##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 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 000-31687
 EVERGREEN SOLAR, INC.
 (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 DELAWARE
    
    04-3242254(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)138 BARTLETT STREETMARLBORO, MASSACHUSETTS
    
    01752(Address of principal executive offices)
    
    (Zip Code)
 (508) 357-2221  (REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT)
 Yes þ      No o
  þ o o
 Yes o No þ




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##### Table of Contents



EVERGREEN SOLAR, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2007
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION
    
    
    4ITEM 1. FINANCIAL STATEMENTS
    
    
    4Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statements of Operations
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    16ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    
    
    22ITEM 4. CONTROLS AND PROCEDURES
    
    
    22PART II. OTHER INFORMATION
    
    
    22ITEM 1. LEGAL PROCEEDINGS
    
    
    22ITEM 1A. RISK FACTORS
    
    
    22ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    35ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    35ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    35ITEM 5. OTHER INFORMATION
    
    
    35ITEM 6. EXHIBITS
    
    
    35SIGNATURES
    
    
    37Ex-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32.1 Section 906 Certification of CEOEx-32.2 Section 906 Certification of CFO
 2




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##### Table of Contents



CONCERNS REGARDING FORWARD-LOOKING STATEMENTS
 This Quarterly Report on Form 10-Q, including Managements Discussion and Analysis of Financial
Condition and Results of Operations in Item 2 of Part I of this report, contains forward-looking
statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, the results of the Company may differ materially
from those expressed or implied by such forward-looking statements and assumptions. All statements
other than statements of historical fact are statements that could be deemed forward-looking
statements, including but not limited to statements regarding the Companys future growth, revenue,
earnings and gross margin improvement; future warranty expenses; benefits and expenses resulting
from EverQ; contributions by our strategic partners Q-Cells AG and Renewable Energy Corporation to
EverQ and the successful integration of our proprietary technologies; our future equity ownership
position in EverQ; receipt of public grant awards; capital requirements to respond to competitive
pressures and acquire complementary businesses and necessary technologies; pursuit of future
research contracts that are not part of our current ongoing research activities; costs associated
with research and development, building or improving manufacturing facilities, general and
administrative expenses, business growth; shifts in our
geographic product revenue mix; international expansion of strategic partnerships, manufacturing
operations and distribution networks; operating efficiency of manufacturing facilities including
increases in manufacturing scale and technological improvements; the occurrence of and the use of
proceeds from sales of our securities; the sufficiency of our cash, cash equivalents, marketable
securities and borrowings available under our revolving credit facility to satisfy our anticipated
cash requirements; payment of
cash dividends; use of derivative financial instruments to manage foreign currency exchange risks;
the potential impact of our critical accounting policies and changes in financial accounting
standards or practices; our plans for the EverQ joint venture; our
continued transitioning to thin wafer
production and the expected timing and results of such transition; the expected timing of the
EverQ-2 facility or other facilities becoming fully operational; the expected demand for solar
energy; our expectations regarding product performance and cost and technological competitiveness;
our expectations regarding future silicon supply from Renewable Energy Corporation and our ability
to enter into additional contracts to secure our silicon supply; the anticipated benefits of our
String Ribbon technology; the making of strategic investments and the expectation of future benefit
from them; the development of the quad technology platform and its potential effects on crystal
growth; our position in the solar power market; our ability to reduce the costs of producing
solar products; the ability of DC Chemical to supply us with silicon as required by the supply
agreement; the timing of silicon shipments under the DC Chemical supply agreement and our
expectations regarding the amount of photovoltaic solar modules that we will be able to produce based
on such supply; and the strategic benefits of the DC Chemical relationship, and are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements may be identified with such words as we expect, we believe, we anticipate or
similar indications of future expectations. These statements are neither promises nor guarantees
and involve risks and uncertainties, which could cause our actual results to differ materially from
such forward-looking statements. Such risks and uncertainties may include, among other things,
macroeconomic and geopolitical trends and events, the execution and performance of contracts by
customers, suppliers and partners, and other risks and uncertainties described herein, including
but not limited to the items discussed in Risk Factors in Item 1A of Part II of this report and
that are otherwise described from time to time in our filings with the Securities and Exchange
Commission (SEC), copies of which may be accessed through the SECs web site at
http://www.sec.gov. We caution readers not to place undue reliance on any forward-looking
statements contained in this Quarterly Report, which speak only as of the date of this Quarterly
Report. We disclaim any obligation to publicly update or revise any such statements to reflect any
change in our expectations, or events, conditions, or circumstances on which any such statements
may be based, or that may affect the likelihood that actual results will differ from those set
forth in such forward-looking statements.
 3




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 Evergreen Solar, Inc.
 
 Condensed Consolidated Balance Sheets
 (in thousands, except share data)
(unaudited)
 December 31,
    
    
    March 31,2006
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    6,828
    
    
    $
    30,584Marketable securities
    
    
    42,593
    
    
    
    24,641Accounts receivable, net of allowances for doubtful accounts
of $150 and $160 at December 31, 2006 and March 31, 2007, respectively
    
    
    25,278
    
    
    
    13,781Inventory
    
    
    4,767
    
    
    
    5,467Interest receivable
    
    
    675
    
    
    
    445Other current assets
    
    
    1,853
    
    
    
    2,035Total current assets
    
    
    81,994
    
    
    
    76,953Investment in and advances to EverQ
    
    
    70,460
    
    
    
    70,289Deposits
    
    
    1,433
    
    
    
    2,194Restricted cash
    
    
    414
    
    
    
    414Deferred financing costs
    
    
    2,434
    
    
    
    2,324Fixed assets, net
    
    
    50,516
    
    
    
    51,772Total assets
    
    $
    207,251
    
    
    $
    203,946Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    18,465
    
    
    $
    18,674Other accrued expenses
    
    
    2,443
    
    
    
    2,471Accrued employee compensation
    
    
    2,791
    
    
    
    2,293Accrued debt interest
    
    
    
    
    
    
    984Accrued warranty
    
    
    705
    
    
    
    705Total current liabilities
    
    
    24,404
    
    
    
    25,127Subordinated convertible notes
    
    
    90,000
    
    
    
    90,000Total liabilities
    
    
    114,404
    
    
    
    115,127Commitments and contingencies (Note 5 and Note 11)Stockholders equity:Common stock, $0.01 par value, 150,000,000 shares authorized,
68,066,204 and 69,552,893 issued and outstanding at December 31, 2006
and March 31, 2007, respectively
    
    
    681
    
    
    
    696Additional paid-in capital
    
    
    211,053
    
    
    
    212,996Accumulated deficit
    
    
    (119,678
    )
    
    
    (125,897
    )Accumulated other comprehensive income
    
    
    791
    
    
    
    1,024Total stockholders equity
    
    
    92,847
    
    
    
    88,819Total liabilities and stockholders equity
    
    $
    207,251
    
    
    $
    203,946
  4




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Evergreen Solar, Inc.
 
 Condensed Consolidated Statements of Operations
 (in thousands, except per share data)
(unaudited)
 Quarter EndedApril 1,
    
    
    March 31,2006
    
    
    2007Product revenues
    
    $
    11,566
    
    
    $
    12,627Royalty and fee revenues
    
    
    
    
    
    
    1,471Total
revenues
    
    
    11,566
    
    
    
    14,098Cost of
revenues
    
    
    13,016
    
    
    
    11,269Gross profit (loss)
    
    
    (1,450
    )
    
    
    2,829Operating expenses:Research and development
    
    
    4,193
    
    
    
    5,224Selling, general and administrative
    
    
    4,399
    
    
    
    4,740Total operating expenses
    
    
    8,592
    
    
    
    9,964Operating loss
    
    
    (10,042
    )
    
    
    (7,135
    )Other income:Foreign exchange gains, net
    
    
    540
    
    
    
    599Interest income
    
    
    1,339
    
    
    
    1,250Interest expense
    
    
    (1,461
    )
    
    
    (909
    )Other income, net
    
    
    418
    
    
    
    940Loss before minority interest and equity loss
    
    
    (9,624
    )
    
    
    (6,195
    )Minority interest in EverQ
    
    
    1,484
    
    
    
    Equity loss from interest in EverQ
    
    
    
    
    
    
    (24
    )Net loss
    
    $
    (8,140
    )
    
    $
    (6,219
    )Net loss per share (basic and diluted)
    
    $
    (0.13
    )
    
    $
    (0.09
    )Weighted average shares used in computing basic and diluted
net loss per share
    
    
    63,771
    
    
    
    67,001
  5




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Evergreen Solar, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (in thousands)
(unaudited)
 Quarter endedApril 1,
    
    
    March 31,2006
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (8,140
    )
    
    $
    (6,219
    )Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation expense
    
    
    1,465
    
    
    
    1,539Amortization of deferred grant credits
    
    
    (58
    )
    
    
    Loss on disposal of fixed assets
    
    
    15
    
    
    
    Minority interest in EverQ
    
    
    (1,484
    )
    
    
    Equity loss from EverQ
    
    
    
    
    
    
    24Amortization of deferred debt financing costs
    
    
    110
    
    
    
    111Bad debt expense
    
    
    (6
    )
    
    
    Accretion of bond discount
    
    
    (377
    )
    
    
    (46
    )Compensation expense associated with employee equity awards
    
    
    1,168
    
    
    
    1,477Changes in
operating assets and liabilities:Accounts receivable
    
    
    (1,701
    )
    
    
    11,497Interest payable
    
    
    1,139
    
    
    
    984Inventory
    
    
    (2,466
    )
    
    
    (701
    )Interest receivable
    
    
    (209
    )
    
    
    230Other current assets
    
    
    (2,874
    )
    
    
    (183
    )Accounts payable
    
    
    671
    
    
    
    209Accrued expenses
    
    
    3,453
    
    
    
    (470
    )Net cash provided by (used in) operating activities
    
    
    (9,294
    )
    
    
    8,452Cash flows from investing activities:Purchases of fixed assets and deposits on fixed assets under construction
    
    
    (19,705
    )
    
    
    (3,556
    )Increase in restricted cash
    
    
    (360
    )
    
    
    Decrease in EverQ loan
    
    
    
    
    
    
    379Purchases of marketable securities
    
    
    (18,954
    )
    
    
    Proceeds from sale and maturity of marketable securities
    
    
    31,750
    
    
    
    18,000Net cash
provided by (used in) investing activities
    
    
    (7,269
    )
    
    
    14,823Cash flows from financing activities:Increase in long-term debt
    
    
    6,044
    
    
    
    Increase in short-term debt
    
    
    10,187
    
    
    
    Proceeds from exercise of warrants
    
    
    9,388
    
    
    
    Proceeds from exercise of stock options, and
shares purchased under Employee Stock Purchase Plan
    
    
    1,094
    
    
    
    481Net cash flow provided by financing activities
    
    
    26,713
    
    
    
    481Effect of exchange rate changes on cash and cash equivalents
    
    
    (203
    )
    
    
    Net increase in cash and cash equivalents
    
    
    9,947
    
    
    
    23,756Cash and cash equivalents at beginning of period
    
    
    30,742
    
    
    
    6,828Cash and cash equivalents at end of period
    
    $
    40,689
    
    
    $
    30,584
  6




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Evergreen Solar, Inc.
 
 Notes to Condensed Consolidated Financial Statements
 (unaudited)
 1. Basis of Presentation
       2. Net Loss per Common Share
  7




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3. Inventory
  December 31,
    
    
    March 31,2006
    
    
    2007Raw materials
    
    $
    3,714
    
    
    $
    4,518Work-in-process
    
    
    804
    
    
    
    615Finished goods
    
    
    249
    
    
    
    334$
    4,767
    
    
    $
    5,467
 4. Fixed Assets
  Useful
    
    December 31,
    
    
    March 31,Life
    
    2006
    
    
    2007Laboratory and manufacturing equipment
    
    3-7 years
    
    $
    36,544
    
    
    $
    39,272Computer and office equipment
    
    3-7 years
    
    
    910
    
    
    
    1,131Leasehold improvements
    
    Lesser of 15 to 20years or lease term
    
    
    8,360
    
    
    
    8,360Assets under construction
    
    
    
    
    18,002
    
    
    
    17,84863,816
    
    
    
    66,611Less: Accumulated depreciation
    
    
    
    
    (13,300
    )
    
    
    (14,839
    )$
    50,516
    
    
    $
    51,772
   5. Guarantor Arrangements
  Product Warranty
  8




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##### Table of Contents



Indemnification Agreements
  EverQ Debt Guarantee
  Letters of Credit
  6. Stock Based Compensation
  Quarter EndedApril 1, 2006
    
    
    March 31, 2007Cost of product revenues
    
    $
    113
    
    
    $
    145Research and development expenses
    
    
    329
    
    
    
    361Selling, general and administrative expenses
    
    
    726
    
    
    
    971Total
    
    $
    1,168
    
    
    $
    1,477
  9




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Stock Incentive Plans
   Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    Remaining
    
    Average
    
    
    
    
    
    AverageExercise
    
    Number
    
    Contractual
    
    Exercise
    
    Number
    
    ExercisePrices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$ 0.76
    
    $
    1.60
    
    
    
    292,233
    
    
    
    5.04
    
    
    $
    1.34
    
    
    
    218,733
    
    
    $
    1.281.61
    
    
    1.61
    
    
    
    1,638,000
    
    
    
    6.70
    
    
    
    1.61
    
    
    
    1,138,000
    
    
    
    1.611.68
    
    
    1.95
    
    
    
    7,456
    
    
    
    6.34
    
    
    
    1.75
    
    
    
    7,456
    
    
    
    1.752.00
    
    
    2.00
    
    
    
    971,926
    
    
    
    6.63
    
    
    
    2.00
    
    
    
    688,612
    
    
    
    2.002.08
    
    
    2.99
    
    
    
    545,256
    
    
    
    5.75
    
    
    
    2.47
    
    
    
    349,506
    
    
    
    2.433.00
    
    
    6.50
    
    
    
    532,999
    
    
    
    7.08
    
    
    
    4.81
    
    
    
    289,406
    
    
    
    4.706.51
    
    
    8.45
    
    
    
    533,366
    
    
    
    7.80
    
    
    
    7.35
    
    
    
    272,491
    
    
    
    7.288.63
    
    
    14.00
    
    
    
    326,569
    
    
    
    6.82
    
    
    
    11.64
    
    
    
    256,997
    
    
    
    11.8915.09
    
    
    15.09
    
    
    
    335,000
    
    
    
    8.90
    
    
    
    15.09
    
    
    
    83,750
    
    
    
    15.0919.00
    
    
    19.00
    
    
    
    16,000
    
    
    
    3.59
    
    
    
    19.00
    
    
    
    16,000
    
    
    
    19.005,198,805
    
    
    
    6.78
    
    
    $
    4.23
    
    
    
    3,320,951
    
    
    $
    3.71
   10




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Weighted-AverageGrant-dateShares
    
    
    Fair ValueOutstanding at January 1, 2007
    
    
    1,129
    
    
    $
    14.25Granted
    
    
    1,372
    
    
    
    8.84Vested
    
    
    (45
    )
    
    
    8.67Forfieted
    
    
    (8
    )
    
    
    14.45Outstanding at March 31, 2007
    
    
    2,448
    
    
    $
    11.32
  11




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7. Stockholders Equity
   8. Geographical and Customer Concentration of Revenue Information
  12




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Quarter EndedApril 1,
    
    
    March 31,2006
    
    
    2007By geography:U.S. distributors
    
    
    33
    %
    
    
    72
    %Germany
    
    
    66
    %
    
    
    10
    %Korea
    
    
    0
    %
    
    
    17
    %Other
    
    
    1
    %
    
    
    1
    %100
    %
    
    
    100
    %By customer:PowerLight Corporation
    
    
    0
    %
    
    
    22
    %Woojin Electric Machinery Co. Ltd.
    
    
    0
    %
    
    
    17
    %SunEdison
    
    
    0
    %
    
    
    15
    %groSolar
    
    
    4
    %
    
    
    10
    %Krannich Solartechnik
    
    
    11
    %
    
    
    0
    %Donauer Solartechnik
    
    
    17
    %
    
    
    0
    %All other
    
    
    68
    %
    
    
    36
    %100
    %
    
    
    100
    %
 9. EverQ
   Revenue
    
    $
    27,601Cost of goods sold
    
    
    21,791Other expenses
    
    
    5,882Net loss
    
    
    72Current assets
    
    $
    119,542Non-current assets
    
    
    188,920Current liabilities
    
    
    33,098Non-current liabilities
    
    
    185,956
  Date of Loan
    
    Principal
    
    Principal (USD)
    
    Interest Rate
    
    Date DueJanuary 25, 2007
    
     30,000,000
    
    $
    40,122,000
    
    
    
    5.43
    %
    
    December 31, 2009
  10. Comprehensive Income
  13




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Quarter EndedApril 1,
    
    
    March 31,2006
    
    
    2007Net loss
    
    $
    (8,140
    )
    
    $
    (6,219
    )Other comprehensive income (loss):Unrealized gain (loss) on marketable securities
    
    
    (38
    )
    
    
    2Cumulative translation adjustments
    
    
    462
    
    
    
    231Total comprehensive loss
    
    $
    (7,716
    )
    
    $
    (5,986
    )
 11. Long-Term Debt
  Redemption Period
    
    Price (%)Beginning on
July 1, 2010 and ending on June 30,
2011
    
    
    101.250Beginning on
July 1, 2011 and ending on June 30,
2012
    
    
    100.625On July 1, 2012
    
    
    100.000
    Conversion Option
  Put Option
  Call Option
  14




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##### Table of Contents



12. Related Party Transactions
   13. Income Taxes
  14. Recent Accounting Pronouncements
  15. Subsequent Events
     15




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion should be read in conjunction with
the Condensed Consolidated Interim Financial
Statements and the related notes that appear elsewhere in this document.
 EXECUTIVE OVERVIEW
 tm
   16




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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Accounting for EverQ
     17




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Revenue Recognition and Allowance for Doubtful Accounts
    Warranty
  Stock-based Compensation
   Inventory
  18




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Impairment of Long-lived Assets
  RESULTS OF OPERATIONS
 Revenues.
  Cost of revenues.
 Research and development expenses.
 Selling, general and administrative expenses.
 Other income, net.
 19




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Equity income in EverQ.
 Minority interest.
 Comparison of Quarters Ended March 31, 2007 and April 1, 2006
 Revenues .
   Quarter EndedApril 1,
    
    
    March 31,2006
    
    
    2007By geography:U.S. distributors
    
    
    33
    %
    
    
    72
    %Germany
    
    
    66
    %
    
    
    10
    %Korea
    
    
    0
    %
    
    
    17
    %Other
    
    
    1
    %
    
    
    1
    %100
    %
    
    
    100
    %By customer:PowerLight Corporation
    
    
    0
    %
    
    
    22
    %Woojin Electric Machinery Co. Ltd.
    
    
    0
    %
    
    
    17
    %SunEdison
    
    
    0
    %
    
    
    15
    %groSolar
    
    
    4
    %
    
    
    10
    %Krannich Solartechnik
    
    
    11
    %
    
    
    0
    %Donauer Solartechnik
    
    
    17
    %
    
    
    0
    %All other
    
    
    68
    %
    
    
    36
    %100
    %
    
    
    100
    %
 Cost of product revenues and gross margins .
 Research
and development expenses.
 Selling, general and administrative expenses.
 Other income, net .
 Equity
loss from interest in EverQ.
 20




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Liquidity and Capital Resources
         21




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Off-Balance Sheet Arrangements
  Contractual Obligations
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 INTEREST RATE RISK
  FOREIGN CURRENCY EXCHANGE RATE RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 The factors discussed below are cautionary statements that identify important factors that could
cause actual results to differ materially from those anticipated by the forward-looking statements
contained in this report. For more information regarding the forward-looking statements contained
in this report, see Forwarding Looking Statements at the beginning of this report. You should
carefully consider the risks and uncertainties described
below, together with all of the other information included in this report, in considering our
business and prospects. The risks and uncertainties described below are not the only ones that we
face. Additional risks and uncertainties
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not presently known to us also may impair our business
operations. The occurrence of any of the following risks could adversely affect our business,
financial condition or results of operations.
 Risks Relating to Our Industry, Products, Financial Results and Operations
 Evaluating our business and future prospects may be difficult due to the rapidly changing market
landscape .
   We have a history of losses, expect to incur substantial further losses and may not achieve or
maintain profitability in the future, which may decrease the market value of our stock
  
    
    expand our manufacturing operations, whether domestically or internationally, including EverQ;
    
    develop our distribution network;
    
    continue to research and develop our products and manufacturing technologies;
    
    implement internal systems and infrastructure in conjunction with our growth; and
    
    hire additional personnel.
  We may need to raise significant additional capital in order to fund our operations and to continue
to grow our business, which subjects us to the risk that we may be unable to maintain or grow our
business as planned and that our stockholders may be subject to substantial additional dilution
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EverQ provides the majority of the solar products that we distribute and is an important component
of our growth strategy. EverQ is subject to numerous risks, many of which are outside of our
control, and we cannot assure you that EverQ will achieve its objective or otherwise be successful.
If EverQ is not successful, our business would be materially and adversely harmed and our stock
price would decline
  
    
    government grants that have been approved may be subject to forfeiture or repayment in
whole or in part if EverQ fails to continue to meet the conditions for such grants or if
such grants for any reason become unavailable from German or European Union sources;
    
    the establishment of new facilities may result in cost overruns, delays, equipment
problems and construction, start-up and other operating difficulties, any of which could
adversely affect the ability of EverQ to achieve or grow revenue on the timeframe we
expect; as we only own one-third of EverQ, Q-Cells and REC will have the ability to
influence the strategic direction of EverQ and other material decisions of EverQ; as a
result, we may be unable to take certain actions that we believe would be in our best
interests, which, given the expected materiality of EverQ to our combined operations, could
significantly harm our business; further, we may be liable to third parties for the
material decisions and actions of Q-Cells and REC in EverQ, which actions may harm EverQ
and our business;
    
    the joint venture agreement is governed  by German law and may be  subject to multiple, conflicting and changing laws, regulations and tax
schemes relating to EverQ;
    
    EverQ may be unable to obtain, maintain or enforce adequate intellectual property rights
and protection due to limited or unfavorable intellectual property protection and may be
subject to claims or suits alleging infringement of third party intellectual property
rights;
    
    under certain circumstances, if we exit EverQ, EverQ will continue to have certain
rights to our proprietary technologies that we are licensing to it and thereby compete with
us;
    
    limitations on dividends or restrictions against repatriation of earnings may limit our
ability to capitalize on earnings from EverQ;
    
    the operation of the manufacturing facility may experience seasonal reductions in
productivity common in certain foreign countries, such as the summer months in Europe;
    
    EverQ may be subject to increases in tariffs, duties, price controls or other
restrictions on foreign currencies or trade barriers imposed by foreign countries;
    
    EverQ may be unable to successfully hire and retain the additional personnel necessary
to operate the facility, or future facilities;
    
    we will be exposed to fluctuations in currency exchange rates; and
    
    we may experience difficulties in staffing and managing international operations,
including the difficulty in managing a geographically dispersed workforce in compliance
with diverse local laws and customs.
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Our
future success depends on our ability to increase our manufacturing capacity through the development of additional
manufacturing facilities. We may be unable to achieve our capacity expansion goals, which would
limit our growth potential, impair our operating results and financial condition and cause our
stock price to decline.
   
    
    we may need to continue to raise significant additional capital through the issuance of
equity or convertible or debt securities in order to finance the costs of development of
any additional facility, which we may be unable to do so on reasonable terms or at all, and
which could be dilutive to our existing stockholders;
    
    the build-out of any additional facility will be subject to the risks inherent in the
development of a new manufacturing facility, including risks of delays and cost overruns as
a result of a number of factors, many of which may be out of our control, such as delays in
government approvals or problems with supplier relationships;
    
    we may be required to depend on third parties or strategic partnerships that we
establish in the development and operation of a facility, which may subject us to risks
that such third parties do not fulfill their obligations to us under our arrangements with
them; and
    
    if a new facility is established internationally, we may encounter legal restrictions
and liability, encounter commercial restrictions and incur taxes and other expenses to do
so and otherwise be subject to the risks inherent in conducting business in a foreign
jurisdiction as described elsewhere in this section.
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The solar power industry is currently experiencing an industry-wide shortage of polysilicon. The
prices that we pay for polysilicon have increased recently and we expect prices to remain at or
above current levels for the foreseeable future, which may constrain our revenue growth and
decrease our gross margins and profitability.
   Our dependence on a limited number of third party suppliers for raw materials, key components for
our solar power products and custom-built equipment for our operations could prevent us from
delivering our products to our customers within required timeframes, which could result in order
cancellations and loss of market share.
  We continue to invest significantly in research and development, and these efforts may not result
in improved products or manufacturing processes.
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Our solar power products may not gain market acceptance, which would prevent us from achieving
increased revenues and market share
  
    
    our failure to produce solar power products that compete favorably against other solar
power products on the basis of cost, quality and performance;
    
    our failure to produce solar power products that compete favorably against conventional
energy sources and alternative distributed generation technologies, such as wind and
biomass, on the basis of cost, quality and performance;
    
    whether or not customers will accept our new module designs under development and the
techniques we are developing to mount them; and
    
    our failure to develop and maintain successful relationships with distributors, systems
integrators and other resellers, as well as strategic partners.
  Technological changes in the solar power industry could render our solar power products
uncompetitive or obsolete, which could reduce our market share and cause our revenues to decline
  Our ability to increase market share and revenues depends on our ability to successfully maintain our
existing distribution relationships and expand our distribution channels
  We face risks associated with the marketing, distribution and sale of our solar power products
internationally, and if we are unable to effectively manage these risks, it could impair our
ability to expand our business abroad
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
    
    difficult and expensive compliance with the commercial and legal requirements of
international markets, with which we have only limited experience;
    
    inability to obtain, maintain or enforce intellectual property rights;
    
    encountering trade barriers such as export requirements, tariffs, taxes and other
restrictions and expenses, which could affect the competitive pricing of our solar power
products and reduce our market share in some countries;
    
    fluctuations in currency exchange rates relative to the U.S. dollar;
    
    difficulty in recruiting and retaining individuals skilled in international business operations;
    
    increased costs associated with maintaining international marketing efforts;
    
    difficulty of enforcing revenue collection internationally; and
    
    inability to develop, manufacture, market and sell our products and services in Germany
and other international markets due to, for example, third-party intellectual property
rights.
  Our dependence on a small number of resellers may cause significant fluctuations or declines in our
product revenues
  
    
    reduction, delay or cancellation of orders from one or more of our significant resellers;
    
    selection by one or more of our significant resellers of products competitive with ours;
    
    loss of one or more of our significant resellers and our failure to recruit additional
or replacement resellers; and
    
    failure of any of our significant resellers to make timely payment of our invoices.
 Problems with product quality or product performance may cause us to incur warranty expenses and
may damage our market reputation and prevent us from achieving increased sales and market share
  Our success in the future may depend on our ability to establish and maintain strategic alliances,
and any failure on our part to establish and maintain such relationships could adversely affect our
market penetration and revenue growth
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The success of our business depends on the continuing contributions of our key personnel and our
ability to attract and retain new qualified employees in a competitive labor market
   Extended business interruption at our manufacturing facilities could result in reduced sales
  The reduction or elimination of government subsidies and economic incentives for on-grid
applications could cause our revenues to decline
  If solar power technology is not suitable for widespread adoption or sufficient demand for solar
power products does not develop or takes longer to develop than we anticipate, our revenues would not
significantly increase and we would be unable to achieve or sustain profitability
  
    
    cost-effectiveness of solar power technologies as compared with conventional and
non-solar alternative energy technologies;
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
    
    performance and reliability of solar power products as compared with conventional and
non-solar alternative energy products;
    
    success of alternative distributed generation technologies such as fuel cells, wind
power and micro turbines;
    
    fluctuations in economic and market conditions that impact the viability of conventional
and non-solar alternative energy sources, such as increases or decreases in the prices of
oil and other fossil fuels;
    
    capital expenditures by customers that tend to decrease when the United States or global
economy slows;
    
    continued deregulation of the electric power industry and broader energy industry; and
    
    availability of government subsidies and incentives.
 We face intense competition from other companies producing solar power and other energy generation
products. If we fail to compete effectively, we may be unable to increase our market share and
revenues
  If we are unable to protect our intellectual property adequately, we could lose our competitive
advantage in the solar power market
  
    
    we cannot be certain that our pending United States and foreign patent applications will
result in issued patents or that the claims allowed are or will be sufficiently broad to
protect our technology or processes;
    
    given the costs of obtaining patent protection, we may choose not to protect certain
innovations that later turn out to be important;
    
    third parties may design around our patented technologies or seek to challenge or
invalidate our intellectual property rights and there is no assurance that our intellectual
property rights will deter infringement or misappropriation of our intellectual property;
    
    we may incur significant costs and diversion of management resources in prosecuting or
defending intellectual property infringement suits;
    
    we may not be successful in prosecuting or defending intellectual property infringement
suits and, as a result, may need to seek to obtain a license of the third partys
intellectual property rights, which may not be available to us, whether on reasonable terms
or at all; and
    
    the contractual provisions we rely on to protect our trade secrets and proprietary
information, such as our confidentiality and non-disclosure agreements with our employees,
consultants and other third parties, may be breached and our trade secrets and proprietary
information may be disclosed to competitors, strategic partners and the public.
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If we are subject to litigation and infringement claims, they could be costly and disrupt our
business
  
    
    assert claims of infringement or misappropriation of or otherwise enforce our
intellectual property rights;
    
    protect our trade secrets or know-how; or
    
    determine the enforceability, scope and validity of our intellectual property rights or those of others.
   We may be unable to adequately protect or enforce our proprietary information, which may result in
its unauthorized use, reduced revenues or otherwise reduce our ability to compete
    
    
    independently develop substantially equivalent proprietary information, products and techniques;
    
    otherwise gain access to our proprietary information; or
    
    design around our patents or other intellectual property.
  Existing regulations and changes to such regulations may present technical, regulatory and economic
barriers to the purchase and use of solar power products, which may significantly reduce demand for
our products
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Compliance with environmental regulations can be expensive, and noncompliance with these
regulations may result in adverse publicity and potentially significant monetary damages and fines
  Product liability claims against us could result in adverse publicity and potentially significant
monetary damages .
  Risks Related to Our Common Stock
 Substantial leverage and debt service obligations may adversely affect our cash flows .
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
    
    make it difficult for us to make payments on the notes;
    
    make it difficult for us to obtain financing for working capital, acquisitions or other
purposes on favorable terms, if at all, including financing to fund the development or
expansion of EverQs manufacturing operations;
    
    make us more vulnerable to industry downturns and competitive pressures; and
    
    limit our flexibility in planning for, or reacting to changes in, our business.
 .
 The price of our common stock has been volatile, and you may not be able to resell your shares at
or above your purchase price.
  
    
    the size and timing of customer orders for or shipments of our products;
    
    the rate and cost at which we are able to expand our manufacturing capacity to meet
product demand, including the rate and cost at which we are able to implement advances
in our String-Ribbon technology;
    
    our ability to establish and expand key customer and distributor relationships;
    
    our ability and the terms upon which we are able to raise capital sufficient to
finance the expansion of our manufacturing capacity and our sales and marketing
efforts;
    
    our ability to expand Evergreen Solar and EverQ within budget and within the time frame that we expect;
    
    our ability to establish strategic relationships with third parties to accelerate our growth plans;
    
    the amount and timing of expenses associated with our research and development
programs and our ability to develop enhancements to our manufacturing processes and our
products;
    
    delays associated with the supply of specialized materials necessary for the
manufacture of our solar power products;
    
    our ability to execute our cost reduction programs;
    
    one time charges resulting from replacing existing equipment or technology with new
or improved equipment or technology as part of our strategy to expand our manufacturing
capacity and to decrease our per unit manufacturing cost;
    
    developments in the competitive environment, including the introduction of new
products or technological advancements by our competitors; and
    
    the timing of adding the personnel necessary to execute our growth plan.
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Because we do not intend to pay dividends, stockholders will benefit from an investment in our
common stock only if it appreciates in value
  We are subject to anti-takeover provisions in our charter and by-laws and under Delaware law that
could delay or prevent an acquisition of our company, even if the acquisition would be beneficial
to our stockholders.
  We can issue shares of preferred stock that may adversely affect the rights of a stockholder of our
common stock .
  
    
    adversely affect the voting power of the stockholders of our common stock;
    
    discourage bids for our common stock at a premium;
    
    limit or eliminate any payments that the stockholders of our common stock could expect
to receive upon our liquidation; or
    
    result in dilution to existing stockholders or otherwise adversely affect the market
price of our common stock.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 Number
    
    Description3.1 (1)
    
    Third Amended and Restated Certificate of Incorporation (Exhibit 3.2)3.2 (1)
    
    Second Amended and Restated By-laws (Exhibit 3.4)3.3 (3)
    
    Certificate of Amendment of Third Amended and Restated Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on May 15, 2003 (Exhibit
4.3)3.4 (3)
    
    Certificate of the Powers, Designations, Preferences and Rights of the Series A
Convertible Preferred Stock of the Company (Exhibit 4.4)3.5 (4)
    
    Certificate of Amendment of Third Amended and Restated Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on August 20, 2004
(Exhibit 4.5)3.6 (14)
    
    Certificate of Amendment of Third Amendment and Restated Certificate of
Incorporation filed with the Secretary of State of Delaware on January 8, 2007
(Exhibit 3.1)4.1 (10)
    
    Indenture between the Registrant and U.S. Bank National Association, as Trustee,
dated June 29, 2005 (Exhibit 4.4)4.2 (10)
    
    Form of 4.375% Convertible Subordinated Notes due 2012 (Exhibit 4.4)10.1 (2)*
    
    1994 Stock Option Plan. (Exhibit 10.1)10.2 (1)*
    
    2000 Stock Option and Incentive Plan (Exhibit 10.2)10.3 (6)*
    
    Amended and Restated 2000 Stock Option and Incentive Plan (Exhibit 99.1)10.4 (6)*
    
    Amended and Restated 2000 Employee Stock Purchase Plan (Exhibit 99.2)10.5 (1)
    
    Lease Agreement between the Registrant and W9/TIB Real Estate Limited Partnership,
dated January 31, 2000, as amended (Exhibit 10.5)10.6 (1)
    
    Form of Indemnification Agreement between Registrant and each of its directors and
executive officers (Exhibit 10.9)10.7 (5)
    
    Stock and Warrant Purchase Agreement, dated March 21, 2003 (Exhibit 10.1)10.8 (5)
    
    Form of Registration Rights Agreement (Exhibit 10.3)10.9 (5)
    
    Voting Agreement, dated March 21, 2003 (Exhibit 10.2)10.10 (8)
    
    Stock and Warrant Purchase Agreement, dated June 16, 2004 (Exhibit 10.1)10.11 (8)
    
    Warrant Agreement, dated June 21, 2004 (Exhibit 10.2)10.12 (8)
    
    Form of Warrants (Exhibit 10.3)10.13 (8)
    
    Registration Rights Agreement, dated June 21, 2004 (Exhibit 10.4)10.14 (8)
    
    Conversion, Consent, Voting and Lock-Up Agreement, dated June 21, 2004 (Exhibit 10.5)10.15 (9)+
    
    Master Joint Venture Agreement by and among the Registrant, Q-Cells AG, Renewable
Energy Corporation and EverQ GmbH, dated November 4, 2005 (Exhibit 10.17)
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Number
    
    Description10.16 (9)+
    
    License and Technology Transfer Agreement by and between the Registrant and EverQ
GmbH, dated November 24, 2005 (Exhibit 10.18)10.17 (9)+
    
    Technology Co-Operation Agreement by and between the Registrant and Renewable Energy
Corporation, dated November 24, 2005 (Exhibit 10.19)10.18 (7)*
    
    Evergreen Solar, Inc. Management Incentive Policy (Exhibit 10.20)10.19 (12)
    
    Purchase Agreement by and between the Registrant and SG Cowen & Co., LLC, as
representatives of the Initial Purchasers, dated June 23, 2005 (Exhibit 10.24)10.20 (10)
    
    Registration Rights Agreement by and between the Registrant and SG Cowen & Co., LLC,
as representative of the Initial Purchasers, dated June 29, 2005 (Exhibit 10.21)10.21 (11)+
    
    Memorandum of Understanding by and among the Registrant, Q-Cells AG, EverQ GmbH and
Renewable Energy Corporation AS, dated June 5, 2006 (Exhibit 10.1)10.22 (13)+
    
    Amendment to the Master Joint Venture Agreement by and among the Registrant, Q-Cells
AG, Renewable Energy Corporation, REC Solar Grade Silicon LLC and EverQ GmbH, dated
September 29, 2006 (Exhibit 10.26)10.23 (13)+
    
    Sales Representative Agreement by and between the Registrant and EverQ, GmbH, dated
September 29, 2006 (Exhibit 10.27)10.24 (13)+
    
    Amended and Restated License and Technology Transfer Agreements by and between the
Registrant and EverQ GmbH, dated September 29, 2006 (Exhibit 10.18)10.25 (15)
    
    Stock Purchase Agreement by and between the Registrant and DC Chemical Co., Ltd.,
dated April 17, 2007 (Exhibit 10.1)10.26 (15)
    
    Stockholders Agreement by and between the Registrant and DC Chemical Co., Ltd.,
dated April 17, 2007 (Exhibit 10.2)10.27 (16)+
    
    Supply Agreement by and between the Registrant and DC Chemical Co., Ltd., dated
April 17, 2007 (Exhibit 10.3)31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14(d) and Rule
15d-14(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 200232.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14(d) and Rule
15d-14(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 
 +
    
    Confidential treatment granted as to certain portions.*
    
    Indicates a management contract or compensatory plan, contract or arrangement.(1)
    
    Incorporated herein by reference to the exhibits to the Companys Registration Statement on
Form S-1/A, filed on October 3, 2000. The number given in parenthesis indicates the corresponding exhibit number in
such Form S-1/A.(2)
    
    Incorporated herein by reference to the exhibits to the Companys Registration Statement on
Form S-1, filed on August 4, 2000. The number given in parenthesis indicates the corresponding
exhibit number in such Form S-1.(3)
    
    Incorporated herein by reference to the exhibits to the Companys Registration Statement on
Form S-8 dated June 9, 2003. The number given in parenthesis indicates the corresponding
exhibit number in such Form S-8.(4)
    
    Incorporated herein by reference to the exhibits to the Companys Registration Statement on
Form S-3 filed on October 21, 2004. The number given in parenthesis indicates the
corresponding exhibit number in such Form S-3.(5)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated March 24, 2003. The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(6)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K dated
July 21, 2005. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.(7)
    
    Incorporated herein by reference to the exhibits to the Companys Quarterly Report on
Form 10-Q for the period ended April 2, 2005 filed on May 2, 2005. The number given in
parenthesis indicates the corresponding exhibit number in such Form 10-Q. 36




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(8)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated June 22, 2004. The number given in parenthesis indicates the corresponding exhibit number
in such Form 8-K.(9)
    
    Incorporated herein by reference to the exhibits to the Companys Annual Report on Form 10-K
for the period ended December 31, 2005 filed on March 16, 2006. The number given in
parenthesis indicates the corresponding exhibit number in such Form 10-K.(10)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated June 29, 2005. The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(11)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated June 9, 2006. The number given in parenthesis indicates the corresponding exhibit number
in such Form 8-K.(12)
    
    Incorporated herein by reference to the exhibits to the Companys Quarterly Report on
Form 10-Q for the period ended July 2, 2005 filed on August 11, 2005. The number given in
parenthesis indicates the corresponding exhibit number in such Form 10-Q.(13)
    
    Incorporated herein by reference by reference to exhibits to the Companys Quarterly Report on
Form 10-Q for the period ended September 30, 2006 filed on November 7, 2006. The number given
in parenthesis indicated the corresponding exhibit number in such Form 10-Q.(14)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated January 8, 2007. The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(15)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K
dated April 17, 2007. The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(16)
    
    Incorporated herein by reference to the exhibits to the Companys Current Report on Form 8-K/A
dated April 20, 2007. The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K/A. 
 SIGNATURES
  EVERGREEN SOLAR, INC.Date: May 10, 2007/s/ Michael El-Hillow

Michael El-Hillow
Chief Financial Officer and Secretary
(Principal Financial Officer)
 37