I, Item 1A ("Risk  Factors") of our Annual Report on Form 10-K for the year
ended December 31, 2007.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           On May 22, 2008, we held a Special  Meeting in Lieu of Annual Meeting
of Stockholders. At the meeting, stockholders voted on the following:

PROPOSAL NUMBER 1

        The number of directors  was fixed at eight,  leaving one  vacancy.  Udo
Henseler,  David R.  Lipinski,  Mark C.  Little,  Roger G.  Little,  Michael  J.
Magliochetti,  Guy L. Mayer and Roger W.  Redmond  were  elected to the Board of
Directors to hold office until the 2009 annual meeting of the stockholders.  The
results for Proposal Number 1 were as follows:

<TABLE><CAPTION>
----------------------------------- ------------ -------------------------- ------------ -----------
                                       Shares     Shares Voting Against or     Shares       Broker
             Nominee                 Voting For      Authority Withheld      Abstaining   Non-Votes
----------------------------------- ------------ -------------------------- ------------ -----------
<S>                                   <C>                  <C>              <C>                  <C>
Udo Henseler                          6,893,524            235,492               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
David R. Lipinski                     6,238,583            890,433               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
Mark C. Little                        6,227,827            901,189               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
Roger G. Little                       6,240,954            888,062               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
Michael J. Magliochetti               6,897,578            231,438               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
Guy L. Mayer                          6,897,393            231,623               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
Roger W. Redmond                      6,894,193            234,823               --            --
----------------------------------- ------------ -------------------------- ------------ -----------
</TABLE>

ITEM 5.     OTHER INFORMATION

        None


                                       32
<PAGE>

ITEM 6.     EXHIBITS

        10(ac)    Second Loan Modification Agreement, dated May 13, 2008, to the
                  Loan and Security  Agreement,  dated May 25, 2007, among Spire
                  Corporation,  Bandwidth Semiconductor,  LLC and Silicon Valley
                  Bank,  incorporated  by reference to the  Company's  Form 10-Q
                  dated  June  30,  2008  with  the   Securities   and  Exchange
                  Commission filed on August 13, 2008.

        10(ad)    Waiver and First Loan  Modification  Agreement,  dated May 13,
                  2008,  to Loan and Security  Agreement,  dated March 31, 2008,
                  among Spire Corporation,  Spire Solar, Inc., Spire Biomedical,
                  Inc.,  Spire  Semiconductor,  LLC  and  Silicon  Valley  Bank,
                  incorporated  by  reference to the  Company's  Form 10-Q dated
                  June 30,  2008 with the  Securities  and  Exchange  Commission
                  filed on August 13, 2008.

        31.1      Certification  of the Chairman of the Board,  Chief  Executive
                  Officer and President pursuant to ss.302 of the Sarbanes-Oxley
                  Act of 2002.

        31.2      Certification  of the Chief  Financial  Officer and  Treasurer
                  pursuant to ss.302 of the Sarbanes-Oxley Act of 2002.

        32.1      Certification  of the Chairman of the Board,  Chief  Executive
                  Officer  and  President  pursuant  to 18  U.S.C.  ss.1350,  as
                  adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002.

        32.2      Certification  of the Chief  Financial  Officer and  Treasurer
                  pursuant to 18 U.S.C.  ss.1350,  as adopted pursuant to ss.906
                  of the Sarbanes-Oxley Act of 2002.





                                       33
<PAGE>

                                   SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                       Spire Corporation

Dated:     November 24, 2008           By:   /s/ Roger G. Little
                                           -------------------------------------
                                           Roger G. Little
                                           Chairman of the Board, Chief
                                           Executive Officer and President

Dated:     November 24, 2008           By:  /s/ Christian Dufresne
                                           -------------------------------------
                                           Christian Dufresne, Ph. D.
                                           Chief Financial Officer and Treasurer















                                       34
<PAGE>

                                  EXHIBIT INDEX


Exhibit                            Description
-------                            -----------

31.1         Certification of the Chairman of the Board, Chief Executive Officer
             and President pursuant to ss.302 of the Sarbanes-Oxley Act of 2002.

31.2         Certification of the Chief Financial Officer and Treasurer pursuant
             to ss.302 of the Sarbanes-Oxley Act of 2002

32.1         Certification of the Chairman of the Board, Chief Executive Officer
             and President pursuant to 18 U.S.C. ss.1350, as adopted pursuant to
             ss.906 of the Sarbanes-Oxley Act of 2002.

32.2         Certification of the Chief Financial Officer and Treasurer pursuant
             to 18  U.S.C.  ss.1350,  as  adopted  pursuant  to  ss.906  of  the
             Sarbanes-Oxley Act of 2002.























                                       35