**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**










**FORM 10-Q**




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




**FOR
      THE QUARTERLY PERIOD ENDED MARCH 31, 2008**




**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 REGISTRANT 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**


(REGISTRANT'S
      TELEPHONE NUMBER, INCLUDING AREA CODE)









Indicate
      by check mark 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 þ 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
      the definitions 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  ̈ Smaller
      reporting company þ




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





The
      number of shares outstanding of each of the issuer's classes of stock as of
      May
      15, 2008 is 73,081,168 shares of common stock, par value $.001 per
      share.








TABLE
      OF
      CONTENTS


PagePART
                  I
              FINANCIAL
                  INFORMATION
              
              1ITEM
                  1.
              FINANCIAL
                  STATEMENTS
              
              1ITEM
                  2.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS AND
                  PLAN OF OPERATIONS
              
              12ITEM
                  3.
              QUALITATIVE
                  AND QUANTITATIVE DISCLOSURES ABOUT MARKET
                  RISK
              
              17ITEM
                  4T.
              CONTROLS
                  AND PROCEDURES
              
              17PART
                  II
              OTHER
                  INFORMATION
              
              18ITEM
                  6.
              EXHIBITS
              
              18




i


**PART
      I****FINANCIAL
      INFORMATION**




**ITEM
      1.**  **FINANCIAL
      STATEMENTS**




**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEETS**


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


**March
                31st**
              **2008**
            
            **December
                31st**
              **2007****(unaudited)****ASSETS
                (in $)**Current
                Assets:Cash
                and cash equivalents
            
            
            3,399,369
            
            
            3,429,033Receivables,
                net of allowance for doubtful accounts of $0 for the periods ended
                2008
                and 2007
            
            
            105,487
            
            
            47,356Due
                from related party
            
            
            96,136
            
            
            84,938Inventory
            
            
            307,627
            
            
            271,794Other
                current assets
            
            
            785,149
            
            
            639,763**Total
                current assets**
            
            
            **4,693,768**
            
            
            **4,472,884**Long-Term
                Assets:Deferred
                expense
            
            
            120,000
            
            
            180,000Advance
                payments for machinery
            
            
            425,273
            
            
            396,432**Total
                other long-term assets**
            
            
            **545,273**
            
            
            **576,432**Property
                and Equipment, at cost,
            
            
            497,715
            
            
            437,493Solar
                Plant
            
            
            4,284,593
            
            
            3,785,521Building
                construction
            
            
            6,495,759
            
            
            5,398,153Less
                accumulated depreciation and amortization
            
            
            (455,281
            )
            
            (339,014
            )**Total
                fixed assets**
            
            
            **10,822,786**
            
            
            **9,282,153****Total
                long-term assets**
            
            
            **11,368,059**
            
            
            **9,858,585****Total
                assets**
            
            
            **16,061,827**
            
            
            **14,331,469****LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**Current
                Liabilities:Short-term
                loan
            
            
            7,423,796
            
            
            6,147,728Accounts
                payable
            
            
            609,114
            
            
            3,711,775Billings
                in excess of cost and estimated earnings
            
            
            562,985
            
            
            507,044**Total
                current liabilities**
            
            
            **8,595,895**
            
            
            **10,366,547**Long-Term
                Liabilities:Loan
                payable
            
            
            0
            
            
            0Construction
                loan
            
            
            4,073,801
            
            
            7,563**Total
                long-term liabilities**
            
            
            **4,073,801**
            
            
            **7,563**Stockholders'
                Equity:Common
                stock, $0.001 par value;
            
            
            73,081
            
            
            73,081100,000,000
                shares authorized;73,081,168
                shares issued and outstandingAdditional
                paid-in capital
            
            
            8,050,093
            
            
            8,050,093Accumulated
                other comprehensive income (loss)Translation
                adjustment
            
            
            (748,150
            )
            
            (395,447
            )Year
                end accumulated deficit
            
            
            (3,982,893
            )
            
            (3,770,368
            )**Total
                stockholders' equity (deficit)**
            
            
            **3,392,131**
            
            
            **3,957,359****Total
                Liabilities and Stockholders' Equity**
            
            
            **16,061,827**
            
            
            **14,331,469**




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




1


**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**


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





**Three
                Months Ended March 31****2008**
            
            **2007****(unaudited)**
            
            **(unaudited)**Revenue:Revenue
            
            
            83,138
            
            
            0Cost
                of goods sold (exclusive of depreciation shown separately
                below)
            
            
            0
            
            
            0Costs
                and Expenses:Personnel
            
            
            138,427
            
            
            85,385Rent
                and Leases Expenses
            
            
            36,751
            
            
            32,770Research
                and Development
            
            
            152,832
            
            
            110,473Other
                general and administrative
            
            
            201,042
            
            
            190,625Depreciation
                and amortization
            
            
            66,656
            
            
            12,596Total
                costs and expenses
            
            
            **595,708**
            
            
            **431,849**Other
                Income and Expense:Interest
                expense
            
            
            (118,143
            )
            
            (12,969
            )Interest
                income
            
            
            22,645
            
            
            48,500Foreign
                Exchange Gain
            
            
            395,543
            
            
            4,701Total
                Other Income
            
            
            **300,045**
            
            
            **40,232**Loss
                before taxes
            
            
            (212,525
            )
            
            (391,617
            )Income
                taxes
            
            
            0
            
            
            0Net
                Loss
            
            
            **(212,525**
            **)**
            
            **(391,617**
            **)**Other
                Comprehensive Loss/Income:Translation
                adjustment
            
            
            (352,703
            )
            
            (3,716
            )Comprehensive
                loss
            
            
            (565,228
            )
            
            (395,334
            )Basic
                and diluted Weighted Average Shares
            
            
            73,081,168
            
            
            48,937,761Basic
                and diluted Net Loss Per Share
            
            
            **(0.003**
            **)**
            
            **(0.008**
            **)**




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





2


**SES
      SOLAR INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


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





**Three
                Months Ended March 31,****2008**
            
            **2007****(unaudited)**
            
            **(unaudited)**Cash
                Flows from Operating Activities:Net
                loss
            
            
            (212,525
            )
            
            (391,617
            )Adjustments
                to reconcile net loss to cash used in operating
                activities:Depreciation
                and amortization
            
            
            66,656
            
            
            12,596Changes
                in operating assets and liabilities:(Increase)
                decrease in:Receivables,
                including Due from Related Party
            
            
            (48,324
            )
            
            0Inventory
            
            
            0
            
            
            0Other
                current assets
            
            
            (57,370
            )
            
            4,222Deferred
                Expenses
            
            
            60,000
            
            
            60,000Increase
                (decrease) in:Accounts
                payable and accrued expenses
            
            
            90,162
            
            
            (125,808
            )Billings
                in excess of cost and estimated earnings
            
            
            (10,157
            )
            
            (93,381
            )**Net
                cash used in operating activities**
            
            
            **(111,558**
            **)**
            
            **(533,988**
            **)**Cash
                Flows from Investing Activities:Property,
                plants and equipment
            
            
            (3,772,295
            )
            
            (163,716
            )Advance
                payments for machinery
            
            
            0
            
            
            (58,706
            )**Net
                cash used in investing activities**
            
            
            **(3,772,295**
            **)**
            
            **(222,422**
            **)**Cash
                Flows from Financing Activities:Repayment/Proceed
                of loans
            
            
            3,785,988
            
            
            0Bank
                loan
            
            
            433,590
            
            
            0**Net
                cash provided by financing activities**
            
            
            **4,219,578**
            
            
            **0**Increase
                (decrease) in cash and cash equivalents
            
            
            335,725
            
            
            (756,410
            )Effect
                of exchange rate changes on cash
            
            
            (365,389
            )
            
            (8,116
            )Cash
                and cash equivalents, beginning of the quarter
            
            
            3,429,033
            
            
            6,016,666Cash
                and cash equivalents, end of the quarter
            
            
            3,399,369
            
            
            5,252,140Supplemental
                cash flow informationCash
                paid for interest
            
            
            118,143
            
            
            12,969Supplementaldisclosureof
                non-cash operating and investing activitiesNon
                cash transaction, Property, plants and equipment in account
                payable
            
            
            144,970
            
            
            0




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




3




**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 of SES USA in the transaction. The historical financial statements
      prior to September 27 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.




**2.
      Plan of Operations**




SES
      Switzerland has experienced losses from operations and anticipates incurring
      losses in the near future. SES Switzerland has, however, developed and patented
      a new assembly technology for solar panels, which allow higher quality
      electrical contacts, better performance and reduced manufacturing costs
      resulting from the increased automation processes.





SES
      Switzerland’s current 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. These activities require the Company
      to
      design and manufacture prototype panels, have them approved in accordance with
      European and other standards, manufacture 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 process are operational.





**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 fiscal year ended December 31,
      2007. 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


**SES
        SOLAR INC. AND SUBSIDIARY**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**





**4.
      Summary of Significant Accounting Policies**




The
      consolidated 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
      reporting currency of SES USA is the U.S. dollar whereas SES Switzerland’s
      functional currency is the Swiss Franc (CHF). The financial statements of SES
      Switzerland are translated to U.S. dollar equivalents 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
            
            2008
            
            2007CHF
            
            CHF$
            
            
            1.06789
            
            
            1.23311




2008
            
            2007Balance
                Sheet period-end rates
            
            CHF
            
            CHF$
            
            
            0.99454
            
            
            1.12566




*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 stock options 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 stock options for periods in which the options’
exercise price is lower than the Company’s average share price for the period.




**Three
                  Months Ended**
                **March
                  31,****2008**
              
              **2007**Basic
                  Weighted average shares outstanding
              
              
              73,081,168
              
              
              48,937,761Diluted
                  weighted average shares outstanding
              
              
              73,081,168
              
              
              48,937,761




5




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**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 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 March 31, 2008 balance sheet date, 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. No unbilled revenue has been recognized so far.




For
      the
      three months ended March 31, 2008 and 2007, the Company has no billed or
      unbilled amount representing claims or other similar items subject to
      uncertainty concerning their determination or ultimate realization.




In
      January 2008, the Company commenced sales of photovoltaic electricity produced
      by solar modules on the roof of its new manufacturing facility to a local
      utility in Geneva. Revenues from such sales are recognized monthly based on
      the
      amount of electricity produced, which can vary greatly depending on the weather
      and the seasons.





**Impact
      of Recently Issued Accounting Pronouncements**




In
      December 2007, the FASB issued SFAS No. 141(R), *“* Business
      Combinations.” SFAS 141(R) requires all business combinations completed
      after the effective date to be accounted for by applying the acquisition method
      (previously referred to as the purchase method). Companies applying this method
      will have to identify the acquirer, determine the acquisition date and purchase
      price and recognize at their acquisition-date fair values the identifiable
      assets acquired, liabilities assumed, and any noncontrolling interests in the
      acquiree. In the case of a bargain purchase the acquirer is required to
      reevaluate the measurements of the recognized assets and liabilities at the
      acquisition date and recognize a gain on that date if an excess remains.
      SFAS 141(R) becomes effective for fiscal periods beginning after
      December 15, 2008. The Company is currently evaluating the impact of
      SFAS 141(R).





In
      September 2006, the Financial Accounting Standards Board (FASB) issued Statement
      No. 157, “Fair Value Measurements” (SFAS No. 157).
      SFAS No. 157 defines fair value for financial accounting and reporting
      purposes, establishes a framework for measuring fair value and expands
      disclosures about fair value measurements but does not change the requirements
      to apply fair value in existing accounting standards. Under SFAS No. 157,
      fair value refers to the price that would be received to sell an asset or paid
      to transfer a liability in an orderly transaction between market participants
      in
      the principal or, in the absence of a principal, the most advantageous market.
      The standard clarifies that fair value should be based on the assumptions market
      participants would use when pricing the applicable asset or
      liability.




6




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**




SFAS
      No. 157 was effective and adopted by the Company as of January 1,
      2008. The provisions of SFAS No. 157 are being applied prospectively. The
      adoption of SFAS No. 157 did not have a material impact on the Company’
results of operations, cash flows or financial positions. See Note 17 — Fair
      Value of Financial Assets and Liabilities for additional information regarding
      the adoption of SFAS No. 157.




In
      February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2, “Effective
      Date of FASB Statement No. 157” (FSP FAS 157-2), which delays the effective
      date of SFAS No. 157 for all nonrecurring fair value measurements of
      nonfinancial assets and liabilities until fiscal years beginning after
      November 15, 2008. The Company have elected to defer the adoption of the
      nonrecurring fair value measurement disclosures of nonfinancial assets and
      liabilities. The adoption of FSP FAS 157-2 is not expected to have a material
      impact on the Company’s results of operations, cash flows or financial
      positions.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities — Including an Amendment of FASB
      Statement No. 115” (SFAS No. 159). SFAS No. 159 allows
      an entity to irrevocably elect fair value for the initial and subsequent
      measurement of certain financial instruments and other items that are not
      currently required to be measured at fair value. When the fair value option
      is
      elected and a company chooses to record eligible items at fair value, the
      company must report unrealized gains and losses on those items in results of
      operations at each subsequent reporting date. Additionally, the transition
      provisions of SFAS No. 159 permit a one-time election for existing
      positions at the adoption date, with a cumulative-effect adjustment included
      in
      opening retained earnings. All future changes in fair value will be reported
      in
      results of operations. Prior to this election, only the unrealized losses were
      recorded in the results of operations. The adoption of FSP FAS 159 is not
      expected to have a material impact on the Company’s results of operations, cash
      flows or financial positions.




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements” (SFAS No. 160). SFAS No. 160
      clarifies that a noncontrolling interest in a subsidiary is an ownership
      interest in the consolidated entity that should be reported as equity in the
      consolidated financial statements. SFAS No. 160 requires that changes in a
      parent's ownership interest in a subsidiary be reported as an equity transaction
      in the consolidated financial statements when it does not result in a change
      in
      control of the subsidiary. When a change in a parent's ownership interest
      results in deconsolidation, a gain or loss should be recognized in the
      consolidated financial statements. SFAS No. 160 must be applied
      prospectively as of January 1, 2009, except for the presentation and
      disclosure requirements, which are required to be applied retrospectively for
      all periods presented. The adoption of SFAS No. 160 will not have a
      material impact on the Company’s results of operations, cash flows or financial
      positions; however, it could impact future transactions entered into by the
      Company.




In
      March
      2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
      Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
      (SFAS No. 161). SFAS No. 161 amends and expands the disclosure
      requirements of SFAS No. 133, "Accounting for Derivative Instruments and
      Hedging Activities" (SFAS No. 133), by requiring enhanced disclosures about
      how and why an entity uses derivative instruments, how derivative instruments
      and related hedged items are accounted for under SFAS No. 133 and its
      related interpretations, and how derivative instruments and related hedged
      items
      affect an entity's financial position, financial performance, and cash flows.
      SFAS No. 161 requires qualitative disclosures about objectives and
      strategies for using derivatives, quantitative disclosures about fair value
      amounts of and gains and losses on derivative instruments, and disclosures
      about
      credit-risk-related contingent features in derivative agreements. SFAS
      No. 161 will be effective for the Company as of January 1, 2009. As
      SFAS No. 161 provides only disclosure requirements, the adoption of this
      standard will not have a material impact on the Company’s results of operations,
      cash flows or financial positions.




7




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**5.
      Inventory**




Inventory
      is summarized as follows:




****
            
            3/31/2008
            
            12/31/2007$
            
            $Raw
                Materials and Others
            
            
            109,969
            
            
            97,159Finished
                Goods
            
            
            197,658
            
            
            174,635**Total
                Inventory**
            
            
            **307,627**
            
            
            **271,794**





**6.
      Borrowings Under Revolving Credit Facility, Short and Long-Term
      Loan**




Short-Term
                Loan
            
            3/31/2008
            
            12/31/2007Geneva
                (Switzerland) State Department of Energy
            
            
            974,792
            
            
            861,248Geneva
                (Switzerland) State Department of Energy
            
            
            4,524,705
            
            
            3,997,665UBS
            
            
            1,924,299
            
            
            1,288,8157,423,796
            
            
            6,147,728





Long-Term
                Loan
            
            3/31/2008
            
            12/31/2007Banque
                Cantonale de Genève
            
            
            3,068,311
            
            
            7,563Geneva
                (Switzerland) State Department of Energy
            
            
            1,005,490
            
            
            04,073,801
            
            
            7,563





On
      November 3, 2003, SES Switzerland received a loan from the Geneva (Switzerland)
      State Department of Energy (“ScanE”) of up to CHF1,000,000 ($1,005,490). The
      loan bears interest at a rate of 4%. SES Switzerland used CHF969,470 ($974,792)
      as at March 31, 2008, and CHF969,470 ($861,248) as at December 31, 2007. The
      loan, which is secured by 10,000,000 shares of common stock pledged by
      Christiane Erné, Jean-Christophe Hadorn and Claudia Rey pursuant to the Canton
      Geneva Escrow Agreement, became due on March 31, 2008. Although the loan matured
      on such date, the Company filed a request with ScanE to renew the loan for
      a
      period of 24 months on the same terms. ScanE has indicated to the Company that
      it intends to grant such renewal under the same terms for an additional 24
      month
      period. Although a formal decision by ScanE has not yet been made, the Company
      is confident that the loan will be renewed in accordance with its
      request.




SES
      Switzerland was also granted a loan by ScanE in the amount of CHF500,000
      ($502,745) on January 21, 2004 with the funds to be made available
      contingent upon SES Switzerland’s meeting certain conditions precedent, which
      were fulfilled by March 22, 2006. The loan had a term of 18 months and carried
      an interest rate of 5% with repayment due on September 21, 2007. Also on January
      21, 2004, an additional credit facility of CHF 1 million ($1,005,490) was
      granted to finance the construction of our new manufacturing facility. Release
      of the loan proceeds was contingent upon the Company satisfying certain
      conditions precedent, which were fulfilled by November 13, 2007. As of January
      8, 2008, we had utilized the full amount of the loan, which a fixed annual
      interest rate of 4%. The loan has a duration of 20 years and is secured by
      a
      mortgage certificate of CHF1,000,000 ($1,005,490) on the manufacturing facility.
      The loan will be reimbursed in 20 equal annual installments of CHF73,581.75
      (approximately $74,000).




8




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





A
      six
      month credit facility of CHF4,500,000 ($4,524,705 as of March 31, 2008 and
      $3,977,665 as of December 31, 2007) was signed on September 18, 2007 with ScanE.
      The loan bears interest at 5%. The proceeds were received on October 1, 2007
      and
      became due on March 17, 2008. ScanE
      has
      extended the loan until June 20, 2008 under the existing loan agreement. This
      loan is secured by certain photovoltaic modules that are installed on the roof
      of the new manufacturing facility as well as by the 10,000,000 shares currently
      held in escrow.




SES
      Switzerland also has a revolving credit line with UBS which was increased from
      CHF100,000 ($100,549) to CHF3,000,000 ($3,016,470) as of January 31, 2008,
      used
      mainly to cover short-term cash needs. The revolving credit line is secured
      by
      the short term deposits in US dollars with UBS, amounting to $3,155,000 as
      at
      March 31, 2008 and has not an expiration date. The credit line bears interest
      at
      the rate of 4.75%. The credit line can be cancelled by either party at any
      time.
      The credit facility was used for CHF1,913,793 ($1,924,299) as at March 31,
      2008
      and CHF1,450,764 ($1,288,815) as at December 31, 2007.




SES
      Switzerland also has a Construction Credit Agreement with Banque Cantonale
      de
      Genève (BCGE) dated December 20, 2006 in the amount of $4,826,352 (CHF4.8
      million), which is intended for financing the construction of the new
      manufacturing facility. The loan was amended on November 13, 2007 and increased
      from CHF4.8 million to CHF8.5 million ($8,546,665). The amended agreement must
      be drawn down before the later of completion of the construction or December
      11,
      2008. We used $3,068,311 (CHF3,051,558) of the loan as at March 31, 2008, and
      $7,563 (CHF8,513) as at December 31, 2007. The loan bears interest at a rate
      of
      3.5% and is secured by a second lien exclusive mortgage certificate of CHF
      9,000,000 ($9,049,410) on the manufacturing facility.




**7.
      Commitments and Contingencies**




*Operating
      Leases* -
      Lease expenses for the three months ended March 31, 2008 and 2007 were $36,751
      and $32,770, respectively.




The
      following table presents future minimum lease commitments (concerning the lease
      of a vehicle) under operating leases at March 31, 2008:




**Operating**
              **Leases****$**2008****
            
            
            12,5492009
            
            
            14,032Thereafter
            
            
            -**Total**
            
            
            **26,581**





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 rent is CHF52,572 ($49,230) per year.
      The
      initial lease term ended on February 28, 2008. The lease has been renewed with
      the same conditions for the next 12 months.




SES
      Switzerland also leases a 1,654 square meter industrial facility in Härkingen,
      Switzerland. The monthly fixed rent is CHF7,232 (approximately $6,772). The
      lease has no specific termination date. The lease may be cancelled with six
      months notice at the end of the month, except for 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 their 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.




9




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





The
      following are the lease commitments:




**Use
                of Land****$**2008
            
            
            50,6132009
            
            
            67,4842010
            
            
            67,4842011
            
            
            67,4842012
            
            
            67,484Thereafter
            
            
            3,610,390**Total**
            
            
            **3,930,939**




SES
      Switzerland has no non-cancellable operating leases.




*Litigation* - The
      Company is from time to time subject to routine litigation incidental to its
      business. There are no such litigation currently pending.




*Capital
      Commitments* - At
      March 31, 2008, the Company has an outstanding purchase order of EUR448,600
      ($708,790) for the future construction of a new machine to be used in the new
      plant for solar modules production. The Company has made an advance
      payment of EUR269,160 ($425,273) for the purchase of this machine. The
      balance due will be paid upon delivery of the machine. On March 27, 2008 the
      Company signed a purchase agreement for the manufacturing of the exterior walls
      of the new plant for CHF 2,800,000 ($ 2,815,372). An advance payment of
      CHF840,000 ($844,612) was made on April 1, 2008, the remaining amount will
      be
      paid at the end of the construction.




**8.
      Business Segments**




All
      of
      the Company’s operations until the fiscal year ended 2007 were conducted through
      its wholly owned subsidiary, SES Switzerland, and were limited to the assembly
      and installation of photovoltaic panels in Switzerland, which is the only
      business segment of the Company. Commencing January 2008, the Company now also
      sells photovoltaic electricity produced by the solar modules on the roof of
      its new manufacturing facility to a local utility in Geneva, based on a 20
      year
      contract. The revenue generated from such electricity production represents
      a
      new business segment for the Company. No costs of goods sold are recorded in
      the
      income statement for the three months ended March 31, 2008 due to the fact
      that
      in the first quarter of 2008, the Company’s only revenue consisted of sales of
      electricity produced by these solar tiles and sold to a local utility in Geneva.
      The solar plant and the six month credit facility of CHF 4.5 million dated
      September 18, 2007 are the sole assets and liabilities, respectively, that
      comprise the electricity producing business segment.





**9.**  **Stockholders'
      Equity**





*Common
      Stock* - The
      Company has 100,000,000 shares of common stock authorized, par value $0.001
      per
      share, and 73,081,168 shares issued and outstanding.




During
      the quarter ended March 31, 2008, no stock purchase warrants were
      exercised.




10




**SES
      SOLAR INC. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





Warrant
      transactions consisted of the following during the quarter ended March 31,
      2008 :




**Exercisable
                Warrants**
            
            **Strike
                Price**Warrants
                outstanding as of December 31, 2007
            
            
            0
            
            $
            0Warrants
                granted as consideration for agent's fee
            
            
            1,500,000
            
            $
            0.90Exercise
                of warrants
            
            
            0
            
            
            0Warrants
                outstanding as of March 31, 2008
            
            
            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 Lansing Securities 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 SEC 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.




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 Financial (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 Financial at closing. The Company recorded the
      total amount as of March 31, 2008, as deferred expense and amortizes the amount
      over the 24 months of the consulting agreement.




**10.
      Subsequent Events**




Other
      than as disclosed herein, no major events have occurred since March 31,
      2008.




11


**ITEM
      2.****MANAGEMENT'S
      DISCUSSION AND ANALYSIS AND PLAN 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,
      2007. 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 Form10-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, producing and installing solar panels or modules and solar tiles
      for generating electricity. We have developed a new assembly technology for
      solar panels that allow for higher quality electrical contacts, better
      performance and reduced costs resulting from our proprietary automation
      processes. We are constructing 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 assembly technology, we have been
      developing the sales and distribution portions of our business by selling solar
      panels produced by third parties and by responding to quotations for our solar
      tiles to electric companies, local governmental agencies and private home
      owners.





**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, our wholly owned subsidiary, has developed and patented 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 enable us to
      produce customized solar photovoltaic (“PV”) 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,
      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 only limited revenue from the sale of solar panels or modules
      and solar tiles manufactured by third parties and the related engineering
      services required to design and install the same. Once our manufacturing
      capabilities are operational, we will have available a product line for our
      SunTechTile® and Swisstile® ** solar
      tiles and in the future for a high power rated solar modules. Historically,
      we
      have relied upon third party vendors to supply us with component parts such
      as
      cells in order to manufacture and produce our products. As a result of our
      new
      manufacturing facility and our new proprietary technology for module assembly,
      we believe that we are positioning ourselves to manufacture and produce on
      a
      much larger scale solar products that are competitive in the solar energy
      market. In addition, and commencing January 2008, the Company also sells
      electricity produced by the solar PV modules on the roof of its new
      manufacturing facility to a local utility in Geneva.





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 custom 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 our
      new
      products manufactured through the new assembling processes are
      operational.




12




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 16.4 trillion kilowatt hours in
      2004 to 30.3 trillion kilowatt hours in 2030. 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 U.S. 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.
      As the cost of producing electricity from grid connected PV installations is
      higher than the current cost of electricity from fossil or nuclear plants,
      the
      PV market relies heavily on government subsidies and regulation concerning
      independent power producers. These regulations favor PV electricity in some,
      but
      not all, countries. Existing regulations are subject to change due to local
      political factors affecting the energy market, especially in Europe, where
      the
      process has been ongoing for 10 years. The major PV market in Europe is Germany
      where the EEG law governs. We expect France will play a strong role in the
      future due to recently enacted laws. Other countries, including Italy, Spain
      and
      Greece, have similar but less favorable laws. The PV market is heavily dependent
      on public policies and, as a result, such policies present the greatest
      uncertainties for our products. Anticipated reductions of the feed-in tariff
      in
      Germany and Switzerland by 9% or 8%, respectively, per year could affect our
      sales. Spain has already spoken of decreasing the tariff during 2008 by
      20%. Without continued and/or enhanced governmental support in the form of
      favorable laws and subsidies, the projected growth of the PV market will not
      exist. Our primary market for our Swisstile® product will be Switzerland, which
      recently enacted a new feed in tariff that become effective May 2008. This
      tariff has 10 different values depending on PV integration and size. Due to
      the
      properties of our Swisstile®, we believe that it will get the highest value,
      which will be favorable for us. The tariff will decrease for new entrants by
      8%
      every year starting in 2010.





Worldwide,
      annual installations by the PV industry grew from 0.4GW in 2002 to 1.7GW in
      2006, representing an average annual growth rate of over 42%, and 2.9 GW at
      the
      end of 2007, representing a 70% increase in one year. Cumulative installed
      capacity reached just below 10GW at the end of 2007. Despite this growth, 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 government 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. Furthermore, even within the solar energy area, it is possible that
      developments in thin films or nanoscience could reduce the cost of PV cells
      or
      that continued shortages in the supply of polysilicon, an essential raw material
      in the production of our PV cells, could impact our proposed new products and
      adversely affect our plan of operation.




We
      are in
      ongoing discussions with strategic partners, including cell manufacturers,
      PV
      line manufacturers and special machine manufacturers to assist us with our
      new
      technology for module assembly. We are also progressing with construction of
      our
      new manufacturing facility, which is expected to be fully operational in late
      2008 or early 2009.




During
      the three month period ended March 31, 2008, we continued to market our solar
      tiles, and we quoted solar PV turn-key installations to prospects , although
      no
      projects were completed such that no revenues or costs of goods sold were
      recorded during the period. As of the end of fiscal year 2007, the Solar Plant,
      which comprises our manufacturing facility, is operational, and, as of January
      2008, we have begun generating revenue from the sale of electricity produced
      by
      the modules on the roof of the manufacturing facility.





Based
      on current and ongoing custom installation projects that will be completed
      during fiscal year 2008 as well as from the revenue that will be generated
      from
      the sale of electricity produced by the solar modules on the roof of the
      manufacturing facility to the local utility in Geneva, we believe that our
      cash
      flow from operating activities during 2008 will be greater than our cash flow
      from operating activities during 2007. As previously reported, and in light
      of
      these projects and our new electricity production revenue stream, we believe
      that our operating expenses in fiscal 2008 will be approximately $2 million,
      which we anticipate financing through revenue generated from sales and with
      available cash. Management anticipates total capital expenditures of
      approximately $14 million for the new manufacturing facility and $3.5 million
      for the assembly line and machinery over 2008 and 2009. We anticipate financing
      these capital expenditures through available cash, loans and lines of credit,
      but we will likely also need additional financing to expand our operations
      once
      our manufacturing facility is fully operational. We do not have any current
      agreements in place to secure such financing. In addition, we entered into
      a
      credit facility of CHF4,500,000 ($4,524,705) on September 18, 2007 with ScanE.
      The proceeds were received on October 1, 2007 and became due on March 17, 2008.
      ScanE has extended the loan repayment period until June 20, 2008.




13





We
      expect
      to continue to experience losses from operations until we can generate revenue
      from manufacturing our new products. As a result of our continuing need to
      expand our operations and develop and market our new products, we expect to
      continue to need additional capital over the long term in order to continue
      as a
      going concern.




**Selected
      Financial Data**




*Balance
                Sheets*
            
            March
                31,
              2008
            
            December
                31,
              2007**(unaudited)**
            
            **(audited)**in
                $Total
                current assets
            
            
            4,693,768
            
            
            4,472,884Total
                long-term assets
            
            
            11,368,059
            
            
            9,858,585Total
                current liabilities
            
            
            8,595,895
            
            
            10,366,547Total
                long-term liabilities
            
            
            4,073,801
            
            
            7,563Total
                liabilities and stockholders' equity
            
            
            16,061,827
            
            
            14,331,469





**Statement
        of Operations (unaudited)**


For
                the Three months ended
              March
                31,2008
            
            2007in
                $Total
                revenues
            
            
            83,138
            
            
            0Total
                cost of goods sold (exclusive of depreciation shown separately
                below)
            
            
            (0
            )
            
            (0
            )Personnel
            
            
            138,427
            
            
            85,385Rent
                and lease expenses
            
            
            36,751
            
            
            32,770Research
                and development
            
            
            152,832
            
            
            110,473Depreciation
                and amortization
            
            
            66,656
            
            
            12,596General
                and administrative expenses
            
            
            201,042
            
            
            190,625Interest
                expense
            
            
            (118,143
            )
            
            (12,969Interest
                income
            
            
            22,645
            
            
            48,500Foreign
                exchange gain /(loss)
            
            
            395,543
            
            
            4,701Total
                other income (expense)
            
            
            300,045
            
            
            40,232Taxes
            
            
            (0
            )
            
            (0Net
                loss
            
            
            (212,525
            )
            
            (391,617Other
                comprehensive income: translation adjustment
            
            
            (352,703
            )
            
            (3,716Comprehensive
                loss
            
            
            (565,228
            )
            
            (395,333




14




**RESULTS
      OF OPERATIONS - COMPARISON OF THREE MONTHS ENDED MARCH 31, 2008 AND
      2007**




**Net
      Loss** ****




Our
      net loss for the three months ended March 31, 2008 was $212,525 compared to
      a
      net loss of $391,617 for the three months ended March 31, 2007. The decrease
      in
      net loss during the period ended March 31, 2008 was due to the revenue generated
      by the sale of electricity in the amount of $83,138 and to the decrease of
      the
      currency exchange rate between the Swiss franc and the US dollar resulting
      in a
      foreign exchange gain of $395,543, and offset by an increase in operating
      expenses ($163,859) and an increase of interest expense due to increased
      borrowings ($105,174).





**Revenues
      and Cost of Goods Sold** ****




The
      Company recognizes revenue on the completed-contract method, and therefore
      when
      projects are completed. No projects were completed during the three months
      ended
      March 31, 2008 or 2007, and therefore no revenue or costs of goods sold was
      recorded for the respective periods from completion of such
      projects




The
      solar
      plant, which is housed in our manufacturing facility, has been operational
      since
      the end of 2007, and as of January 2008, it now generates revenue through the
      sale of electricity. For the three months ended March 31, 2008, revenue
      generated from such sales totaled $83,138.





**Operating
      Expenses**




Operating
      expenses for the three months ended March 31, 2008 were $595,708
      and $431,849 for the three months ended March 31, 2007, which represents a
      38% increase. Personnel, rent, research and development, general and
      administrative expenses, and depreciation and amortization expenses constitute
      the components of our operating expenses.




The
      majority of the increase was related to personnel costs to develop the new
      activities of our subsidiary (increase of $53,042), additional research and
      development expenses (increase of $42,359), and increased general and
      administrative expenses, including expenses associated with preparation and
      SEC
      compliance of various public filings (increase of $10,416) and depreciation
      and
      amortization (increase of $54,060).




We
      expect
      that as we continue to implement our business plan these expenses will increase
      accordingly.




**Other
      Income (Expense)**




Interest
      expense increased to $118,143 for the three months ended March 31, 2008 compared
      with $12,969 for the three months ended March 31, 2007. The increase in interest
      expense was primarily attributable to the increase of loans from ScanE and
      from
      Banque Cantonale de Genève (“BCGE”).




Interest
      income for the three months ended March 31, 2008 was $22,645 compared to $48,500
      for the three months ended March 31, 2007. The interest income earned during
      the
      period was received from time deposits.




Foreign
      exchange gain for the three months ended March 31, 2008 was $395,543 as compared
      to $4,701 for the three months ended March 31, 2007. Our wholly owned
      subsidiary, SES Switzerland, conducts substantially all its business and incurs
      substantially all its costs in Swiss francs.




**Liquidity
      and Capital Resources**




Our
      principal cash requirements are for operating expenses, including consulting,
      accounting and legal costs, staff costs, and accounts payable.




15




As
      of
      March 31, 2008, we had negative working capital of $3,902,127 compared with
      a
      negative working capital of $5,893,663 as of December 31, 2007, and our cash
      and
      cash equivalents decreased to $3,399,369 as of March 31, 2008 compared to
      $3,429,033 as of December 31, 2007. This decrease is the result of increased
      operating expenses with limited revenues for the period. The large decrease
      in
      Swiss francs is tempered by the evolution of the exchange rate.




As
      of
      March 31, 2008, we had accounts payable of $609,114 compared to
      $3,711,775 **** as of
      December 31, 2007. This large decrease is the result of amounts paid to
      creditors for construction costs relating to our manufacturing facility. We
      made
      these payments utilizing loan proceeds received from BCGE and
      ScanE.




At
      March
      31, 2008, we had short-term debt in the amount of $7,423,796 compared to
      $6,147,728 as of December 31, 2007.




We
      believe that our negative working capital situation is temporary, as we expect
      in the near term to restructure our capital financing arrangements into longer
      term loans with more favorable terms.




We
      currently have several loans outstanding with ScanE. The first such loan in
      the
      amount of up to $1,005,490 was made on November 3, 2003 and carries a principal
      balance of $974,792. The loan bears interest at 4%. Although the loan matured
      on
      March 31, 2008, the Company filed a request with ScanE to renew the loan for
      a
      period of 24 months on the same terms. ScanE has indicated to the Company that
      it intends to grant such renewal request under the same terms for an additional
      24 month period. Although a formal decision by ScanE has not yet been made,
      the
      Company is confident that the loan will be renewed in accordance with its
      request.




On
      January 21, 2004, we obtained a CHF1 million ($1,005,490) credit facility from
      ScanE to finance the construction of our new manufacturing facility. Release
      of
      the loan proceeds was contingent upon the Company satisfying certain conditions
      precedent, which were fulfilled by November 13, 2007. As of January 8, 2008,
      we
      had utilized the full amount of the loan, which a fixed annual interest rate
      of
      4%.




A
      new six
      month credit facility of CHF4,500,000 ($4,524,705) was signed on September
      18,
      2007 with ScanE. The loan bears interest at 5%. The proceeds were received
      on
      October 1, 2007 and were to be reimbursed on March 17, 2008. ScanE has
      extended the loan until June 20, 2008 under the existing loan agreement. This
      loan is secured by certain PV modules that are installed in the power plant
      on the roof of the new manufacturing facility as well as by the 10,000,000
      shares currently held in escrow. However, given that SES is currently
      negotiating the sale of the PV roof installation, reimbursement has been
      postponed pending the result of the sale negotiations.




SES
      Switzerland also has a revolving credit line with UBS which was increased from
      CHF100,000 ($100,549) to CHF3,000,000 ($3,016,470) as of January 31, 2008,
      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 March 31,
      2008 and has not an expiration date. The credit line bears interest at the
      rate
      of 4,75%. The credit line can be cancelled by either party at any time. The
      credit facility was used for CHF1,913,793 ($1,924,299) as at March 31, 2008
      and
      CHF1,450,764 ($1,288,815) as at December 31, 2007.




SES
      Switzerland also has a Construction Credit Agreement with BCGE dated December
      20, 2006 in the amount of $4,826,352 (CHF4.8 million), which is intended for
      financing the construction of our new manufacturing facility. The loan was
      amended on November 13, 2007 and increased from CHF4.8 million to CHF8.5 million
      ($8,546,665). The amended agreement must be drawn down before the later of
      completion of the construction or December 11, 2008. We used $3,068,311
      (CHF3,051,558) of the credit line as at March 31, 2008, and $7,563 (CHF8,513)
      as
      at December 31, 2007. The loan bears interest at a rate of 3.5% and is secured
      by a second lien exclusive mortgage certificate of CHF 9,000,000 ($9,049,410)
      on
      the facility.




Our
      ability to meet our financial commitments in the near term will be primarily
      dependent upon continued revenue from the sale of custom manufactured solar
      panels or modules when available and solar tiles and the related engineering
      services required to design and install the same, the sale of electricity
      produced by the solar roof on our manufacturing facility, and the continued
      extension of credit from existing or new lenders.




16




Management
      believes that our cash and cash equivalents, cash provided by operating
      activities, and cash available from existing loans will be sufficient to meet
      our working capital requirements for the next twelve months. If our future
      revenues do not increase significantly to a level sufficient to cover our net
      losses, we will continue to need to raise additional funds to expand our
      operations. In addition, we may need to raise additional funds sooner than
      anticipated to respond to competitive pressures, to develop new or enhanced
      products or services, to fund our expansion or to make acquisitions. We may
      not
      be able to find financing on acceptable terms or at all.




**Operating
      Activities**




Operating
      activities used net cash of $111,558 for the three months ended March 31, 2008,
      as compared to $533,988 of net cash used in operating activities for the three
      months ended March 31, 2007. In local currency, use of funds for operating
      activities was larger during this period compared to the same period in 2007.
      However the evolution of the exchange rate difference has greatly offset the
      difference. Billings in excess of cost and estimated earnings increased by
      $10,848 due to material purchases.




**Investing
      Activities**




Net
      cash
      used in investing activities was $3,772,295 during the three months ended
      March 31, 2008, as compared to ($222,422) provided in investing activities
      during the three months ended March 31, 2007. The increase in investing
      activities is mostly due to investments for the construction of the
      manufacturing plant.




We
      expect
      total capital expenditure of approximately CHF17,500,000 ($17,596,075) as we
      build our new manufacturing facility and purchase additional
      equipment.




**Financing
      Activities**




Net
      cash
      provided by financing activities was $4,219,578 for the three months ended
      March
      31, 2008, as compared to $0 for the three months ended March 31,
      2007.




The
      increase financing was received from bank loans granted to build the new plant
      from BCGE and ScanE and from cash utilized for current operations from our
      line
      of credit with UBS.




**Off-Balance
      Sheet Arrangements**




We
      have
      no outstanding derivative financial instruments, interest rate swap transactions
      or foreign currency contracts. We do not engage in trading activities involving
      non-exchange traded contracts.




At
      March
      31, 2008, we had an outstanding purchase order of EUR448,600 ($708,790, using
      the exchange rate of 0.63291 at March 31, 2008) for the future construction
      of a
      new machine to be used in the new manufacturing plant for solar modules
      production. We made an advance of EUR269,160 ($425,273) for the purchase of
      this machine. The balance due will be paid upon delivery of the machine.




**ITEM
      3.****QUALITATIVE
      AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK**




Not
      applicable to “smaller reporting companies” under Item 305(e) of regulation
      S-K.




**ITEM
      4T.****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 Securities Exchange Act of 1934 (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.




17




As
      of the
      end of the period covered by this report, we conducted an evaluation, under
      the
      supervision and with the participation of our Chief Executive Officer and Chief
      Financial Officer, of our disclosure controls and procedures (as defined in
      Rule
      13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation,
      our Chief Executive Officer and Chief Financial Officer concluded that the
      Company’s disclosure controls and procedures are effective to ensure that
      information required to be disclosed by the Company in the reports that we
      file
      or submit under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in the SEC’s rules and forms and which also
      are effective in ensuring that information required to be disclosed by the
      Company in the reports that it files or submits under the Exchange Act is
      accumulated and communicated to the Company’s management, including the
      Company’s Chief Executive Officer and Chief Financial Officer, to allow timely
      decisions regarding required disclosure.




**CHANGES
      IN INTERNAL CONTROL OVER FINANCIAL REPORTING**




There
      were no changes in the Company’s internal controls over financial reporting that
      occurred during the quarter ended March 31, 2008 that have materially affected,
      or are reasonably likely to materially affect, the internal control over
      financial reporting.




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




**ITEM
      6.****EXHIBITS**




**Exhibits**31.1
            
            Certification
                of Principal Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.31.2
            
            Certification
                of Principal Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




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**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.




Dated:
              May 15,
              2008
            
            SES
                SOLAR INC.
              (Registrant)Dated:
                May 15, 2008
            By:
            /s/
                SANDRINE CRISAFULLISandrine
                Crisafulli
              Chief
                Financial Officer and Chief Operating Officer
              (principal
                financial officer and principal accounting
              officer)




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