**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**









**FORM 10-QSB**




x
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF
                1934**




**FOR
                THE QUARTERLY PERIOD ENDED JUNE 30, 2007****OR**




o
            **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 000-21571**










**SES
      SOLAR INC.**












(EXACT
      NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)




**Delaware**
            **33-0860242**(STATE
                OR OTHER JURISDICTION OF
            (IRS
                EMPLOYERINCORPORATION
                OR ORGANIZATION)
            IDENTIFICATION
                NUMBER)




129,
      route de Saint-Julien, 1228 Plan-les-Ouates, Geneva,
      Switzerland


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)





**+41-22-884-1484**









(ISSUER'S
      TELEPHONE NUMBER, INCLUDING AREA CODE)









Check
      whether the issuer (1) has filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 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 o





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act).


Yes o No x





The
      number of shares outstanding of each of the issuer's classes of stock as of
      August 9, 2007 is 73,081,168 shares of common stock, par value $.001 per
      share.





Transitional
      Small Business Disclosure Format (Check One) Yes o No x










SES
      SOLAR, INC.


QUARTERLY
      REPORT ON FORM 10-QSB


QUARTERLY
      PERIOD ENDED JUNE 30, 2007




TABLE
      OF
      CONTENTS




PagePART
                I FINANCIAL INFORMATIONItem
                1. FINANCIAL STATEMENTSConsolidated
                Balance Sheet - June 30, 2007 and December 31, 2006
            
            3Consolidated
                Statements of Operations and Comprehensive Loss for the Three Months
                Ended
                June 30, 2007 and 2006 and for the Six Months Ended June 30, 2007
                and
                2006
            
            4Consolidated
                Statements of Cash Flows for the Six Months Ended June 30, 2007 and
                2006
            
            5Notes
                to the Consolidated Financial Statements
            
            6Item
                2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION
            
            15Item
                3. CONTROLS AND PROCEDURES
            
            23PART
                II OTHER INFORMATIONItem
                1. LEGAL PROCEEDINGSItem
                2.UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            
            24Item
                3.DEFAULTS
                UPON SENIOR SECURITIES
            
            24Item
                4.SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            24Item
                5.OTHER
                INFORMATION
            
            24Item
                6. EXHIBITS
            
            25SIGNATURES
            
            26





2




**Part
      I FINANCIAL INFORMATION**




**Item
      1. FINANCIAL STATEMENTS**




**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEETS**


**(in
      $, except per share amounts)**





**June
                30th**
              **2007**
            
            **December
                31st**
              **2006****(unaudited)****ASSETS
                (in $)**Current
                Assets:Cash
                and cash equivalents
            
            
            5,538,585
            
            
            6,016,666Receivables,
                net of allowance for doubtful accounts of $0 for the periods ended
                2007
                and 2006
            
            
            10,310
            
            
            10,386Due
                from related party
            
            
            77,808
            
            
            78,386Inventory
            
            
            235,527
            
            
            237,275Other
                current assets
            
            
            156,973
            
            
            203,280**Total
                current assets**
            
            
            **6,019,203**
            
            
            **6,545,993**Long-Term
                Assets:Deferred
                expense
            
            
            300,000
            
            
            420,000Advance
                payments for machinery
            
            
            88,755
            
            
            0**Total
                other long-term assets**
            
            
            **388,755**
            
            
            **420,000**Property
                and Equipment, at cost,
            
            
            381,085
            
            
            376,837Less
                accumulated depreciation and amortization
            
            
            (277,615
            )
            
            (254,779
            )Building
                development
            
            
            412,691
            
            
            219,619**Total
                fixed assets**
            
            
            **516,161**
            
            
            **341,677****Total
                long-term assets**
            
            
            **904,916**
            
            
            **761,677****Total
                assets**
            
            
            **6,924,119**
            
            
            **7,307,670****LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**Current
                Liabilities:Short-term
                loan
            
            
            1,195,855
            
            
            409,920Accounts
                payable
            
            
            346,595
            
            
            329,323Billings
                in excess of cost and estimated earnings
            
            
            374,215
            
            
            123,573**Total
                current liabilities**
            
            
            **1,916,665**
            
            
            **862,816**Long-Term
                Liabilities:Loan
                payable
            
            
            0
            
            
            794,810**Total
                long-term liabilities**
            
            
            **0**
            
            
            **794,810**Stockholders'
                Equity:Common
                stock, $0.001 par value; authorized 100,000,000 shares, issued and
                outstanding; 73,081,168 shares
            
            
            73,081
            
            
            73,081Additional
                paid-in capital
            
            
            8,081,740
            
            
            8,050,093Accumulated
                other comprehensive income (loss)Translation
                adjustment
            
            
            (213,269
            )
            
            (226,816
            )Year
                end accumulated deficit
            
            
            (2,934,098
            )
            
            (2,246,314
            )**Total
                stockholders' equity**
            
            
            **5,007,454**
            
            
            **5,650,044****Total
                liabilities and stockholders' equity**
            
            
            **6,924,119**
            
            
            **7,307,670**





*See
      accompanying summary of accounting policies and the notes to the financial
      statements.*




3




**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**


**(in
      $, except per share amounts)**




**For
                the Three Months**
              **Ended
                June 30**
            
            **For
                the Six Months**
              **Ended
                June 30****2007**
            
            **2006**
            
            **2007**
            
            **2006****(unaudited)**
            
            **(unaudited)**
            
            **(unaudited)**
            
            **(unaudited)**Revenue:
            
            
            
            
            
            
            
            ****Revenue
            
            
            1,165,035
            
            
            10,055
            
            
            1,165,035
            
            
            10,055Cost
                of goods sold (exclusive of depreciation shown separately
                below)
            
            
            969,972
            
            
            6,924
            
            
            969,972
            
            
            6,924Costs
                and Expenses:Personnel
            
            
            86,779
            
            
            38,278
            
            
            172,164
            
            
            61,379Rent
                and leases expenses
            
            
            32,382
            
            
            29,413
            
            
            65,152
            
            
            56,080Research
                & Development
            
            
            58,963
            
            
            23,553
            
            
            169,436
            
            
            47,580Other
                General & Administrative Expenses
            
            
            301,442
            
            
            40,466
            
            
            492,067
            
            
            100,522Depreciation
                and amortization
            
            
            12,145
            
            
            13,419
            
            
            24,741
            
            
            24,553Total
                costs and expenses
            
            
            **491,711**
            
            
            **145,129**
            
            
            **923,560**
            
            
            **290,114**Other
                Income and Expense:Interest
                expense
            
            
            (16,037
            )
            
            (16,039
            )
            
            (29,006
            )
            
            (25,831
            )Interest
                income
            
            
            46,788
            
            
            0
            
            
            95,288
            
            
            0Foreign
                exchange gain/(loss)
            
            
            (30,270
            )
            
            0
            
            
            (25,569
            )
            
            0Total
                other income
            
            
            **481**
            
            
            **(16,039**
            **)**
            
            **40,713**
            
            
            **(25,831**
            **)**Loss
                before taxes
            
            
            (296,167
            )
            
            (158,037
            )
            
            (687,784
            )
            
            (312,814
            )Income
                taxes
            
            
            0
            
            
            0
            
            
            0
            
            
            0Net
                Loss
            
            
            **(**296,167
            **)**
            
            **(158,037**
            **)**
            
            **(**687,784
            **)**
            
            **(312,814**
            **)**Other
                Comprehensive loss/income:Translation
                adjustment
            
            
            17,263
            
            
            (36,967
            )
            
            13,547
            
            
            (41,371
            )Comprehensive
                loss
            
            
            **(278,904**
            **)**
            
            **(195,004**
            **)**
            
            **(674,237**
            **)**
            
            **(354,185**
            **)**Basic
                and diluted weighted average shares
            
            
            48,937,761
            
            
            24,143,410
            
            
            48,937,761
            
            
            24,143,410Basic
                and diluted net loss per share
            
            
            **(0.006**
            **)**
            
            **(0.007**
            **)**
            
            **(0.014**
            **)**
            
            **(0.013**
            **)**




*See
      accompanying summary of accounting policies and the notes to the financial
      statements.*




4




**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(in
      $, except per share amounts)**





**Six
                months ended June 30,****2007**
            
            **2006****(unaudited)**
            
            **(unaudited)**Cash
                Flows from Operating Activities:Net
                loss
            
            
            (687,784
            )
            
            (312,814
            )Adjustments
                to reconcile net loss to cash used inoperating
                activities:Depreciation
                and amortization
            
            
            24,741
            
            
            24,553Stock
                compensation for options
            
            
            31,647
            
            
            0Changes
                in operating assets and liabilities:(Increase)
                decrease in:Receivables,
                including due from relatedparty
            
            
            0
            
            
            178,578Inventory
            
            
            0
            
            
            0Other
                current assets and deferred expenses
            
            
            164,866
            
            
            (127,594
            )Increase
                (decrease) in:Accounts
                payable and accrued exp.
            
            
            19,432
            
            
            (77,508
            )Billings
                in excess of cost and estimatedearnings
            
            
            251,834
            
            
            0**Net
                cash used in operating activities**
            
            
            (195,264
            )
            
            (314,785
            )Cash
                Flows from investing activities:Property,
                plants and equipment
            
            
            (201,941
            )
            
            (16,376
            )Advance
                payments for machinery
            
            
            (88,854
            )
            
            0**Net
                cash used in investing activities**
            
            
            (290,795
            )
            
            (16,376
            )Cash
                Flows from financing activities:Proceed
                from loans
            
            
            0
            
            
            391,300Bank
                loan
            
            
            0
            
            
            (50,482
            )**Net
                cash provided by financing activities**
            
            
            **0**
            
            
            **340,818**Increase
                (decrease) in cash and cash equivalents
            
            
            (486,059
            )
            
            9,657Effect
                of exchange rate changes on cash
            
            
            7,978
            
            
            698Cash
                and cash equivalents, beginning of the quarter
            
            
            6,016,666
            
            
            35,170Cash
                and cash equivalents, end of the quarter
            
            
            5,538,585
            
            
            45,525Supplemental
                cash flow information:Cash
                paid for interest
            
            
            29,006
            
            
            25,832Non-cash
                Activities-
                Issuance of stock options for services
            
            
            31,647
            
            
            0




*See
      accompanying summary of accounting policies and the notes to the financial
      statements.*




5




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




1. **Organization
      and Nature of Operations**




Organization
      - SES Solar Inc. (the “Company,” “SES USA,” “our,” “we,” and “us”) is the result
      of a reverse acquisition accomplished on September 27, 2006 between SES USA,
      a
      Delaware company, which had no operations and net assets of $39,069, and Société
d'Energie Solaire SA (“SES Switzerland”), a Swiss company. SES USA acquired all
      of the outstanding shares of SES Switzerland. For accounting purposes, the
      acquisition has been treated as a recapitalization of SES Switzerland with
      SES
      Switzerland as the acquirer (reverse acquisition). SES Switzerland acquired
      10,668,000 shares of SES USA common stock in the transaction. The
      historical financial statements prior to September 27, 2006 are those of SES
      Switzerland. The reverse acquisition resulted in a change of control of SES
      USA,
      with the former stockholders of SES Switzerland owning approximately 70% of
      SES
      USA and SES Switzerland becoming SES USA's wholly owned subsidiary.




SES
      Switzerland was formed in 2001 for the purpose of researching, developing,
      manufacturing and selling innovative products to the solar photovoltaic market.
      From its inception, SES Switzerland has focused primarily on manufacturing
      and
      installing silicon photovoltaic solar cells panels. The principal source of
      revenue for the Company has been the sale of photovoltaic panels in turn-key
      installations, manufactured in house or purchased from subcontractors, to
      electric companies, local governmental agencies and private house
      owners.





SES
      USA
      issued 4,100,001 shares of common stock to third parties on November 7, 2006
      resulting in a dilution of the historical and former shareholders of SES
      Switzerland to approximately 66%.





**2.**  **Plan
      of Operations**




SES
      Switzerland has experienced losses from operations and anticipates incurring
      losses in the near future. SES Switzerland has developed, and is in the process
      of patenting, a new assembly technology for solar panels, which the Company
      believes will allow higher quality electrical contacts, better performance
      and
      highly reduced costs resulting from increased automation processes.




The
      Company’s business plan includes the development of a new assembly line based on
      its proprietary technology and the construction of a manufacturing facility
      in
      the suburbs of Geneva, Switzerland to produce solar panels or modules and solar
      tiles at a lower cost. The Company expects that construction of the facility
      will commence in July 2007. These activities require the Company to design
      and
      manufacture prototype panels, have them approved in accordance with European
      and
      other standards, manufacture them in series and sell them in the main markets
      for solar photovoltaic cells. Costs incurred in manufacturing prototype panels
      have been expensed as research and development costs.




SES
      USA
      does not believe that it can achieve profitability until development,
      implementation and commercialization of new products manufactured through the
      new assembling processes are operational.





6




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




**3.**  **Basis
      of Presentation**





The
      consolidated interim financial statements included herein are unaudited and
      have
      been prepared by the Company pursuant to the rules and regulations of the
      Securities and Exchange Commission. Certain information and footnote disclosures
      normally included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States have been omitted pursuant
      to
      such rules and regulations, although the Company believes that the disclosures
      are adequate to make the information presented not misleading. The consolidated
      interim financial statements include the accounts of the Company and its wholly
      owned subsidiary SES Switzerland. All significant inter-company accounts and
      transactions have been eliminated in consolidation.




These
      statements reflect all normal recurring adjustments that, in the opinion of
      management, are necessary for fair presentation of the information contained
      herein. These consolidated interim financial statements should be read in
      conjunction with the financial statements and notes thereto included in the
      Company's Annual Report on Form 10-KSB for the year ended December 31, 2006.
      The
      Company adheres to the same accounting policies in preparation of its interim
      financial statements. As permitted under generally accepted accounting
      principles, interim accounting for certain expenses, including income taxes
      are
      based on full year assumptions. Such amounts are expensed in full in the year
      incurred. For interim financial reporting purposes, income taxes are recorded
      based upon estimated annual income tax rates.




**4.**  **Summary
      of Significant Accounting Policies**




The
      consolidated interim financial statements include the accounts of the Company
      and its wholly owned subsidiary, SES Switzerland. All significant inter-company
      accounts and transactions have been eliminated in the
      consolidation.





The
      preparation of financial statements in conformity with United States generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the amounts reported in the financial statements and
      accompanying disclosures of the Company. Although these estimates are based
      on
      management's knowledge of current events and actions that the Company may
      undertake in the future, actual results may differ from such
      estimates.




*Foreign
      Currency Translation* —The
      currency of SES USA is the U.S. dollar whereas the wholly owned subsidiary's
      functional currency is the Swiss Franc (“CHF”). The financial statements of the
      Company's wholly owned subsidiary, SES Switzerland, are translated to U.S.
      dollar equivalents, the reporting currency, under the current method in
      accordance with SFAS No. 52, "Foreign Currency Translation". Assets and
      liabilities are translated into U.S. dollar equivalents at rates of exchange
      in
      effect at the balance sheet date. Average rates for the year are used to
      translate revenues and expenses. The cumulative translation adjustment is
      reported as a component of accumulated other comprehensive income (loss).
      Foreign currency differences from intercompany receivables and payables are
      recorded as Foreign Exchange Gains/Losses in the Statement of
      Operations.




The
      exchange rates used for translating the financial statements are listed
      below:




Average
                Rates
            
            2007
            
            2006CHF
            
            CHF$
            1.22743
            
            
            1.27779




2007
            
            
            2006Balance
                Sheet period-end rates
            
            
            CHF
            
            
            CHF$
            1.22881
            
            
            1.21975





*Stock
      based compensation*




Since
      inception the Company has accounted for its stock based compensation plans
      under
      Statement on Financial Accounting Standards (“SFAS”) No. 123 (Revised
      2004), *“Share
      Based Payments”,* The
      Company from time to time issues common stock, stock options or common stock
      warrants to acquire services or goods from non-employees. Common stock, stock
      options and common stock warrants issued to other than employees or directors
      are recorded on the basis of their fair value, which is measured as of the
      date
      required by Emerging Issues Task Force (“EITF”) Issue 96-18, *“Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services.”*




In
      accordance with EITF 96-18, the stock options or common stock warrants are
      valued using the Black-Scholes model on the basis of the market price of the
      underlying common stock on the “valuation date”, which for options and warrants
      related to contracts that have substantial disincentives to non-performance
      is
      the date of the contract, and for all other contracts is the vesting date.
      Expense related to the options and warrants is recognized on a straight-line
      basis over the shorter of the period over which services are to be received
      or
      the vesting period. Where expense must be recognized prior to a valuation date,
      the expense is computed under the Black-Scholes model on the basis of the market
      price of the underlying common stock at the end of the period, and any
      subsequent changes in the market price of the underlying common stock through
      the valuation date is reflected in the expense recorded in the subsequent period
      in which that change occurs.





7




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





*Loss
      Per Share* —
Loss
      per share is presented in accordance with the provisions of SFAS No. 128,
      "Earnings Per Share". Basic earnings per share does not include the effects
      of
      potentially dilutive warrants and is computed by dividing income available
      to
      common stockholders by the weighted average number of shares of common stock
      outstanding for the period. Diluted earnings per share reflects, in periods
      in
      which they have a dilutive effect, commitments to issue common stock and common
      stock issuable upon exercise of warrants for periods in which the warrants'
      exercise price is lower than the Company's average share price for the period.
      As per an agreement dated September 1, 2006 (as amended), related to the reverse
      acquisition, the Company is required to obtain additional financing in the
      amount of CHF12,000,000 ($9,765,546) no later than November 30, 2007 to build
      a
      manufacturing plant in Plan-les-Ouates. Otherwise, 24,143,410 escrowed shares
      will be cancelled. The escrowed shares are not included in the calculation
      of
      Earnings per Share since they are anti-dilutive. Stock options of 43,110 were
      granted to a non-employee, Hogan & Hartson LLP, and outstanding as of June
      18, 2007 and are not included in the Earnings per Share.




**Six
                Months Ended June 30,****2007**
            
            **2006**Basic
                Weighted average shares outstanding
            
            
            48,937,761
            
            
            24,143,410Diluted
                weighted average shares outstanding
            
            
            48,937,761
            
            
            24,143,410




Note:
        Due
        to the net loss, the calculation of the effect of common stock equivalents
        due
        to issuance of warrants is excluded because of anti-dilution. The number
        of
        shares of common stock listed as beneficially owned by one selling stockholder
        includes 1,500,000 shares of common stock potentially issuable upon exercise
        of
        1,500,000 common share purchase warrants. Each common share purchase warrant
        is
        exercisable until November 22, 2010 at an exercise price of $0.90 per share.
        As
        of the June 30, 2007, and December 31, 2006 balance sheet dates, the warrants
        were not yet exercised. Also, they are not included in the computation of
        diluted loss per share because their effect was anti-dilutive.


*Revenue
      Recognition* —
The
      Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
      No.
      104, "Revenue Recognition" ("SAB 104"). SAB 104 requires that four basic
      criteria must be met before revenue can be recognized: (1) persuasive evidence
      of an arrangement exists; (2) delivery has occurred or services rendered; (3)
      the seller's price to the buyer is fixed and determinable; and (4) collection
      is
      reasonably assured.





Revenues
      and profits from general management of construction-type contracts are
      recognized on the completed-contract method; and, therefore when the project
      is
      completed. A contract is considered complete when all costs except insignificant
      items have been incurred and the installation is operating according to
      specifications or has been accepted by the customer. Contract costs include
      all
      direct materials and labor costs and those indirect costs related to contract
      performance, such as indirect labor, supplies, tools, repairs and depreciation
      costs. Costs in excess of amounts billed are classified as current assets under
      Work in Progress. Billings in excess of cost are classified under current
      liabilities as Billings in Excess of Cost and Estimated Earnings. Any
      anticipated losses on contracts are charged to operations as soon as they are
      determinable.




For
      the
      six months ended June 30, 2007 and 2006, the Company has no billed or unbilled
      amount representing claims or other similar items subject to uncertainty
      concerning their determination or ultimate realization. Amounts outstanding
      as
      at quarter end are expected to be collected in 2007.





8




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**Impact
      of Recently Issued Accounting Pronouncements**





In
      June
      2006, the Financial Accounting Standards Board issued interpretation No. 48
      ("FIN 48"), "Accounting for Uncertainty in Income Taxes". FIN 48 establishes
      the
      minimum threshold for recognizing, and a system for measuring, the benefits
      of
      tax-return positions in financial statements. The provisions of FIN 48 were
      effective for the Company as of January 1, 2007 and required application of
      FIN
      48 to all existing tax positions upon initial adoption. The adoption of the
      standard had no effect on the Company's financial condition or results of
      operation.




The
      Company has no unrecognized tax benefits as of January 1, 2007 and June 30,
      2007. The federal and cantonal tax authorities in Switzerland have assessed
      the
      income taxes based on the returns that the Company has filed up to and including
      fiscal year 2005. These assessments are final. Furthermore, the Company does
      not
      expect any changes to the tax returns that were filed for the fiscal year 2006
      since the Company has generated net losses.




Warrants
      issued in connection with financing activities are subject to the provisions
      of
      Emerging Issues Task Force Issue 00-19 ("EITF 00-19"), " *Accounting for Derivative Financial Instruments Indexed To, and Potentially
      Settled in, a Company's Own Stock* ." In
      December 2006, FASB issued FASB Staff Position ("FSP") No. EITF 00-19-2 ("EITF
      00-19-2"), *"Accounting for Registration Payment Arrangements"* which
      changed the way that a contingent obligation under a registration payment
      arrangement was recorded. EITF 00-19 describes the criteria under which warrants
      should be classified as either equity or as a liability. If the warrant is
      determined to be a liability under the method described in EITF 00-19, the
      liability is fair valued each reporting period with the changes recorded through
      earnings in the consolidated statements of operations. Under the new guidance
      provided in EITF 00-19-2 the contingent obligation under a registration payment
      arrangement should be separately recognized and measured in accordance with
      SFAS
      No. 5, " *Accounting for Contingencies* ." For
      registration payment arrangements and financial instruments subject to those
      arrangements that were entered into prior to the issuance of EITF 00-19-2,
      this is effective for financial statements issued for fiscal years beginning
      after December 15, 2006 and interim periods within those fiscal years. The
      Company has determined that the adoption of EITF 00-19-2 had no effect on
      its financial statements since the warrants issued and the granted registration
      rights are not included in the scope of such FSP **.** ******





9




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




**5.**  **Inventory**





Inventory
      is summarized as follows:




****
            
            6/30/2007
            
            12/31/2006$
            
            $Raw
                Materials and Others
            
            
            89,004
            
            
            89,665Finished
                Goods
            
            
            146,523
            
            
            147,610**Total
                Inventory**
            
            
            **235,527**
            
            
            **237,275**




**6.**  **Borrowings
      Under Revolving Credit Facility**





SES
      Switzerland has a revolving credit line with UBS which was increased from
      CHF100,000 ($81,380) to CHF1,000,000 ($813,795) as at May 25, 2007, used mainly
      to cover short-term cash needs. The credit line is secured by the short term
      deposits in US dollars with UBS, amounting to $3,155,000 as at June, 30, 2007.
      The credit line bears interest at the rate of 4.75% (previously 6.75% p.a.).
      The
      credit line can be cancelled by either party at any time. As at June 30, 2007
      and December 31, 2006 the credit line was not used.





SES
      Switzerland also has a Construction Credit Agreement with Banque Cantonale
      de
      Genève in the amount of CHF4,800,000 ($3,906,218), which is intended for
      financing the construction of the new facility. This credit line must be drawn
      down before the later of the completion of the construction or June 30, 2008.
      The construction loan bears interest at a rate of 3.25% p.a. and has not yet
      been utilized. The loan is secured by a mortgage on the
      construction.





On
      December 20, 2006, SES Switzerland signed a construction loan with Ms. Christine
      Erné, the Company's principal stockholder, to enable SES Switzerland to commence
      construction of a new manufacturing facility near Geneva, Switzerland during
      2007. The construction loan is in the amount of CHF2,700,000 ($2,197,248).
      The
      Company will pay interest at the rate of 4.5% p.a. The funds will be disbursed
      as soon as construction has begun. The term of the loan is two
      years.




**7.**  **Short-Term
      Debt Service Geneva State Department of Energy**





On
      November 3, 2003, SES Switzerland received a loan from the Geneva (Switzerland)
      State Department of Energy of up to CHF1,000,000 ($813,795). SES Switzerland
      used CHF969,470 ($788,955) as at June 30, 2007, and CHF969,470 ($794,810) as
      at
      December 31, 2006. The loan is to be repaid on March 31, 2008. The loan bears
      interest at a rate of 4% p.a. The stockholders, Christiane Ernè, Jean-Christophe
      Hadorn and Claudia Rey, have pledged in the aggregate 10,000,000 issued
      common shares of the Company as a guarantee for the loan. At the moment, the
      Company does not have any plans to repay the loan before its due
      date.





SES
      Switzerland was also granted a loan by the Geneva (Switzerland) State Department
      of Energy in the amount of CHF500,000 ($406,900) on January 21, 2004 with
      the funds to be available contingent upon SES Switzerland's meeting certain
      conditions precedent, which were fulfilled by March 22, 2006. The loan has
      a
      term of 18 months and carries an interest rate of 5% p.a. with repayment due
      on
      September 21, 2007.





10




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




**8.**  **Commitments
      and Contingencies**




*Operating
      Leases* —
      Lease expenses for the six months ended June 30, 2007 and 2006 were $65,152
      and
      $56,080, respectively.





The
      following table presents future minimum lease commitments (concerning the lease
      of a vehicle) under operating leases at June 30, 2007:




**Operating****Leases**
              **$**2007****
            
            
            7,2272008
            
            
            14,5432009
            
            
            12,208Thereafter
            
            
            -**Total**
            
            
            **33,978**




In
      addition to the amounts disclosed above, SES Switzerland has an operating lease
      for its office located at 129 Route de Saint-Julien, Plan-les-Ouates,
      Switzerland (a suburb of Geneva). The lease agreement expires on February 28,
      2008 and establishes the total rent of CHF52,104 ($42,450) per
      year.




SES
      Switzerland also leases a 1,654 square meter industrial facility in Harkingen,
      Switzerland. The monthly fixed rent is CHF7,232 ($5,892). The lease has no
      specific termination date. The lease may be cancelled with six months notice
      at
      the end of the month, except for the end of December, which requires an
      additional month notice.


On
      May
      27, 2005, we received authorization from the State of Geneva to build a
      manufacturing facility on other property in Plan-les-Ouates, Switzerland and
      we
      received a lease for the land in February 2007. The lease for use of the land
      is
      for 60 years commencing on July 1, 2006.




The
      following are the lease commitments.





**Use
                of****Land**
              **$**2007
            
            
            29,3562008
            
            
            58,7122009
            
            
            58,7122010
            
            
            58,7122011
            
            
            58,712Thereafter
            
            
            3,199,826**Total**
            
            
            **3,464,030**




SES
      Switzerland has no non-cancellable operating leases.





11




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





*Litigation* —
The
      Company has no litigation currently pending.




*Capital
      Commitments* —
At
      June
      30, 2007, the Company has an outstanding purchase order of EUR448,600 ($604,452,
      using the exchange rate of 0.74216 at June 30, 2007) for the future construction
      of a new machine to be used in the new plant for solar modules production.
      A
      letter of credit in the amount of EUR224,300 ($302,226, using the exchange
      rate
      of 0.74216 at June 30, 2007) has been issued by SES Switzerland's bank as a
      partial guarantee of payment. There were no charges to the Company by the
      bank for the letter of credit. The Company has made an advance of
      EUR67,290 ($88,755) for the purchase of this machine. The balance due will
      be
      paid upon delivery of the machine.




**9.**  **Business
      Segments**





All
      of
      Company's operations are conducted through its wholly owned subsidiary, SES
      Switzerland, and are limited to the assembly and installation of photovoltaic
      panels in Switzerland, the only business segment of the Company.




**10.**  **Stockholders'
      Equity**




*Common
      Stock* —
The
      Company has authorized and issued 73,081,168 shares of common stock, par value
      $0.001 per share.




12




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




*Stock
      Options -* On
      June
      18, 2007, SES Solar Inc. (the “Company”) entered into a Call Option Agreement
      (the “Agreement”) with a non-employee, Hogan & Hartson LLP (the “Optionee”),
      pursuant to which the Company granted to the Optionee the right and option
      to
      purchase 43,110 shares of common stock, par value 0.001 per share of the Company
      (the “Option Shares”), at an exercise price of $.001 per share (the “Option”) in
      connection with the general legal representation of the Company. The Company
      will grant, for each of four quarters to total 143,700 options, to the Optionee
      the right and option to purchase the Option Shares, the first Option being
      granted on June 18, 2007 and the last Option on March 1, 2008. The Option
      expires within 24 months following the grant of each Option. Both the Option
      and
      the Agreement are transferable by the Optionee. No options were exercised as
      at
      June 30, 2007.





The
      Company uses the Black-Scholes option-pricing model to compute the fair value
      of
      stock options which requires the Company to make the following
      assumptions:


Period
                  Ended June 30,2007
              
              2006Expected
                  life (years)
              
              
              2.34
              
              $
              0Risk-free
                  interest rate
              
              
              4.89
              %
              $
              0Dividend
                  yield
              
              
              0
              
              
              0Volatility
              
              
              38
              %
              $
              0





·
            The
                term of grants is based on the contractual
                method.





·
            The
                risk-free rate is based on the two-year Treasury bond rate at the
                date of
                the grant.





·
            The
                dividend yield on the Company's common stock is assumed to be zero
                since
                the Company does not pay dividends and has no current plans to do
                so in
                the future.





·
            The
                market price volatility of the Company's common stock is based on
                the
                volatility of other companies in the same
                industry.




*Warrants* —
      During the year ended December 31, 2006, the Company issued stock purchase
      warrants exercisable for 1,500,000 shares of common stock at $0.90 per
      share with an expiration date of November 21, 2010 in consideration for certain
      corporate advisory services as well as capital raising services.




During
      the six-month period ended June 30, 2007, no stock purchase warrants were
      exercised.





Warrant
      transactions consisted of the following during the six-month period ended June
      30, 2007:




**Exercisable
                Warrants**
            
            **Strike
                Price**Warrants
                outstanding as of December 31, 2006
            
            
            0
            
            $
            0Warrants
                granted as consideration for agent's fee
            
            
            1,500,000
            
            $
            0.90Exercise
                of warrants
            
            
            0
            
            
            0Warrants
                outstanding as of June 30, 2007
            
            
            1,500,000
            
            $
            0.90




Warrants
      outstanding expire as follows:




**Year**
            
            **Warrants
                Expiring**
            
            **Strike
                Price ($)**2010
            
            
            1,500,000
            
            
            0.901,500,000




The
      Company granted registration rights to a finder (Lansing
      Securities) in connection with the November 22, 2006, private
      placement including the right to include all or any part of the Warrant
      Shares (the "Registrable Securities") in the next registration statement and
      subsequent registration statements that the Company files with the U.S.
      Securities and Exchange Commission from time to time (the "Registration
      Statement") (other than a registration statement on Form S-8 or Form S-4) until
      all of the Registrable Securities have been duly registered. The Warrant Shares
      are included in the Registration Statement on Form SB-2 filed by the Company
      in
      February 2007 but not yet declared effective.





On
      August
      31, 2006, SES USA entered into an agreement with Standard Atlantic to advise
      SES
      USA and its stockholders in connection with the purchase of all of the shares
      of
      SES Switzerland.




Pursuant
      to the terms of a Finder's Agreement between SES USA and Standard Atlantic
      (the "Finder's Agreement") the parties agreed to a finder's fee of $228,000
      if a
      transaction were consummated. The Finder's Agreement also provided that Standard
      Atlantic would continue to provide consulting services to the Company for a
      period of 24 months regarding investor relations matters for a monthly fee
      of
      $20,000. The two-year consulting fee was due and was paid to
      Standard Atlantic at closing. The Company recorded the total amount as of
      September 30, 2006, as deferred expense and amortizes the amount over the 24
      months of the consulting agreement.




As
      per
      the terms of the Long-Term Escrow Agreement dated September 1, 2006 (as
      amended), related to the reverse acquisition, the Company is required to obtain
      additional financing in the amount of CHF12,000,000 ($9,765,546) before November
      30, 2007 to build the manufacturing plant in Plan-les-Ouates. Otherwise, the
      24,143,410 shares of common stock escrowed by Christiane Ernè,
      Jean-Christophe Hadorn and Claudia Rey pursuant to the terms of the Long-Term
      Escrow Agreement will be cancelled. The shares of common stock of the
      Company held in escrow pursuant to the terms of the Long-Term Escrow Agreement
      are to be delivered from escrow by the escrow agent on the second anniversary
      of
      the closing of the share exchange agreement. The escrowed shares are not
      included in the calculation of Earnings per Share since they are
      anti-dilutive.





13




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




**11.**  **Subsequent
      Events**





No
      major
      events have occurred since June 30, 2007 except as follows. We commenced
      construction of our manufacturing facility in Geneva, Switzerland in July 2007.
      The Company expects that capital expenditures during the fiscal year ending
      December 31, 2007 to construct the new manufacturing facility will be $8,544,852
      and $2,441,386 to purchase new machinery. We anticipate that the facility will
      be completed during the first quarter of 2008.  In
      addition, the Call Option Agreement entered into on June 18, 2007 with Hogan
      & Hartson LLP was terminated on July 18, 2007 and all options that had
      already been granted were cancelled. No consideration was paid in connection
      with the termination.





14




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





*You
      should read the following discussion of our financial condition and results
      of
      operations together with the audited financial statements and the notes thereto
      included in our Annual Report on Form 10-KSB for the year ended December 31,
      2006. The following discussion contains forward-looking statements that reflect
      our plans, estimates and beliefs. Our actual results may differ materially
      from
      those anticipated in these forward-looking statements, including those set
      forth
      in our Annual Report on Form 10-KSB.*





SES
      Solar
      Inc., a Delaware corporation (the “Company,” “SES USA,” “our,” “we,” and “us”),
      based in Geneva, Switzerland, is engaged in the business of designing,
      engineering and producing solar panels or modules and solar tiles for generating
      electricity. We have developed a new assembly technology for solar panels which
      we believe will allow for higher quality electrical contacts, better performance
      and reduced costs resulting from proprietary automation processes. We are
      beginning construction of a manufacturing facility that will include a new
      assembly line based on our proprietary technology to complete the development
      and testing of our new products. To date, while we have been engaged in
      developing and testing our new solar panel technology, we have been developing
      the sales and distribution portions of our business by selling solar panels
      or
      modules and solar tiles, either manufactured by us using an early stage
      technology or manufactured for us by subcontractors, to electric companies,
      local governmental agencies and private home owners.





Our
      business was commenced in 2001 by Société d'Energie Solaire SA (“SES
      Switzerland”), a Swiss-based developer of cost-effective solar panels and solar
      roof tiles. On September 27, 2006, our parent company, SES USA, completed a
      share exchange agreement with SES Switzerland in which SES Switzerland became
      our wholly-owned subsidiary. Our parent company then abandoned our previous
      internet-based auction website business and the SEC Switzerland business of
      designing, engineering and producing solar panels or modules and solar tiles
      became the sole business of the combined company. Because SES USA and its
      subsidiary on a consolidated basis is the successor business to SES Switzerland,
      and because the operations and assets of SES Switzerland represent our entire
      business and operations from the closing date of the share exchange agreement,
      management's discussion and analysis and plan of operations are based on SES
      Switzerland's financial results for the relevant periods.





15




**Overview
      and Plan of Operation**





This
      Overview addresses our plan of operation and the trends, events, and
      uncertainties that have been identified by our management as those we believe
      are reasonably likely to materially affect the comparison of historical
      operating results reported herein to either past period results or to future
      operating results.





SES
      Switzerland has developed, and is in the process of patenting, a new assembly
      technology for solar panels or modules and solar tiles. Our business plan
      includes the development of a new assembly line based on our proprietary
      technology, using a manufacturing facility in the suburbs of Geneva, Switzerland
      which is currently under construction, to produce solar panels or modules and
      solar tiles at a lower cost. We believe this new facility will position us
      as
      one of the few manufacturers in Europe that can also produce customized solar
      photovoltaic modules that are larger than three square meters. To implement
      our
      business plan, we will need to complete the design of the solar panels or
      modules and solar tiles, manufacture and test the prototype panels, have them
      approved in accordance with European and other standards, manufacture them
      in
      series and sell them in major markets in Europe and eventually other countries
      around the world. Our plan is to complete the manufacturing facility during
      the
      first quarter of 2008, manufacture the prototypes and have them tested and
      licensed in 2008, to commence production and sale of our new products on a
      limited basis in 2008 and to begin full capacity production and sale of our
      new
      products in 2009.





To
      date,
      we have generated limited revenue from the sale of solar panels or modules
      and
      solar tiles, either manufactured by us using an early stage technology or
      manufactured for us by subcontractors, to electric companies, local governmental
      agencies and private home owners. We currently have available two product lines:
      solar tiles and solar modules. Historically, we have relied upon third party
      vendors to supply us with component parts such as cells. As a result of
      commencing construction on our new manufacturing facility and our new technology
      for module assembly, we believe that we are positioning ourselves to offer
      proprietary products that are competitive in the solar energy market.





SES
      Switzerland has experienced losses from its early stage operations, which have
      involved developing and testing our new solar panel technology and commencement
      of the sales and distribution portions of our business by selling solar panels
      or modules and solar tiles using an early stage technology. We anticipate
      incurring losses over the next few years as we complete the development,
      testing, prototypes and licensing of our new products and commence production.
      Our research and development costs and costs incurred in manufacturing prototype
      panels to date have been expensed. We do not believe that we can achieve
      profitability until development, implementation and commercialization of new
      products manufactured through the new assembling processes are
      operational.





We
      believe the demand for solar
      panels and solar tiles ultimately will be substantial. According to the Energy Information
      Administration, global demand for electricity is expected to increase from
      14.8
      trillion kilowatt hours in 2003 to 27.1 trillion kilowatt hours in 2025. Over
      time, supply constraints, rising electricity prices, dependence on foreign
      countries for fuel feedstock and environmental concerns could limit the ability
      of many conventional sources of electricity and other alternative sources to
      supply this rapidly expanding global demand. According to the Department of
      Energy, solar energy is the only source of renewable power with a large enough
      resource base to supply a significant percentage of the world’s electricity
      needs over the next several decades.





However,
      over the near term there are significant competitive concerns with solar energy.
      Currently the cost of solar electricity substantially exceeds the retail price
      of electricity in every significant market in the world. To nurture the
      development of solar electricity, governmental bodies in many countries, most
      notably Germany, Italy, Spain, France, South Korea, Japan, Canada and the United
      States, have provided some level of subsidies in the form of feed-in tariffs,
      rebates, tax write-offs and other incentives to end-users, distributors, systems
      integrators and manufacturers of solar photovoltaic panels and other products.
      We believe that the near-term growth in the solar energy industry depends
      significantly on the availability and size of these government subsidies and
      on
      the ability of the industry to reduce the cost of generating solar electricity.





As
      such,
      we believe t he
      market
      for solar energy products is and will continue to be heavily dependent on public
      policies of supporting growth of solar energy and, as a result, the continuation
      of such policies and level of support present the greatest uncertainties for
      our
      products. For example, there are some indications that regulations in Germany,
      a
      major European market for our products and services, may change unfavorably
      with
      regard to solar or photovoltaic electricity as discussions are ongoing about
      modifying the German Renewable Energy Law, or the EEG. If Germany reduces or
      eliminates the subsidies under the EEG or implements other unfavorable regulations, this would have a major impact on the solar
      photovoltaic market and adversely affect our growth prospects. Other countries,
      such as Italy and Greece, have established incentives to increase solar
      photovoltaic energy production, creating new opportunities for photovoltaic
      products, although there is no guarantee this will occur or that such incentives
      will be available to us.





Worldwide,
      annual installations by the photovoltaic industry grew from 0.4GW in 2002 to
      1.7GW in 2006, representing an average annual growth rate of over 42%, but
      solar
      electricity still represents a small fraction of the supply of electricity.
      So
      long as governments and the market are focused on the ability of manufacturers
      to develop new technologies that reduce the cost of solar electricity, we
      believe that the demand for solar energy products will continue to grow
      significantly. This growth projection is based on continued governmental
      support, on the success of such manufacturing efforts to reduce the gap between
      the cost of solar electricity and more conventional and established methods
      of
      generating electricity and on other developments affecting the world energy
      market. In
      addition to the uncertainties associated with g overnment
      subsidies and these other factors ,
      it is
      also possible that breakthrough technologies might emerge in other areas that
      will reduce demand for new solar energy products. Also, even within the solar
      energy area, developments in thin films or nanoscience which could reduce the
      cost of photovoltaic cells or continued shortages in the supply of polysilicon,
      an essential raw material in the production of our photovoltaic cells, could
      impact our proposed new products and adversely affect our plan of
      operation.





We
      are in
      discussions with strategic partners, including cell manufacturers, photovoltaic
      line manufacturers and special machine manufacturers to assist us with our
      new
      technology for module assembly. We are also progressing with our plans to
      construct a new manufacturing facility, which is under construction. Capital
      expenditures during the most recent six months totaled $290,795 and research
      and
      development expenses equaled $169,436. We also continued sales of solar panels
      and solar tiles to customers during this period, generating revenues of
      approximately $1.16 million and had a net loss of approximately $687,784.





We
      expect
      capital expenditures during the fiscal year ending December 31, 2007, which
      will
      include construction of our new manufacturing facility, to equal or exceed
      $8.5
      million, plus $2.5 million to purchase new machinery. We anticipate financing
      a
      significant portion of these expenditures through available cash and lines
      of
      credit, but we will also need additional financing to complete construction
      and
      fund our operations. We do not have any current plans or agreements in place
      to
      secure such financing. We expect to continue to experience losses from
      operations during the remainder of 2007 and until we can generate revenues
      from
      our new products. As a result of our continuing need to fund operations and
      development of our new products, we expect to continue to need additional
      capital in order to continue as a going concern.





16




**Selected
      Financial Data (unaudited)**




*Balance
                Sheets*
            
            June
              2007
            
            December
              2006in
                $Total
                current assets
            
            
            6,019,203
            
            
            6,545,993Total
                long-term assets
            
            
            904,916
            
            
            761,677Total
                current liabilities
            
            
            1,916,665
            
            
            862,816Total
                long-term liabilities
            
            
            0
            
            
            794,810Total
                liabilities and stockholders' equity
            
            
            6,924,119
            
            
            7,307,670




**Statement
      Of Operations (unaudited)**




For
                the Three months ended
              June
                30,2007
            
            2006in
                $Total
                revenues
            
            
            1,165,035
            
            
            10,055Total
                cost of goods sold (exclusive of depreciation shown separately
                below)
            
            
            (969,972
            )
            
            (6,924
            )Personnel
            
            
            86,779
            
            
            38,278Rent
                and lease expenses
            
            
            32,382
            
            
            29,413Research
                and development
            
            
            58,963
            
            
            23,553Depreciation
                and amortization
            
            
            12,145
            
            
            13,419General
                and administrative expenses
            
            
            301,442
            
            
            40,466Interest
                expense
            
            
            (16,037
            )
            
            (16,039
            )Interest
                income
            
            
            46,788
            
            
            —Foreign
                exchange gain /(loss)
            
            
            (30,270
            )
            
            —Total
                other income (expense)
            
            
            481
            
            
            (16,039
            )Taxes
            
            
            —
            
            
            —Net
                loss
            
            
            (296,167
            )
            
            (158,037
            )Other
                compensative income: translation adjustment
            
            
            17,263
            
            
            (36,967
            )Comprehensive
                loss
            
            
            (278,904
            )
            
            (195,004
            )





17




**RESULTS
      OF OPERATIONS - COMPARISON OF THREE MONTHS ENDED JUNE 30, 2007 AND
      2006**





**Net
      Loss**




Our
      Company's net loss for the three months ended June 30, 2007 was $296,167 as
      compared to a net loss of $158,037 for the three months ended June 30, 2006.
      Notwithstanding the significant increase in total revenue and corresponding
      increase in total costs of goods sold, the increase in net loss during the
      period ended June 30, 2007 was primarily
      due to personnel
      costs to develop the new activities of our subsidiary, additional research
      expenses and increased general and administrative expenses associated with
      preparation and SEC compliance of various public filings.




**Revenues**




The
      Company recognizes revenue on the completed contract method, and therefore,
      only
      when a project is completed. During the period April 1, 2007 to June 30, 2007,
      we completed one photovoltaic installation project for total revenue of
      $1,165,035 as compared to $10,055 for the three months ended June 30, 2006.





**Cost
      of Goods Sold**





Cost
      of
      goods sold for the three months ended June 30, 2007 was $969,972 compared to
      cost of goods sold of $6,924 for the three months ended June 30, 2006. This
      increase is entirely attributable to the project completed during the
      period.





**Operating
      Expenses**





Operating
      expenses for the three months ended June 30, 2007 were $491,711 compared to
      operating expenses of $145,129 for the three months ended June 30, 2006.
      Personnel, rent, research and development, general and administrative, and
      depreciation and amortization expenses constitute the components of our
      Company's operating expenses. The majority of the increase in operating expenses
      was related to personnel costs to develop the new activities of our subsidiary
      (increase of $48,501), additional research and development expenses (increase
      of
      $35,410), and increased general and administrative expenses associated with
      preparation and SEC compliance of various public filings (increase of $260,976).
      We expect that as we continue to implement our business plan these expenses
      will
      increase accordingly.





18




**Other
      Income (Expense)**




Interest
      expense for the three months ended June 30, 2007 was $16,037 compared to $16,039
      for the three months ended June 30, 2006.




Interest
      income for the three months ended June 30, 2007 was $46,788 as compared to
      $0
      for the period ended June 30, 2006. The interest income earned during the period
      was received from time deposits.





Foreign
      exchange loss for the three months ended June 30, 2007 was $30,270 compared
      to
      $0 for the three months ended June 30, 2006. Historical financial statements
      prior to September 27, 2006, the date of the reverse acquisition, are those
      of
      SES Switzerland which conducts substantially all its business and incurs
      substantially all its costs in Swiss Francs.




**Statement
        Of Operations (unaudited)**




For
                the Six months ended
              June
                30,2007
            
            2006in
                $Total
                revenues
            
            
            1,165,035
            
            
            10,055Total
                cost of goods sold (exclusive of depreciation shown separately
                below)
            
            
            (969,972
            )
            
            (6,924
            )Personnel
            
            
            172,164
            
            
            61,379Rent
                and lease expenses
            
            
            65,152
            
            
            56,080Research
                and development
            
            
            169,436
            
            
            47,580Depreciation
                and amortization
            
            
            24,741
            
            
            24,553General
                and administrative expenses
            
            
            492,067
            
            
            100,522Interest
                expense
            
            
            (29,006
            )
            
            (25,831
            )Interest
                income
            
            
            95,288
            
            
            —Foreign
                exchange gain /(loss)
            
            
            (25,569
            )
            
            —Total
                other income (expense)
            
            
            40,713
            
            
            (25,831
            )Taxes
            
            
            —
            
            
            --Net
                loss
            
            
            (687,784
            )
            
            (312,814
            )Other
                compensative income: translation adjustment
            
            
            13,547
            
            
            (41,371
            )Comprehensive
                loss
            
            
            (674,237
            )
            
            (354,185
            )





19




**RESULTS
      OF OPERATIONS - COMPARISON SIX MONTHS ENDED JUNE 30, 2007 AND
      2006**




**Net
      Loss**




Our
      Company's net loss for the six months ended June 30, 2007 was $687,784, as
      compared to a net loss of $312,814 for the six months ended June 30, 2006. Notwithstanding
      the significant increase in total revenue and corresponding increase in total
      costs of goods sold, the increase in net loss during the period ended June
      30,
      2007 was primarily
      due to personnel
      costs to develop the new activities of our subsidiary, additional research
      expenses and increased general and administrative expenses associated with
      preparation and SEC compliance of various public filings.





**Revenues**




The
      Company recognizes revenues on the completed contract method, and therefore,
      only when a project is completed. During the period January 1 to June 30, 2007, we
      completed one photovoltaic installation project for total revenue of $1,165,035
      as compared to $10,055 for the three months ended June 30, 2006.





**Cost
      of Goods Sold**





Cost
      of
      goods sold for the six months ended June 30, 2007 was $969,972 compared to
      cost
      of goods sold of $6,924 for the six months ended June 30, 2006. This increase
      is
      entirely attributable to the project completed during the period.





**Operating
      Expenses**





Operating
      expenses for the six months ended June 30, 2007 were $923,560 compared to
      operating expenses of $290,114 for the six months ended June 30, 2006.
      Personnel, rent, research and development, general and administrative, and
      depreciation and amortization expenses constitute the components of our
      Company's operating expenses. The majority of the increase was related to
      personnel costs to develop the new activities of our subsidiary (increase of
      $110,785), additional research and development expenses (increase of $121,856),
      and increased general and administrative expenses associated with preparation
      and SEC compliance of various public filings (increase of $391,545). We expect
      that as we continue to implement our business plan these expenses will increase
      accordingly.




**Other
      Income (Expense)**




Interest
      expense increased to $29,006 for the six months ended June 30, 2007 as compared
      to $25,831 for the six months ended June 30, 2006. The increase in interest
      expense was primarily attributable to the increase in the amount of the loan
      from the State of Geneva. On March 22, 2006, the loan from the State of Geneva
      was increased from CHF969,470 ($788,955) to CHF1,469,470 ($1,195,855 using
      the
      exchange rate of 1.22881 disclosed on Note 4 of the Notes to the Consolidated
      Financial Statements).




Interest
      income for the six months ended June 30, 2007 was $95,288 as compared to $0
      for
      the period ended June 30, 2006. The interest income earned during the period
      was
      received from time deposits.





Foreign
      exchange loss for the six months ended June 30, 2007 was $25,569 compared to
      $0
      for the six months ended June 30, 2006. Historical financial statements prior
      to
      September 27, 2006, the date of the reverse acquisition, are those of SES
      Switzerland which conducts substantially all its business and incurs
      substantially all its costs in Swiss Francs.





20




**Liquidity
      and Capital Resources**




Our
      Company's principal cash requirements for the six months ended June 30, 2007
      were for operating expenses, including consulting, accounting and legal costs,
      staff costs, and accounts payable. As of June 30, 2007, we had working capital
      of $4,102,538 compared with negative working capital of ($299,527) as of June
      30, 2006. Our cash and cash equivalents increased to $5,538,585 as of June
      30,
      2007, as compared to $45,525 as of June 30, 2006 as a result of private
      placements completed on September 8, 2006 for gross proceeds of $3,701,080
      and
      on November 22, 2006 for gross proceeds of $3,690,000.




At
      June
      30, 2007, we had short-term debt in the amount of $1,195,855 which consisted
      of
      two loans made to our wholly-owned subsidiary, SES Switzerland, by the Geneva
      (Switzerland) State Department of Energy. The first such loan in the amount
      of
      up to $813,795 was made on November 3, 2003 and carries a principal balance
      of
      $788,955. The loan bears interest at the rate of 4% and is due on March 31,
      2008. The second loan was made on January 1, 2004 and carries a principal
      balance of $406,900. This loan bears interest at the rate of 5% and is due
      on
      September 21, 2007.




In
      addition, the Company also has a revolving credit line with UBS which was
      increased from $81,380 to $813,795 as of May 25, 2007, used mainly to cover
      short-term cash needs. The credit line is secured by the short term deposits
      in
      US dollars with UBS, amounting to $3,155,000 at June, 30, 2007. The credit
      line
      bears interest at the rate of 4.75%. The credit line can be cancelled by either
      party at any time. As June 30, 2007, the credit line was not used.





SES
      Switzerland also has a Construction Credit Agreement with Banque Cantonale
      de
      Genève in the amount of $3,906,218, which is intended for financing the
      construction of our new manufacturing facility. This credit line must be drawn
      down before the later of the completion of the construction or June 30, 2008.
      The construction loan bears interest at a rate of 3.25% and has not been
      utilized. The loan is secured by a mortgage on the construction.





On
      December 20, 2006, SES Switzerland signed a construction loan with Ms. Christine
      Erné, the Company's principal stockholder and a director, to enable SES
      Switzerland to commence construction of our new manufacturing facility. The
      construction loan is in the amount of $2,197,248. The Company will pay interest
      at the rate of 4.5%. The funds will be disbursed as soon as construction has
      begun. The term of the loan is two years.





The
      ability of our Company to meet our financial commitments is primarily dependent
      upon the continued extension of credit by our creditors, the continued financial
      support of our directors and stockholders, the continued issuance of equity
      to
      new stockholders, and our ability to achieve and maintain profitable operations.
      Our Company raised and received additional capital of $8,681,081 between May
      30,
      2006 and November 22, 2006 in connection with the closing of three private
      placement transactions.





Management
      believes that our Company's cash and cash equivalents, cash provided by
      operating activities, and cash received in the equity financings will be
      sufficient to meet our working capital requirements for the next twelve months.
      We anticipate incurring capital expenditures during the fiscal year ending
      December 31, 2007 in the amount of $8,544,852 to construct our new manufacturing
      facility and in the amount of $2,441,386 to purchase new machinery. We
      anticipate financing these expenditures through current debt financing and
      available cash.





21




**Operating
      Activities**





Operating
      activities used net cash of $195,264 for the six months ended June 30, 2007,
      as
      compared to $314,785 used in operating activities for the six months ended
      June
      30, 2006. The net cash used in operating activities was mainly attributable
      to consultant fees, salaries, rents, and other general and administrative
      expenses.  The variation between 2007 and 2006 is due to the higher net
      loss for the six months ended June 30, 2007.




**Investing
      Activities**




Net
      cash used in investing activities was $290,795 for the six months
      ended June 30, 2007, as compared to $16,376 used in investing activities
      for the six months ended June 30, 2006. The increase in investing
      activities was largely due to investments for the construction of the plant
      and
      advances on machinery.





**Financing
      Activities**




Net
      cash
      provided by financing activities was $0 for the six months ended June 30, 2007,
      as compared to financing activities which provided cash of $340,818 for the
      six
      months ended June 30, 2006.





The
      cash
      received in 2006 was mainly the result of proceeds from loans.




**Off-Balance
      Sheet Arrangements**




Our
      Company has no outstanding derivative financial instruments, interest rate
      swap
      transactions or foreign currency contracts. Our Company does not engage in
      trading activities involving non-exchange traded contracts.




At
      June
      30, 2007, the Company has an outstanding purchase order of EUR448,600
      (approximately $604,452, using the exchange rate of 0.74216 at June 30, 2007)
      for the future construction of a new machine to be used in the new plant for
      solar modules production. A letter of credit in the amount of EUR224,300
      ($302,226, using the exchange rate of 0.74216 at June 30, 2007) has been issued
      by SES Switzerland's bank as a partial guarantee of payment. There were no
      charges by the bank to the Company for the letter of credit. The
      Company has made an advance of EUR67,290 ($88,755) for the purchase of
      this machine. The balance due will be paid upon delivery of the
      machine.





22




**ITEM
      3** . **CONTROLS AND PROCEDURES**





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in Company reports filed or
      submitted under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and forms. Disclosure controls and procedures include, without limitation,
      controls and procedures designed to ensure that information required to be
      disclosed in Company reports filed under the Exchange Act, is accumulated and
      communicated to management, including the Company’s principal executive officer
      and principal financial officer, as appropriate, to allow timely decisions
      regarding required disclosure.




As
      required by Rule 13a-15 under the Exchange Act, the Company is required to
      carry
      out an evaluation of the effectiveness of the design and operation of the
      Company’s disclosure controls and procedures as of the end of the period covered
      by this report. This evaluation was carried out with the participation of the
      Company’s principal executive officer and principal financial officer. Based
      upon that evaluation, the Company’s principal executive officer and principal
      financial officer concluded that the Company’s disclosure controls and
      procedures are effective at the reasonable assurance level such that the
      information relating to us and our consolidated subsidiary required to be
      disclosed in our Exchange Act reports (i) is recorded, processed, summarized
      and
      reported within the time periods specified in the SEC’s rules and forms, and
      (ii) is accumulated and communicated to our management, including our principal
      executive officer and principal financial officer, as appropriate to allow
      timely decisions regarding required disclosure.




There
      were no changes in the Company’s internal controls over financial reporting that
      occurred during the quarter ended June 30, 2007 that have materially affected,
      or are reasonably likely to materially affect, the internal control over
      financial reporting.





23




**PART
      II** - **OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





None.




**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**





None.




**ITEM
      5.**  **OTHER
      INFORMATION**





None.




24




**ITEM
      6. EXHIBITS**





(a)
      The
      following exhibits are filed as part of this report:




Exhibit
                No.
            
            Description




31.1
            Rule
                13a-14(a)/15d-14(a) Certification*




31.2
            Rule
                13a-14(a)/15d-14(a) Certification*




32.1
            Section
                1350 Certification*




32.2
            Section
                1350 Certification*





25




**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities and
      Exchange Act of 1934, the registrant has duly caused this report to be
      signed on its behalf by the undersigned, thereunto duly authorized.


SES
                SOLAR, INC.
              (Small
                Business Issuer)Dated:
                August 9, 2007
            By:
            /s/
                SANDRINE CRISAFULLISandrine
                Crisafulli
              Chief
                Financial Officer and Chief Operating Officer
              (principal
                financial officer and principal accounting
              officer)




26