---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB/A

(Mark One)

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

For the quarter endedDecember 31, 2006

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number333-120926

SOLAR ENERTECH CORP.(Exact
name of registrant as specified in its charter)

|Nevada                         | 98-0434357         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

1600 Adams DriveMenlo Park, CA
94025(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code(650)
688-5800

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

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 [ x ] No [ ]

Number of shares outstanding of Registrant's class of common stock
  as of April 16, 2007: 78,807,012

Authorized share capital of the registrant:200,000,000
  common shares, par value of $0.001

The Company recorded $0 revenue for the quarter ended December
  31, 2006

---

FORWARD-LOOKING STATEMENTS

This report on Form 10QSB contains forward-looking statements,
in particular in our Plan of Operations, that relate to our current expectations
and views of future events. These statements relate to events that involve known
and unknown risks, uncertainties and other factors, including those listed under
Risk Factors, which may cause our actual results, performance or achievements
to be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be
identified by words or phrases such as may, will, expect, anticipate,
aim, estimate, intend, plan or planned believe, potential,
continue, is/are likely to, hope or other similar expressions. We have
based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy and financial
needs.

These forward-looking statements include, among other things,
statements relating to:

- our expectations regarding the worldwide demand for electricity and the
  market for solar energy;
- our beliefs regarding the effects of environmental regulation, lack of
  infrastructure reliability and long-term fossil fuel supply constraints;
- our beliefs regarding the inability of traditional fossil fuel-based
  generation technologies to meet the demand for electricity;
- our beliefs regarding the importance of environmentally friendly power
  generation;
- our expectations regarding governmental support for the deployment of
  solar energy;
- our beliefs regarding the acceleration of adoption of solar technologies;
- our beliefs regarding the competitiveness of PV products;
- our expectations regarding the creation and development of our
  manufacturing capacity;
- our expectations with respect to revenue and sales and our ability to
  achieve profitability resulting from increases in production volumes;
- our expectations with respect to our ability to secure raw materials in
  the future;
- our future business development, results of operations and financial
  condition; and
- competition from other manufacturers of PV products and conventional
  energy suppliers.

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING
  STATEMENTS

The forward-looking statements made in this report on Form
10-QSB relate only to events or information as of the date on which the
statements are made in this report on Form 10-QSB. Except as required by law, we
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of
unanticipated events. You should read this report and the documents that we
reference in this report, including documents referenced by incorporation,
completely and with the understanding that our actual future results may be
materially different from what we expect or hope.

EXPLANATORY NOTE

This Quarterly Report on Form 10-QSB/A is being filed as an
amendment to the Quarterly Report on Form 10-QSB of Solar Enertech Corporation
for the fiscal quarter ended December 31, 2006, which was filed with the
Securities and Exchange Commission (the "SEC") on February 27, 2007. We have
identified certain accounting errors related to option agreements with employees
and other share based compensation. We also determined that we had not properly
accounted for certain transactions with related parties. Accordingly, share
based compensation charges relating to the fiscal year ended September 30, 2006
were revised in our Form 10-KSB/A. These revisions have been carried forward in
the balance sheet, and we herein and further revised stock based compensation
expenses for the fiscal quarter ended December 31, 2006.

We have amended disclosures to footnote 4 to correct a stock-based
  compensation charge in connection with an option agreement dated March 1, 2006
  with a former officer and director of the Company, and the Companys president
  and CEO from $49,352 as previously reported to $9,870.

Page 2

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The effect of the changes related to accounting for the issues
described above on our statement of operations from inception through December
31, 2006 was an increase in our net loss attributable to common shareholders of
$7,833,155. There was no net effect on our balance sheet as of December 31,
2006.

In all other material respects, this Amended Annual Report on
Form 10-QSB/A is unchanged from the Quarterly Report on Form 10-QSB previously
filed on February 27, 2007. This Amended Report on Form 10-QSB/A does not
attempt to modify or update any other disclosures set forth in the Form 10-QSB
previously filed or discuss any other developments after the respective date of
that filing except to reflect the effects of the restatements described above,
except as otherwise specifically identified herein. Please refer to the
Company's Form 10-KSB and Form 10-KSB/A for the fiscal year ended September 30,
2006 filed with the SEC since December 28, 2006.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

|                                                     | Page Number
|---------------------------------------------------- | -----------
|                                                     |            
|Consolidated
      Balance Sheets                    | 4          
|                                                     |            
|Consolidated
      Statements of Operations          | 5          
|                                                     |            
|Consolidated
      Statement of Cash Flows           | 6          
|                                                     |            
|Notes
      to the Consolidated Financial Statements | 7          

Page 3

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|Solar Enertech Corp.       
|---------------------------
|A Development Stage Company
|Consolidated Balance Sheets
|(Unaudited)                

|                                                                 |   | December 31, 2006 |   |   | September 30, 2006 |  
|---------------------------------------------------------------- | - | ----------------- | - | - | ------------------ | -
|                                                                 |   | (Restated)        |   |   |                    |  
|ASSETS                                                           |   |                   |   |   |                    |  
|                                                                 |   |                   |   |   |                    |  
|Current assets:                                                  |   |                   |   |   |                    |  
|Cash and cash equivalents                                        | $ | 2,477,945         |   | $ | 2,798,957          |  
|Due from related party                                           |   | 43,894            |   |   | -                  |  
|Prepaid expenses and advances                                    |   | 36,242            |   |   | 40,577             |  
|Inventory                                                        |   | 388,501           |   |   | -                  |  
|Total current assets                                             |   | 2,946,582         |   |   | 2,839,534          |  
|                                                                 |   |                   |   |   |                    |  
|Equipment, net of accumulated depreciation                       |   | 116,601           |   |   | 18,751             |  
|Plant being developed for own use                                |   | 2,131,864         |   |   | 790,036            |  
|Deposits                                                         |   | 361,221           |   |   | 572,416            |  
|                                                                 |   |                   |   |   |                    |  
|Total assets                                                     | $ | 5,556,268         |   | $ | 4,220,737          |  
|                                                                 |   |                   |   |   |                    |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                             |   |                   |   |   |                    |  
|                                                                 |   |                   |   |   |                    |  
|Current liabilities:                                             |   |                   |   |   |                    |  
|Accounts payable and accrued liabilities                         | $ | 404,970           |   | $ | 64,766             |  
|Accounts payable and accrued
      liabilities, related parties  |   | -                 |   |   | 58,168             |  
|Demand note payable to a related party                           |   | 450,000           |   |   | 450,000            |  
|Demand notes payable                                             |   | 600,000           |   |   | 600,000            |  
|Total current liabilities                                        |   | 1,454,970         |   |   | 1,172,934          |  
|                                                                 |   |                   |   |   |                    |  
|STOCKHOLDERS' EQUITY:                                            |   |                   |   |   |                    |  
|Capital stock                                                    |   |                   |   |   |                    |  
|Common - 200,000,000 shares authorized at
      $0.001 par value |   |                   |   |   |                    |  
|78,807,012 and 76,307,012
      shares issued and outstanding    |   |                   |   |   |                    |  
|at December 31, 2006 and September 30, 2006,
      respectively  |   | 78,807            |   |   | 76,307             |  
|Additional paid in capital                                       |   | 13,055,708        |   |   | 11,537,454         |  
|Other comprehensive loss                                         |   | 30,880            |   |   | (3,995             | )
|Deficit accumulated during development
      stage               |   | (9,064,097        | ) |   | (8,561,963         | )
|Total stockholders' equity                                       |   | 4,101,298         |   |   | 3,047,803          |  
|                                                                 |   |                   |   |   |                    |  
|Total liabilities and stockholders' equity                       | $ | 5,556,268         |   | $ | 4,220,737          |  

The accompanying notes are an integral part of these consolidated
  financial statements.

Page 4

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|Solar Enertech Corp.                 
|-------------------------------------
|A Development Stage Company          
|Consolidated Statements of Operations
|(Unaudited)                          
|For the Periods Ended                
|                                     

|                                          |   |                         |   |   |                         |   |   | Cumulative
      from July 7, 2004 |  
|----------------------------------------- | - | ----------------------- | - | - | ----------------------- | - | - | ---------------------------------- | -
|                                          |   |                         |   |   |                         |   |   | (Inception) to December 31,        |  
|                                          |   | December
      31, 2006 |   |   | December
      31, 2005 |   |   | 2006                               |  
|                                          |   | (Restated)              |   |   |                         |   |   | (Restated)                         |  
|Expenses                                  |   |                         |   |   |                         |   |   |                                    |  
|Selling, general
      and administrative | $ | 406,763                 |   |   | -                       |   |   | 8,912,690                          |  
|Research and development                  |   | 101,798                 |   |   |                         |   |   | 101,798                            |  
|Total
      expenses                      |   | 508,561                 |   |   | -                       |   |   | 9,014,488                          |  
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Loss from continuing operations           |   | (508,561                | ) |   | -                       |   |   | (9,014,488                         | )
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Loss from discontinued operations         |   | -                       |   |   | (6,613                  | ) |   | (64,529                            | )
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Other income (expense)                    |   |                         |   |   |                         |   |   |                                    |  
|Interest income                           |   | 6,427                   |   |   | -                       |   |   | 14,920                             |  
|Net loss                                  | $ | (502,134                | ) | $ | (6,613                  | ) | $ | (9,064,097                         | )
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Net loss per share - basic and diluted    |   |                         |   |   |                         |   |   |                                    |  
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Continuing operations                     | $ | (0.01                   | ) | $ | -                       |   |   |                                    |  
|Discontinued operations                   |   | -                       |   |   | (0.00                   | ) |   |                                    |  
|**Net loss**                              | $ | (0.01                   | ) | $ | (0.00                   | ) |   |                                    |  
|                                          |   |                         |   |   |                         |   |   |                                    |  
|Weighted Average Shares Outstanding       |   | 77,176,577              |   |   | 136,400,000             |   |   |                                    |  

The accompanying notes are an integral part of these consolidated
  financial statements.

Page 5

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|Solar Enertech Corp.                 
|-------------------------------------
|A Development Stage Company          
|Consolidated Statements of Cash Flows
|(Unaudited)                          
|For the Periods Ended                
|                                     

|                                                                     |   |                         |   |   |                         |   |   |                         |  
|-------------------------------------------------------------------- | - | ----------------------- | - | - | ----------------------- | - | - | ----------------------- | -
|                                                                     |   |                         |   |   |                         |   |   | Cumulative from July 7, |  
|                                                                     |   |                         |   |   |                         |   |   | **2004 (Inception) to** |  
|                                                                     |   | December
      31, 2006 |   |   | December
      31, 2005 |   |   | December
      31, 2006 |  
|                                                                     |   | (Restated)              |   |   |                         |   |   | (Restated)              |  
|Cash Flows from Operating Activities                                 |   |                         |   |   |                         |   |   |                         |  
|Net loss                                                             | $ | (502,134                | ) | $ | (47,706                 | ) | $ | (9,064,097              | )
|Adjustments to reconcile net loss to                                 |   |                         |   |   |                         |   |   |                         |  
|net cash used in operating activities:                               |   |                         |   |   |                         |   |   |                         |  
|Depreciation                                                         |   | 2,685                   |   |   | -                       |   |   | 6,619                   |  
|Stock based compensation                                             |   | 9,870                   |   |   | -                       |   |   | 7,882,507               |  
|Changes in:                                                          |   |                         |   |   |                         |   |   |                         |  
|Prepaid expenses                                                     |   | 4,848                   |   |   | -                       |   |   | (35,729                 | )
|Due from related party                                               |   | (43,894                 | ) |   | -                       |   |   | (43,894                 | )
|Inventory                                                            |   | (388,501                | ) |   | -                       |   |   | (388,501                | )
|Accounts payable and accrued expenses                                |   | 341,023                 |   |   | 1,900                   |   |   | 405,792                 |  
|Accounts payable and accrued
      expenses, related parties         |   | (57,433                 | ) |   | -                       |   |   | (15,460                 | )
|Cash used in operating activities                                    |   | (633,536                | ) |   | (45,806                 | ) |   | (1,252,763              | )
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Cash flows from Investing Activities:                                |   |                         |   |   |                         |   |   |                         |  
|Acquisition of equipment                                             |   | (100,298                | ) |   | (7,992                  | ) |   | (122,983                | )
|Deposits                                                             |   | 218,433                 |   |   | -                       |   |   | (353,983                | )
|Leasehold improvements - plant                                       |   | (1,320,954              | ) |   | -                       |   |   | (2,063,674              | )
|Cash used in investing activities                                    |   | (1,202,819              | ) |   | (7,992                  | ) |   | (2,540,640              | )
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Cash flows from Financing Activities:                                |   |                         |   |   |                         |   |   |                         |  
|Proceeds from note payables                                          |   | -                       |   |   | -                       |   |   | 600,000                 |  
|Proceeds from advances from a related party                          |   | -                       |   |   | -                       |   |   | 450,000                 |  
|Proceeds from issue of common stock                                  |   | 1,500,000               |   |   | 80,000                  |   |   | 5,210,000               |  
|Cash provided by financing activities                                |   | 1,500,000               |   |   | 80,000                  |   |   | 6,260,000               |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Effect of exchange rates on cash                                     |   | 15,343                  |   |   | -                       |   |   | 11,348                  |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Net Increase in Cash                                                 |   | (321,012                | ) |   | 26,202                  |   |   | 2,477,945               |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Cash, Beginning of Period                                            |   | 2,798,957               |   |   | 21,799                  |   |   | -                       |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Cash, End of Period                                                  | $ | 2,477,945               |   | $ | 48,001                  |   | $ | 2,477,945               |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|SUPPLEMENTAL DISCLOSURES:                                            |   |                         |   |   |                         |   |   |                         |  
|Cash paid for:                                                       |   |                         |   |   |                         |   |   |                         |  
|Income tax                                                           | $ | -                       |   | $ | -                       |   | $ | -                       |  
|Interest                                                             | $ | -                       |   | $ | -                       |   | $ | -                       |  
|                                                                     |   |                         |   |   |                         |   |   |                         |  
|Non-cash investing and financing activities:                         |   |                         |   |   |                         |   |   |                         |  
|Capitalized interest related to leasehold improvements
      - plant | $ | 11,982                  |   | $ | -                       |   | $ | 43,106                  |  

The accompanying notes are an integral part of these consolidated
  financial statements.

Page 6

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|SOLAR ENERTECH CORP.                      
|------------------------------------------
|A Development Stage Company               
|Notes to Consolidated Financial Statements
|December 31, 2006                         

NOTE 1  BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of
Solar Enertech Corp. have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission, and should be read in conjunction with the
audited consolidated financial statements and notes thereto contained in Solar
Enertech's Annual Report filed with the SEC on Form 10-KSB. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosure contained in the audited
consolidated financial statements for fiscal 2006 as reported elsewhere in this
Form 10-QSB have been omitted.

NOTE 2  INVENTORY

Inventories consist of silicon and photovoltaic cells and other
component material are valued at lower of cost (first-in, first-out) or market.
Management provides a reserve to reduce inventory to its net realizable value.
Certain factors could impact the realizable value of inventory, so management
continually evaluates the recoverability based on assumptions about customer
demand and market conditions. The evaluation may take into consideration
expected demand, new product development, the effect new products might have on
the sale of existing products, product obsolescence, and other factors. The
reserve or write-down is equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and
market conditions. If actual market conditions are less favorable than those
projected by management, additional inventory reserves or write-downs may be
required. If actual market conditions are more favorable, reserves or
write-downs may be reversed.

At December 31, 2006, inventory consists of:

Raw materials
    $
      294,723Low value consumption goods
    
      470Work in progress
    
      93,308$
      388,501


Inventory is shown net of a zero reserve for slow moving and
obsolete inventory at December 31, 2006.

NOTE 3 - RELATED PARTY TRANSACTIONS

Due from related party

During the quarter ended December 31, 2006, a company
controlled by a director and officer received reimbursement for pre-operating
expenditures incurred on behalf of Solar Enertech. The payment made to this
related party exceeded the expenses incurred by $43,894, and is included in due
from a related party on the balance sheet. It is anticipated that subsequent to
quarter end, these funds will be transferred back to Solar Enertech.

NOTE 4  EQUITY TRANSACTIONS

Common stock issued for cash

In November 2006, Solar Enertech sold 2,500,000 units at $0.60
per unit, for net proceeds of $1,500,000. Each unit consisted of one common
share and one common share purchase warrant entitling the holder to acquire an
additional common share at an exercise price of $1.00, expiring November 28,
2007.

Warrants

Page 7

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In November 2006, Solar Enertech repriced all of the warrants
that were outstanding at September 30, 2006, from $1.60 to $1.00 per warrant for
the remainder of the warrants terms. Consequently, the relative fair value
attributed to the warrants changed from $1,106,000 to $1,481,000 using the same
assumptions used at the date of grant.

The allocation of proceeds from the sale in November 2006 of
2,500,000 capital stock units to the share purchase warrants was estimated at
$750,900 using the same assumptions described above.

Options

Pursuant to an option agreement dated March 1, 2006 with a
former officer and director of the Company, the President and CEO of the Company
has the right and option to purchase a total of 36,000,000 shares of common
stock of the Company at a price of $0.0001 per share, until February 10, 2010.
The options granted under the agreement vest in 3 equal installments over a
period of 3 years, with the first installment vesting immediately, and the
remaining options vesting upon 12 and 24 months after the date of the
agreement.

Pursuant to an option agreement dated March 1, 2006 with a
former officer and director of the Company, a director of the Company has the
right and option to purchase a total of 1,500,000 shares of common stock of the
Company at a price of $0.0001 per share, until February 10, 2010. The options
granted under the agreement vested immediately.

The fair value of the options granted under these agreements
was estimated at $82,253 using the Black-Scholes stock price valuation model
with the following assumptions: i) Expected share price volatility of 80.21%;
ii) Risk free interest rate of 4.65%; iii) Expected weighted average life  4
years; and iv) No dividend yield.

For the quarter ended December 31, 2006, the Company had
recorded compensation expense of $9,870 in relation to these options. Please
refer to note 6 for the restatement.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Capital investments

Pursuant to a joint research and development laboratory
agreement with Shanghai University, effective December 15, 2006 and expiring on
December 15, 2016, Solar Enertech is committed to fund the establishment of
laboratories and completion of research and development activities, as
follows:

MinimumFiscal Year
      CapitalEnding
      Investments2007
      941,6322008
      788,9352009
      814,3842010
      928,9072011
      241,770$3,715,628


NOTE 6  RESTATEMENT

Solar Enertech recently determined that it did not account for
two option agreements, as well as it did not account for the transfers of shares
from an officer to employees. Accordingly, Solar Enertech has amended its
consolidated financial statements to include stock-based compensation
charges.

Under an agreement dated March 1, 2006, the President and CEO
has the option to purchase a total of 36,000,000 shares of common stock at
$0.0001 per share until February 10, 2010. The options granted under the
agreement vest in 3 equal installments over a period of 3 years, with the first
installment vesting immediately, and the remaining options vesting upon 12 and
24 months after the date of the agreement.

Page 8

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Additionally, under another agreement dated March 1, 2006, a
former officer and director, has the right and option to purchase a total of
1,500,000 shares of common stock at $0.0001 per share, until February 10, 2010.
The options granted under the agreement vested immediately.

In July 2006, the President and CEO exercised his option and
acquired 10,750,000 shares of common stock from the former officer and
subsequently transferred 5,750,00 shares to several employees and one director.
The fair value of the shares transferred was estimated at $7,820,000, being
market price at time of transfer.

Solar Enertech has corrected these errors and recorded
stock-based compensations charges as follows:

- The fair value of the options granted under the option agreements was
  estimated at $82,253 using the Black-Scholes stock price valuation model with
  the following assumptions: i) Expected share price volatility of 80.21%; ii)
  Risk free interest rate of 4.65%; iii) Expected weighted average life  4
  years; and iv) No dividend yield. For the year ended September 30, 2006, Solar
  Enertech recorded compensation expense of $52,637 in relation to the grant
  these options, and $9,870 for the quarter ended December 31, 2006;
- The fair value of the shares transferred to employees was estimated at
  $7,820,000, being market price at time of transfer. These charges were
  recorded during the year ended September 30, 2006.

Summary information regarding options is as follows:

|                                               |              |           |          |            |                 | Options
      Outstanding | Options
      Exerciseable
|---------------------------------------------- | ------------ | --------- | -------- | ---------- | --------------- | ------------------------- | --------------------------
|                                               |              |           |          |            |                 | Weighted                  |                           
|                                               |              |           |          |            | Number          | Average                   | Weighted                  
|                                               |              |           |          |            | Outstanding as  | Remaining                 | Average                   
|                                               | # of Options |           | Exercise |            | at December 31, | Contractual               | Exercise                  
|                                               | Granted      | Expiry    | Price    | Exercised  | 2006            | Life
      (year)         | Price                     
|                                               |              |           |          |            |                 |                           |                           
|Granted to Leo Young, March 1, 2006            | 36,000,000   | 10-Feb-10 | $ 0.0001 | 10,750,000 | 25,250,000      | 2.94                      | $ 0.0001                  
|                                               |              |           |          |            |                 |                           |                           
|Granted to Frank Fang Xie, March 1,
      2006 | 1,500,000    | 10-Feb-10 | $ 0.0001 | -          | 1,500,000       | 0.17                      | $ 0.0000                  
|                                               |              |           |          |            |                 |                           |                           
|                                               | 37,500,000   |           |          | 10,750,000 | 26,750,000      | 3.11 years                | $ 0.0001                  

Our consolidated financial statements for the period from
inception (July 7, 2004) through December 31, 2006 have been restated for the
changes described above. The impact of the adjustments relating to these
transactions on the consolidated balance sheet as of December 31, 2006 and the
statements of operations for the quarter ended December 31, 2006 and the period
from inception (July 7, 2004) through December 31, 2006 are summarized
below:

As PreviouslyReported
    
    
      Adjustment
    
    
      As
        RestatedBalance SheetAdditional paid in capital
    $
      5,222,553
    
    $
      7,833,155
    
    $
      13,055,708Deficit accumulated during development stage
    
      (1,230,942
    )
    
      (7,833,155
    )
    
      (9,064,097
    )Statement of OperationsFor the quarter ended December 31,
      2006Selling, general and administrative
    
      446,245
    
    
      (39,482
    )
    
      406,763Net loss
    
      (541,616
    )
    
      39,482
    
    
      (502,134
    )Weighted Average Shares Outstanding
    
      77,176,577
    
    
      77,176,577
    
    
      77,176,577Net loss per share - Continuing operations
    
      (0.01
    )
    
      0.00
    
    
      (0.01
    )Statement of OperationsFrom inception (July 7, 2004) through
      December 31, 2006Stock based compensation
    
      49,352
    
    
      7,833,155
    
    
      7,882,507Net loss
    
      (1,230,942
    )
    
      (7,833,155
    )
    
      (9,064,097
    )


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Item 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS

We have not generated any revenues from products, services or
operations since the inception of our company. The foregoing analysis should be
read jointly with the financial statements, related notes, and the cautionary
statement regarding forward-looking statements, which appear elsewhere in this
filing.

RESULTS OF OPERATIONS

The following discussion of the plan of operation, financial
condition, results of operations, cash flows and changes in financial position
of our Company should be read in conjunction with our audited consolidated
financial statements and notes filed on Form 10-KSB on December 28, 2006 and our
restated consolidated financial statements and notes filed on Form 10-KSB/A on
April 18, 2007.

Limited Operating History

There is limited historical financial information about our
company upon which to base an evaluation of our future performance. Our company
has yet to generate revenues from operations. We cannot guarantee that we will
be successful in our business. We are subject to risks inherent in a fast
growing company, including limited capital resources, possible delays in product
development and manufacturing, and possible cost overruns due to price and cost
increases. There is no assurance that future financing will be available to our
company on acceptable terms. Additional equity financing could result in
dilution to existing shareholders.

We have financed our operations since inception primarily
through private sales of securities. As of December 31, 2006 we had
approximately $2.49 million in cash, and working capital of $1.1 million.

Three-month period ended December 31, 2006

The following table sets forth our consolidated statements of
operations for the quarter ended December 31, 2006.

RevenuesInterest income
      6,427ExpensesCorporate development and promotion
      31,578Investor relations
      36,375Professional fees
      101,607Rent
      55,300Salaries and benefits
      66,184Other,
        general and administrative
      217,517Loss from continuing
        operations
      508,561Loss from discontinued
        operations
      -Net loss
      502,134


As discussed above, in 2006, our business focus began to change
to solar energy, from home security assistance services, with the set up of our
manufacturing plant in China and the manufacturing of our first SolarE solar
modules in November 2006. Due to the significant changes, part of our results
for the September 30, 2006 and all the results for the year ended September 30,
2005 were reported as discontinued operations, and we believe that a comparison
of results of operations for the first and second quarters of the years ended
September 30, 2007 and September 30, 2007 should not be relied on as an
indication of future performance. Factors that may cause our results of
operations to fluctuate include those discussed in the Risk Factors.

Revenues

For the quarter ended December 31, 2006, we had no revenues
from operations, and interest income of $6,427. We expect to start earning
revenues in our second or third quarter of fiscal 2007, as production of the
SolarE solar modules began in our first quarter of fiscal 2007. As of December
31, 2006, we have manufactured approximately 125 panels, 75 of which are being
used as demos and test panels, with the remaining panels being available for
sale, commencing towards the end of the second quarter of fiscal 2007. fiscal
quarter . We expect to commence sell during our second or third fiscal quarter
of 2007. The Companys success depends on successful sales efforts, but also on
our ability to ramp up production.

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Expenses and general and administrative expenses

During the fiscal quarter ended December 31, 2006, the Company incurred total expenses of $508,561. These expenses were related mainly to start up costs associated with the construction and development of the Companys manufacturing
facility, and to activities associated with the maintenance of a public listing, such as communication shareholders, legal and accounting fees, and corporate development and promotion. Some of these expenses, as well as cash disbursements of
$1,310,014 in leasehold improvements (net of capitalized interest), and $100,298 for the acquisition of equipment are one time expenses resulting from start up costs of equipping the Companys Shanghai manufacturing facility. The
anticipated expenditures for the Company are described elsewhere.  Readers should not assume that expenses or other cash flows in this period are indicative of future periods as the Company is in the development stage.

Discontinued Operations

A loss of $6,613 was incurred in discontinued operations in the quarter ended December 31, 2005, as a result of operating expenses related to home security services. Amounts related to discontinued operations included in the comparative
financial statements presented herein have been reclassified to conform to the current period presentation.

Net Loss

Our net loss was $502,134 for the fiscal quarter ended December 31, 2006. The net loss reflects our expenses relating to our acquisitions and financings, the cost of additional employees to pursue our strategy, and expenditures for research and
development. These expenses have been incurred ahead of our ability to recognize material revenues from the sales of our SolarE panels.

Liquidity and Capital Resources

As of December 31, 2006, we had cash and cash equivalents of $2,477,945 and working capital of $1,491,612. Since inception, we funded our operations from private sales of equity and short term borrowings. We believe our current strategies
will provide sufficient working capital to fund our operations for at least the next 12 months assuming a steady ramp-up in production. Changes in our operating plans, an increase in our inventory, increased expenses, additional acquisitions, or
other events, may cause us to seek additional equity or debt financing in the future.

For the quarter ended December 31, 2006, we used $633,536 of cash in operations. Net cash used by operating activities reflected $4,848 in prepaid expenses, $2,685 in depreciation, $9,870 in stock based compensation, $43,894 in
due from a related party, purchase of inventory of $388,501 and an increase in accounts payable and accrued liabilities of $283,590. Investment activities used $1,202,819 of cash during the period, which was primarily related to the
leasehold improvements of our manufacturing plant associated with developing the Companys leased facilities in Shanghai, China and a reduction of $218,433 in deposit for equipment.

Financing activities provided $1,500,000 of cash during the period from private placement subscription proceeds.

Our current cash requirements are significant due to the building of silicon wafers inventory; leasehold improvements of our manufacturing plant in Shanghai, manufacturing equipment purchases; start up and other operational expenses. During the
second and third quarter of our fiscal year 2007, we expect to need significant cash as we begin to build a second production line, scheduled for completion during the first quarter of fiscal 2008. Accordingly, we expect to continue to use cash to
fund operations for at least fiscal 2007 as we expand our manufacturing capacity and our product shipments. We expect to continue to use cash to build up our inventory of silicon wafers to hedge the current shortage in the industry.

In the past, we paid cash for our inventory purchases and we are in the process of negotiating credit terms with our vendors. We also paid cash for our equipment purchases. In the future, we plan to finance some of our equipment purchases by short
term bank borrowings and by establishing a working capital line of credit.

The cost of silicon wafers, which is the primary cost of sales for our SolarE solar modules, is currently volatile and is expected to rise due to a current supply shortage. We are uncertain of the extent to which this will negatively affect our
working capital in the near future. A significant increase in cost of silicon wafers that we cannot pass on to our customers could cause us to run out of cash more quickly than our projections indicate, requiring us to raise additional funds or
curtail operations.

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Recent Financings

Common stock issued for cash

In November 2006, we sold 2,500,000 units at $0.60 per unit, for net proceeds of $1,500,000. Each unit consisted of one common share and one common share purchase warrant entitling the holder to acquire an additional common share at an
exercise price of $1.00, expiring November 28, 2007.

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management of our company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. As the number of variables and assumptions affecting the probable future resolution of the uncertainties increase, these judgments
become even more subjective and complex. Our significant accounting policies are discussed in Note 2 to our consolidated financial statements for the fiscal year ended September 30, 2006 included in this Report. We have identified the following
accounting policies, described below, as the most important to an understanding of our current financial condition and results of operations.

Currency and foreign exchange

The Company determined its functional currency is the Renminbi as substantially all of its operations are in China. The Companys reporting currency is the U.S. dollars.

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with SFAS No. 52, Foreign Currency
Translation, and are included in determining net income or loss.

For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the local currencies into U.S. dollars at the exchange rate prevailing at the balance sheet date. Revenues and expenses are
translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the financial statements. Translation adjustments resulting from the process of
translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss.

Inventory

Inventory consists of silicon and photovoltaic cells and other component material are valued at lower of cost (first-in, first-out) or market. Management provides a reserve to reduce inventory to its net realizable value. Certain factors could
impact the realizable value of inventory, so management continually evaluates the recoverability based on assumptions about customer demand and market conditions. The evaluation may take into consideration expected demand, new product development,
the effect new products might have on the sale of existing products, product obsolescence, and other factors. The reserve or write-down is equal to the difference between the cost of inventory and the estimated market value based upon assumptions
about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required. If actual market conditions are more favorable, reserves or
write-downs may be reversed.

Stock-based Compensation

The Company adopted the fair value recognition provisions of SFAS No. 123R, Share-Based Payment. Accordingly, the Company accounts for options granted to its directors and employees in accordance with Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, or APB 25, and its related interpretations, and according FASB Statement No. 123 (Revised 2004), Share-Based Payments, or SFAS 123R, which requires to recognize, as an expense,
the fair value of share options and other share-based compensation to employees.

Plan of Operations

Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There
can be no assurances that we will be successful, which would in turn significantly affect our ability to roll out our business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our
projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.

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We continue to operate with very limited administrative
support, and our current officers and directors continue to be responsible for
many duties to preserve our working capital.

Projected Expenditures Over The Next 12 Months

The following chart provides an overview of our budgeted
expenditures by major area of activity, for the next 12 months from the date of
this annual report:

|(a)    | Personnel costs in Shanghai, China and
      the United States: | $2,151,385 
|------ | --------------------------------------------------------------- | -----------
|(b)    | Production development / factory leasing costs:                 | 371,000    
|(c)    | Administration, sales and marketing
      office:               | 1,150,000  
|(d)    | General and administrative expenses:                            | 1,050,000  
|(e)    | PV production and manufacturing equipment:                      | 12,500,000 
|(f)    | Silicon material purchase                                       | 47,000,000 
|(g)    | Professional fees and expenses, regulatory
      expenses:      | 105,000    
|(h)    | Shareholder communications:                                     | 208,000    
|(i)    | Travel, Miscellaneous, Unallocated                              | 64,100     
|       |                                                                 |            
|Total: |                                                                 | $64,599,845

The amounts noted above reflect our current cash resources and
assume that we will raise, through equity or other financing, approximately
$15,000,000 in the next 12 months, and finance another $10,000,000 through
borrowings. There can be no assurance that the Company will be successful in
raising these additional funds and, if the Company is unsuccessful in raising
these additional funds, its plans for expanding operations and business
activities may have to be curtailed.

Other than as detailed above, we do not anticipate making any
major purchases of capital assets in the next 6 months, or conducting any
large-scale research and development. Any development of research and
development functions would be dependent upon securing additional equity or
other financing to add to our working capital. The Company has hired two persons
for research and development and product development research but that is the
extent of its planned research and development activities. Under US GAAP, these
activities may possibly not be classified as research and development but may be
classified as expenses given that the costs are associated with paying salaries
to the two individuals.

We believe we have sufficient cash resources to satisfy our
needs over the next twelve months. Our ability to satisfy cash requirements
thereafter will determine whether we achieve our business objectives, including
but not limited to completion of our manufacturing facilities and production
lines. Should we require additional cash in the future, there can be no
assurance that we will be successful in raising additional debt or equity
financing on terms acceptable to our company, if at all.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined
in Item 303(c)(2) of Regulation S-B.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and
Procedures.

Solar Enertech Corp. maintains disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in its Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to its management, including its
Chief Executive Officer, to allow timely decisions regarding required disclosure
based closely on the definition of "disclosure controls and procedures" in Rule
13a-15(e). In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.

At the end of the period covered by this Quarterly Report, we
  carried out an evaluation, under the supervision and with the participation
  of our management, including its Chief Executive Officer, of the effectiveness
  of the design and operation of our

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disclosure controls and procedures. Based upon the foregoing, our Chief Executive Officer concluded that, as of December 31, 2006, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed in
the Company's Exchange Act reports was recorded, processed, summarized and reported on a timely basis.

In connection with the completion of its interim review of the financial statements of Solar Enertech Corp. for the three months ended December 31, 2006, Malone & Bailey, PC identified deficiencies in our internal controls related to the
accounting for plant construction in process, debt and related party transactions. The adjustments to these accounts and the footnote disclosure deficiencies were detected in the review process and have been appropriately recorded and disclosed in
this Form 10-QSB. We are in the process of improving our internal controls by providing training and support to our accounting staff, referring to the expertise of a consultant in the treatment of new transactions, assisting in the development and
implementation of accounting policies and procedures, and by implementing an internal review process. Additional effort is needed to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes
and procedures. Our management and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.

Furthermore, we carried out an evaluation, under the supervision and with the participation of our management, including our President and acting Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14 as of the end of period covered by this report. Based upon the foregoing, our President and our acting Chief Financial Officer concluded that our disclosure controls and procedures are not
effective to ensure that all material information required to be disclosed in this Annual Report has been made known to him in a timely fashion, because of an error in internal identification and valuation of stock issued for employee services. We
restated our consolidated financial statements for the year ended September 30, 2006 in order to correct the accounting in such financial statements with respect to recognize stock-based compensation in accordance with SFAS 123(R).

We are in the process of improving our internal control over financial reporting in an effort to remediate this deficiency through improved supervision and training of our accounting staff. This deficiency has been disclosed to our Board of
Directors. We believe that this effort is sufficient to fully remedy this deficiency and we are continuing our efforts to improve and strengthen our control processes and procedures. Our President and acting Chief Financial Officer and directors
will continue to work with our auditors and other outside advisors to ensure that our that our controls and procedures are adequate and effective.

(b) Changes in Internal Control Over Financial Reporting.

Our management, with the participation of the Chief Executive Officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Pursuant to Rule 601 of Regulation SB, the following
exhibits are included herein or incorporated by reference.

|3.1  | Articles of Incorporation, Incorporated by reference to
      our SB2 Registration Statement Amendment 7 filed on May 5, 2005, SEC File
      Number 333-120926.                     
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                      
|3.2  | By-laws, Incorporated by reference to our SB2
      Registration Statement Amendment 7 filed on May 5, 2005, SEC File Number
      333-120926.                                       
|     |                                                                                                                                                                                      
|3.4  | Article of Merger filed with the Secretary of State of
      Nevada, incorporated by reference from Exhibit 3.1 to the Form 8-K filed
      April 10, 2006.                          
|     |                                                                                                                                                                                      
|4.1  | Summary of Lease Agreement between the Company and
      Shanghai Jin Qiao Technology Park Ltd., incorporated by reference from
      Exhibit 4.1 to the Form 8-K filed May 12, 2006.
|     |                                                                                                                                                                                      
|10.1 | Management agreement with Leo Young, incorporated by
      reference from Exhibit 10.1 to our Form 8-K filed March 10,
2006.                                                         
|     |                                                                                                                                                                                      
|10.2 | Agency Agreement between the Company and its Shanghai
      Agent dated July 18, 2006., incorporated by reference from Exhibit 10.1 to
      our Form 8-K/A filed December 18, 2006. 
|     |                                                                                                                                                                                      
|16.1 | Letter from former principal accountants, Morgan &
      Company, incorporated by reference from Exhibit 16.1 to our Form 8-K filed
      December 9, 2006.                          
|     |                                                                                                                                                                                      
|31.1 | Section 302 Certification 
        Chief Executive Officer                                                                                                                          
|     |                                                                                                                                                                                      
|31.2 | Section 302 Certification 
        Chief Financial Officer                                                                                                                          
|     |                                                                                                                                                                                      
|32.1 | Certification Pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002  Chief Executive Officer.                    
|     |                                                                                                                                                                                      
|32.2 | Certification Pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002  Chief Financial Officer.                    

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on this
20thday of April, 2007.

|                     | SOLAR ENERTECH CORP.
|-------------------- | --------------------
|                     |                     
|                     |                     
|Date: April 20, 2007 |                     
|                     | By:                 
|                     |                     
|                     |                     
|                     |                     
|Date: April 20, 2007 |                     
|                     | By:                 
|                     |                     
|                     |                     
|                     |                     
|Date: April 20, 2007 | By:                 
|                     |                     
|                     |                     

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