| Delaware                                                       |   | 13-4343369                        |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |

| Large accelerated filer o                                             |   | Accelerated filer o         |
|-----------------------------------------------------------------------|--------|-----------------------------|
| Non-accelerated filer o (do not check if a smaller reporting company) |   | Smaller reporting company x |

----

|                           |   |                                                                                  |   | Page   |
|--------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|
| PART I - FINANCIAL INFORMATION |   |                                                                                  |
|                           |   |                                                                                  |   |   |
| Item 1.                        |   | Financial Statements                                                                  |   | F-1    |
|                           |   |                                                                                  |   |   |
| Item 2.                        |   | Management's Discussion and Analysis of Financial Condition and Results of Operations |   | 3      |
|                           |   |                                                                                  |   |   |
| Item 4.                        |   | Controls and Procedures                                                               |   | 10     |
|                           |   |                                                                                  |   |   |
| PART II - OTHER INFORMATION    |   |                                                                                  |
|                           |   |                                                                                  |   |   |
| Item 6.                        |   | Exhibits                                                                              |   | 10     |
|                           |   |                                                                                  |
| Signatures                     |   | 11                                                                                    |

----

|                                                                                                                                                                                                                            |   | March 31, 2011    |   |   | December 31, 2010 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                                                                          |   |  (unaudited) |   |   |  (unaudited) |   |
| Current assets:                                                                                                                                                                                                                 |   |              |   |   |              |   |
| Cash and cash equivalents                                                                                                                                                                                                       |   | $                 | 1,596  |   |              | $      | 3,390 |   |
| Accounts receivable, net of allowance for doubtful accounts of $ 269 and $ 137 at March 31, 2011 and December 31, 2010, respectively                                                                                            |   |              | 7,590  |   |              |   | 14,365 |   |
| Inventory                                                                                                                                                                                                                       |   |              | 11,516 |   |              |   | 15,371 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                       |   |              | 1,584  |   |              |   | 1,486 |   |
| Costs and estimated earnings in excess of billings on uncompleted contracts                                                                                                                                                     |   |              | 2,288  |   |              |   | 1,108 |   |
| Other receivables                                                                                                                                                                                                               |   |              | 26     |   |              |   | 226 |   |
| Deferred tax assets                                                                                                                                                                                                             |   |              | 461    |   |              |   | 258 |   |
| Total current assets                                                                                                                                                                                                            |   |              | 25,061 |   |              |   | 36,204 |   |
|                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Property and equipment, net                                                                                                                                                                                                     |   |              | 468    |   |              |   | 463 |   |
| Intangible assets, net                                                                                                                                                                                                          |   |              | 794    |   |              |   | 812 |   |
| Goodwill                                                                                                                                                                                                                        |   |              | 12,063 |   |              |   | 11,368 |   |
| Total assets                                                                                                                                                                                                                    |   | $                 | 38,386 |   |              | $      | 48,847 |   |
|                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Current liabilities:                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                                |   |              | 11,508 |   |              |   | 17,191 |   |
| Accrued liabilities                                                                                                                                                                                                             |   |              | 4,856  |   |              |   | 4,279 |   |
| Billings in excess of costs and estimated earnings on uncompleted contracts                                                                                                                                                     |   |              | 8,420  |   |              |   | 13,200 |   |
| Taxes payable                                                                                                                                                                                                                   |   |              | 535    |   |              |   | 527 |   |
| Customer deposits                                                                                                                                                                                                               |   |              | 268    |   |              |   | 159 |   |
| Borrowings, current                                                                                                                                                                                                             |   |              | 638    |   |              |   | 358 |   |
| Total current liabilities                                                                                                                                                                                                       |   |              | 26,225 |   |              |   | 35,714 |   |
|                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Borrowings, non-current                                                                                                                                                                                                         |   |              | 396    |   |              |   | 219 |   |
| Contingent consideration liability                                                                                                                                                                                              |   |              | -      |   |              |   | 1,472 |   |
| Total liabilities                                                                                                                                                                                                               |   |              | 26,621 |   |              |   | 37,405 |   |
|                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Commitments and contingencies (Notes 7 and 8)                                                                                                                                                                                   |   |              |   |   |              |   |   |   |
| Shareholders' equity:                                                                                                                                                                                                           |   |              |   |   |              |   |   |   |
| Series A convertible preferred stock, par value $.0001 per share: 5,000,000 shares designated; 20,000,000 shares of preferred stock authorized; 3,500,000 shares issued and outstanding at March 31, 2011 and December 31, 2010 |   |              | -      |   |              |   | - |   |
| Series B convertible preferred stock, par value $.0001 per share: 2,800,000 shares designated; 20,000,000 shares of preferred stock authorized; 2,800,000 shares issued and outstanding at March 31, 2011 and December 31, 2010 |   |              | -      |   |              |   | - |   |
| Common stock, par value $.0001 per share; 500,000,000 shares authorized; 28,918,876 and 29,099,750 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively                                          |   |              | 3      |   |              |   | 3 |   |
| Additional paid-in-capital                                                                                                                                                                                                      |   |              | 22,024 |   |              |   | 18,906 |   |
| Accumulated deficit                                                                                                                                                                                                             |   |              | (9,840 | )      |              |   | (6,101 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                                            |   |              | (422   | )      |              |   | (1,366 | ) |
| Total shareholders' equity                                                                                                                                                                                                      |   |              | 11,765 |   |              |   | 11,442 |   |
| Total liabilities and shareholders' equity                                                                                                                                                                                      |   | $                 | 38,386 |   |              | $      | 48,847 |   |

----

|                                                         |   | For the Three Months Ended March 31, |    |
|--------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                         |   | 2011                                 |    |   | 2010 |   |
|                                                         |   | (unaudited)                          |    |   | (unaudited) |   |
| Revenues                                                     |   | $                                    | 12,811  |   |   | $ | 3,399 |   |
| Cost of revenues                                             |   |                                 | (12,805 | ) |   |   | (3,368 | ) |
| Gross margin                                                 |   |                                 | 6       |   |   |   | 31 |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Operating expenses:                                          |   |                                 |    |   |   |   |   |   |
| Selling and marketing                                        |   |                                 | 1,023   |   |   |   | 742 |   |
| General and administrative                                   |   |                                 | 1,833   |   |   |   | 1,659 |   |
| Total operating expenses                                     |   |                                 | 2,856   |   |   |   | 2,401 |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Operating loss                                               |   |                                 | (2,850  | ) |   |   | (2,370 | ) |
|                                                         |   |                                 |    |   |   |   |   |   |
| Other income (expense):                                      |   |                                 |    |   |   |   |   |   |
| Interest expense                                             |   |                                 | (30     | ) |   |   | (37 | ) |
| Other income (expense)                                       |   |                                 | (1      | ) |   |   | - |   |
| Change in fair value of contingent consideration liability   |   |                                 | (92     | ) |   |   | 1,254 |   |
| Loss on extinguishment of contingent consideration liability |   |                                 | (952    | ) |   |   | - |   |
| Interest income                                              |   |                                 | -       |   |   |   | 1 |   |
| Total other (expense), income net                       |   |                                 | (1,075  | ) |   |   | 1,218 |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Loss before income taxes                                     |   |                                 | (3,925  | ) |   |   | (1,152 | ) |
|                                                         |   |                                 |    |   |   |   |   |   |
| Income tax benefit                                           |   |                                 | 186     |   |   |   | 346 |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Net loss                                                     |   | $                                    | (3,739  | ) |   | $ | (806 | ) |
|                                                         |   |                                 |    |   |   |   |   |   |
| Loss Per Share:                                              |   |                                 |    |   |   |   |   |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Basic                                                        |   | $                                    | (0.14   | ) |   | $ | (0.03 | ) |
| Diluted                                                      |   | $                                    | (0.14   | ) |   | $ | (0.03 | ) |
|                                                         |   |                                 |    |   |   |   |   |   |
| Weighted Average Shares Outstanding:                         |   |                                 |    |   |   |   |   |   |
|                                                         |   |                                 |    |   |   |   |   |   |
| Basic                                                        |   |                                 | 27,062  |   |   |   | 26,619 |   |
| Diluted                                                      |   |                                 | 27,062  |   |   |   | 26,619 |   |

----

|                                                                        |   | For the Three Months Ended March 31, |   |
|-----------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                        |   | 2011                                 |   |   | 2010 |   |
|                                                                        |   | (unaudited)                          |   |   | (unaudited) |   |
| Cash flows from operating activities:                                       |   |                                 |   |   |   |   |
| Net loss                                                                    |   | $                                    | (3,739 | ) |   | $ | (806 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                                 |   |   |   |   |   |   |
| Gain on sale of assets                                                      |   |                                 | (3     | ) |   |   | - |   |
| Share-based compensation                                                    |   |                                 | 602    |   |   |   | 246 |   |
| Depreciation and amortization                                               |   |                                 | 76     |   |   |   | 90 |   |
| Change in fair value of contingent consideration liability                  |   |                                 | 92     |   |   |   | (1,254 | ) |
| Loss on extinguishment of contingent consideration liability                |   |                                 | 952    |   |   |   | - |   |
| Deferred taxes                                                              |   |                                 | (189   | ) |   |   | (351 | ) |
| Changes in operating assets and liabilities:                                |   |                                 |   |   |   |   |   |   |
| Accounts receivable                                                         |   |                                 | 7,337  |   |   |   | 2,151 |   |
| Inventory                                                                   |   |                                 | 4,070  |   |   |   | 488 |   |
| Prepaid expenses and other current assets                                   |   |                                 | 86     |   |   |   | (181 | ) |
| Costs and estimated earnings in excess of billings on uncompleted contracts |   |                                 | (1,100 | ) |   |   | (606 | ) |
| Other receivables                                                           |   |                                 | 207    |   |   |   | (28 | ) |
| Accounts payable                                                            |   |                                 | (6,218 | ) |   |   | (1,606 | ) |
| Accrued liabilities                                                         |   |                                 | 472    |   |   |   | (657 | ) |
| Billings in excess of costs and estimated earnings on uncompleted contracts |   |                                 | (4,789 | ) |   |   | 204 |   |
| Taxes payable                                                               |   |                                 | (86    | ) |   |   | (28 | ) |
| Customer deposits                                                           |   |                                 | 101    |   |   |   | - |   |
| Net cash used in operating activities                                       |   |                                 | (2,127 | ) |   |   | (2,338 | ) |
|                                                                        |   |                                 |   |   |   |   |   |   |
| Cash flows from investing activities:                                       |   |                                 |   |   |   |   |   |   |
| Acquisition of property and equipment                                       |   |                                 | (42    | ) |   |   | (18 | ) |
| Net cash used in investing activities                                       |   |                                 | (42    | ) |   |   | (18 | ) |
|                                                                        |   |                                 |   |   |   |   |   |   |
| Cash flows from financing activities:                                       |   |                                 |   |   |   |   |   |   |
| Principal payments on borrowings                                            |   |                                 | (556   | ) |   |   | (153 | ) |
| Proceeds from borrowings including line of credit                           |   |                                 | 848    |   |   |   | 173 |   |
| Cost related to share registration                                          |   |                                 | -      |   |   |   | (53 | ) |
| Net cash provided by (used in) financing activities                         |   |                                 | 292    |   |   |   | (33 | ) |
| Effect of foreign currency                                                  |   |                                 | 83     |   |   |   | (71 | ) |
| Decrease in cash and cash equivalents                                       |   |                                 | (1,794 | ) |   |   | (2,460 | ) |
| Cash and cash equivalents at beginning of period                            |   |                                 | 3,390  |   |   |   | 3,792 |   |
| Cash and cash equivalents at end of period                                  |   | $                                    | 1,596  |   |   | $ | 1,332 |   |
|                                                                        |   |                                 |   |   |   |   |   |   |
| Supplemental cash flow information:                                         |   |                                 |   |   |   |   |   |   |
| Interest paid                                                               |   | $                                    | 30     |   |   | $ | 31 |   |
| Taxes paid                                                                  |   | $                                    | 209    |   |   | $ | - |   |
|                                                                        |   |                                 |   |   |   |   |   |   |
| Noncash investing and financing activities:                                 |   |                                 |   |   |   |   |   |   |
| Reclassification of contingent consideration liability to equity            |   | $                                    | 2,516  |   |   |   |   |   |
| Financing of prepaid insurance premiums through short term notes payable    |   | $                                    | 126    |   |   |   |   |   |

----

|                                                                  |   |         |   |   |                     |   |   |                     |   |   |              |   |   |        |   |   | Accumulated        |   |   |    |   |
|-----------------------------------------------------------------------|--------|--------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------------|--------|--------|-------------|--------|--------|--------------------|--------|--------|---------|--------|
|                                                                  |   | Common Stock |   |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   | AdditionalPaid-In |   |   | Accumulated |   |   | OtherComprehensive |   |   |    |   |
|                                                                  |   | Shares       |   |   | Amount                   |   |   | Shares                   |   |   | Amount            |   |   | Shares      |   |   | Amount             |   |   | Capital |   |   | Deficit |   |   | Loss |   |   | Total |   |
| Balance at January 1, 2011                                            |   |         | 29,100 |   |                     | $      | 3      |                     |   |   | 3,500             |   |   | $           | -      |   |               |   | 2,800  |    |   | $ | - |   |   | $ | 18,906 |   |   | $ | (6,101 | ) |   | $ | (1,366 | ) |   | $ | 11,442 |   |
|                                                                  |   |         |   |   |                     |   |   |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                              |   |         |   |   |                     |   |   |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   |   |   |   |   | (3,739 | ) |   |   |   |   |   |   | (3,739 | ) |
| Foreign currency translation adjustment                               |   |         |   |   |                     |   |   |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 944 |   |   |   | 944 |   |
| Comprehensive loss                                                    |   |         |   |   |                     |   |   |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,795 | ) |
| Extinguishment of contingent consideration liability for common stock |   |         | (453   | )      |                     |   | -      |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   | 2,516 |   |   |   |   |   |   |   |   |   |   |   | 2,516 |   |
| Share-based compensation for common stock                             |   |         | 272    |   |                     |   | -      |                     |   |   |              |   |   |        |   |   |               |   |   |    |   |   |   |   |   |   | 602 |   |   |   |   |   |   |   |   |   |   |   | 602 |   |
| Balance at March 31, 2011                                             |   |         | 28,919 |   |                     | $      | 3      |                     |   |   | 3,500             |   |   | $           | -      |   |               |   | 2,800  |    |   | $ | - |   |   | $ | 22,024 |   |   | $ | (9,840 | ) |   | $ | (422 | ) |   | $ | 11,765 |   |

----

----

|                                                            |   | For the Three Months EndedMarch 31, |   |
|-----------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                            |   | 2011                                |   |   | 2010 |   |
|                                                            |   | (in thousands)                      |   |
| Beginning accrued warrant balance                               |   | $                                   | 577    |   |   | $ | 359 |   |
|                                                            |   |                                |   |   |   |   |   |   |
| Accruals related to warranties issued during period             |   |                                | 27     |   |   |   | 23 |   |
|                                                            |   |                                |   |   |   |   |   |   |
| Reduction for labor payments and claims made under the warranty |   |                                | (15    | ) |   |   | (27 | ) |
|                                                            |   |                                |   |   |   |   |   |   |
| Ending accrued warranty balance                                 |   | $                                   | 589    |   |   | $ | 355 |   |

----

|                                 |   | For the Three Months Ended March 31,  |   |
|--------------------------------------|--------|---------------------------------------|--------|
|                                 |   | 2011                                  |   |   | 2010 |   |
|                                 |   | (in thousands, except per share data) |   |
| Net loss                             |   | $                                     | (3,739 | ) |   | $ | (806 | ) |
| Loss Per Share:                      |   |                                  |   |   |   |   |   |   |
| Basic                                |   | $                                     | (0.14  | ) |   | $ | (0.03 | ) |
| Diluted                              |   | $                                     | (0.14  | ) |   | $ | (0.03 | ) |
|                                 |   |                                  |   |   |   |   |   |   |
| Weighted Average Shares Outstanding: |   |                                  |   |   |   |   |   |   |
| Basic                                |   |                                  | 27,062 |   |   |   | 26,619 |   |
| Diluted                              |   |                                  | 27,062 |   |   |   | 26,619 |   |

----

|                                         |   | For the Three Months Ended March 31, |   |
|----------------------------------------------|--------|--------------------------------------|--------|
|                                         |   | 2011                                 |   |   | 2010 |   |
|                                         |   | (in thousands)                       |   |
| Beginning balance                            |   | $                                    | 11,368 |   |   | $ | 12,254 |   |
| Changes due to foreign currency fluctuations |   |                                 | 695    |   |   |   | (722 | ) |
| Ending balance                               |   | $                                    | 12,063 |   |   | $ | 11,532 |   |

|           |   | March 31,      |   |   | December 31, |   |
|----------------|--------|----------------|--------|--------|--------------|--------|
|           |   | 2011           |   |   | 2010         |   |
|           |   | (in thousands) |   |
| Other European |   | $              | 483    |   |         | $      | 483 |   |
| Italy          |   |           | 11,580 |   |         | $      | 10,885 |   |
|           |   | $              | 12,063 |   |         | $      | 11,368 |   |

|                          |   | March 31,      |   |   | December 31, |   |
|-------------------------------|--------|----------------|--------|--------|--------------|--------|
|                          |   | 2011           |   |   | 2010         |   |
|                          |   | (in thousands) |   |
| Payroll                       |   | $              | 1,467  |   |         | $      | 1,459 |   |
| Warranty reserve              |   |           | 589    |   |         |   | 577 |   |
| Sales and local taxes         |   |           | 369    |   |         |   | 1,511 |   |
| Accrued subcontractor's costs |   |           | 1,337  |   |         |   | 407 |   |
| Other operational accruals    |   |           | 1,094  |   |         |   | 325 |   |
|                          |   | $              | 4,856  |   |         | $      | 4,279 |   |

----

| Through March 31, |   | Amount |   |
|-------------------|--------|--------|--------|
| 2012              |   | $      | 638    |   |
| 2013              |   | $      | 115    |   |
| 2014              |   | $      | 100    |   |
| 2015              |   | $      | 97     |   |
| 2016              |   | $      | 84     |   |

| (i) | 375,000 shares for each ten million Euros ( € 10 million, or approximately $14.2 million) worth of Sales (as defined below) achieved by Premier Power Italy from July 9, 2009, the escrow opening date, to December 31, 2009 (the “First Issuance ”), with the maximum number of shares released as part of the First Issuance to be 1,500,000 shares (any number of shares not issuable as part of the First Issuance solely due to the fact that the 1,500,000 shares threshold was exceeded is hereinafter referred to as the “ Excess Issuable Amount ” ); |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | 50% of the Excess Issuable Amount, if any, plus 200,000 shares for each ten million Euros ( € 10 million, or approximately $14.2 million) worth of Sales achieved by Premier Power Italy from January 1, 2010 to December 31, 2010 (the “Second Issuance) ”). The maximum combined number of shares to be released as part of the First Issuance and the Second Issuance, in the aggregate, shall not exceed 3,000,000 shares; and |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | 100,000 shares for each ten million Euros ( € 10 million, or approximately $14.2 million) worth of Sales achieved by Premier Power Italy from January 1, 2011 to December 31, 2011 (the “Third Issuance ”). The maximum combined number of shares to be released as part of the First Issuance, the Second Issuance, and the Third issuance, in the aggregate, shall not exceed 3,000,000 shares. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                 |   | Contingent Consideration Liability |   |
|------------------------------------------------------|--------|------------------------------------|--------|
|                                                 |   | (in thousands)                     |   |
| Balance at December 31, 2010                         |   | $                                  | 1,472  |   |
| Increase in fair value                               |   |                               | 92     |   |
| Extinguishment of contingent consideration liability |   |                               | (1,564 | ) |
| Balance at March 31, 2011                            |   | $                                  | -      |   |

| Through March 31, |   | Amount |   |
|-------------------|--------|--------|--------|
| 2012              |   | $      | 111    |   |
| 2013              |   |   | 96     |   |
| 2014              |   |   | 69     |   |
| 2015              |   |   | 30     |   |
| 2016              |   |   | 10     |   |
|              |   | $      | 316    |   |

----

|                                        |   | Number of Shares |      |   | Weighted- Average Fair Value |   |   | Weighted- Average Exercise Price |   |   | Vested |   |
|---------------------------------------------|--------|------------------|-----------|--------|------------------------------|--------|--------|----------------------------------|--------|--------|--------|--------|
| Outstanding at January 1, 2011              |   |             | 2,517,229 |   |                         | $      | 2.32   |                             |   | $      | 3.75   |   |   |   | 488,092 |   |
|  Granted during the period             |   |             | 161,000   |   |                         | $      | 0.71   |                             |   | $      | 1.00   |   |   |   |   |   |
|  Forfeited/cancelled during the period |   |             | (392,000  | )      |                         | $      | 2.36   |                             |   | $      | 3.07   |   |   |   |   |   |
| Outstanding at March 31, 2011               |   |             | 2,286,229 |   |                         | $      | 2.24   |                             |   | $      | 3.58   |   |   |   | 271,071 |   |

|                                          |   | For the Three Months EndedMarch 31, |   |
|-----------------------------------------------|--------|-------------------------------------|--------|
|                                          |   | 2011                                |   |   | 2010 |   |
|                                          |   | (in thousands)                      |   |
| Cost of revenues                              |   | $                                   | 43     |   |   | $ | 90 |   |
| Selling and marketing                         |   |                                | 275    |   |   |   | 25 |   |
| General and administrative                    |   |                                | 284    |   |   |   | 131 |   |
| Total share-based compensation expense        |   | $                                   | 602    |   |   | $ | 246 |   |
|                                          |   |                                |   |   |   |   |   |   |
| Stock options awards to employees             |   | $                                   | 335    |   |   |   | 201 |   |
| Common stock and restricted stock grants |   |                                | 267    |   |   |   | 45 |   |
| Total share-based compensation expense        |   | $                                   | 602    |   |   | $ | 246 |   |

----

|                     |   | Number of Options |      |   | Weighted Average Exercise Price |   |   | Average Remaining Contractual Term (in years) |   |   | Aggregate Intrinsic Value |   |
|--------------------------|--------|-------------------|-----------|--------|---------------------------------|--------|--------|-----------------------------------------------|--------|--------|---------------------------|--------|
| Options expected to vest |   |              | 1,021,014 |   |                            | $      | 2.69   |                                          |   |   | 8.18                      |   |   | $ | - |   |

| Expected volatility                   |   |      | 81.10  | %      |
|---------------------------------------|--------|-----------|--------|--------|
| Expected dividends                    |   |      | 0.00   | %      |
| Expected term                         |   | 6.2 years |   |
| Risk-free interest rate               |   |      | 2.49   | %      |
| Weighted-average fair value per share |   | $         | 0.71   |   |

|                           |   | Number of Shares |     |   | Weighted Average Fair Price |   |
|--------------------------------|--------|------------------|----------|--------|-----------------------------|--------|
| Outstanding at January 1, 2011 |   |             | 183,000  |   |                        | $      | 2.80 |   |
| Granted                        |   |             | 515,000  |   |                        | $      | 1.00 |   |
| Vested and issued              |   |             | (272,000 | )      |                        | $      | 1.50 |   |
| Forfeited                      |   |             | (7,500   | )      |                        | $      | 1.16 |   |
| Outstanding at March 31, 2011  |   |             | 418,500  |   |                        | $      | 1.46 |   |

----

|   | ● | Level 1, defined as observable inputs such as quoted prices in active markets for identical assets. |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | ● | Level 2, defined as observable inputs other than Level 1 prices.  They include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in a market that is not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   | March 31, 2011 |   |   | December 31, 2010 |   |
|---------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                  |   | (in thousands) |   |   | (in thousands)    |   |
|                                  |   | Level 1        |   |   | Level 2           |   |   | Level 3 |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                                  |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities: Contingent consideration |   | $              | -      |   |              | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,472 |   |

|   | ● | North America – consists of (i) commercial ground mount or rooftop solar energy projects generally ranging from 100kWh to 20MW provided to corporate, municipal, agricultural, and utility customers in the United States and Canada and (ii) residential that consists mainly of rooftop solar installations generally ranging from 5kWh to 40KWh provided to residential customers primarily in California.  In 2011, the Company determined that it would wind down its residential activities in this segment.  The Company expects to complete the winding down of residential operations during the quarter ended June 30, 2011.  The Company does not distinguish the cashflows and operating results of its residential activities from the North America segment as a whole and as the North America segment is managed as a single operating unit the Company determined that its residential operations did not meet the requirement for presentation as discontinued operations.  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | Italy – consists of distribution, ground mount, roof mount, and solar power plant installations, ranging from 10 kWh to 2 mWh.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | ● | Other European – consists of rooftop solar installations generally ranging 5 kWh to 1 MW provided primarily to businesses that own commercial buildings or warehouses.  The segment primarily serves countries other than Italy.   In addition, our Other European segment consists of large scale international distribution and business development as well as EPC. The service we provide to our customers consists of large scale procurement, EPC, and consulting. Thru our relationship with several key manufacturers we can provide pricing and availability advantages over the competition.                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|                     |   | For the Three Months Ended March 31, 2011 |   |
|--------------------------|--------|-------------------------------------------|--------|
|                     |   | North America                             |   |   | Italy |   |   | Other European |   |   | Total |   |
|                     |   | (in thousands)                            |   |
| Revenues                 |   | $                                         | 7,374  |   |   | $ | 5,064 |   |   | $ | 373 |   |   | $ | 12,811 |   |
| Cost of revenues         |   |                                      | (7,840 | ) |   |   | (4,619 | ) |   |   | (346 | ) |   |   | (12,805 | ) |
| Gross (loss) margin |   | $                                         | (466   | ) |   | $ | 445 |   |   | $ | 27 |   |   |   | 6 |   |
| Total operating expenses |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   | (2,856 | ) |
| Operating loss           |   |                                      |   |   |   |   |   |   |   |   |   |   |   | $ | (2,850 | ) |

|                     |   | For the Three Months Ended March 31, 2010 |   |
|--------------------------|--------|-------------------------------------------|--------|
|                     |   | North America                             |   |   | Italy |   |   | Other European |   |   | Total |   |
|                     |   | (in thousands)                            |   |
| Revenues                 |   | $                                         | 971    |   |   | $ | 926 |   |   | $ | 1,502 |   |   | $ | 3,399 |   |
| Cost of revenues         |   |                                      | (1,185 | ) |   |   | (975 | ) |   |   | (1,208 | ) |   |   | (3,368 | ) |
| Gross (loss) margin      |   | $                                         | (214   | ) |   | $ | (49 | ) |   | $ | 294 |   |   |   | 31 |   |
| Total operating expenses |   |                                      |   |   |   |   |   |   |   |   |   |   |   |   | (2,401 | ) |
| Operating loss           |   |                                      |   |   |   |   |   |   |   |   |   |   |   | $ | (2,370 | ) |

----

----

----

|                   |   | For the Three Months Ended March 31, |   |
|------------------------|--------|-------------------------------------------|--------|
| (Dollars in thousands) |   | 2011                                      |   |   | 2010 |   |   | Change % |   |
| Revenues               |   |                                      |   |   |   |   |   |   |   |
|  North America    |   | $                                         | 7,374  |   |   | $ | 971 |   |   |   | 659 | % |
|  Italy            |   |                                      | 5,064  |   |   |   | 926 |   |   |   | 447 | % |
|  Other European   |   |                                      | 373    |   |   |   | 1,502 |   |   |   | -75 | % |
| Total revenues         |   | $                                         | 12,811 |   |   | $ | 3,399 |   |   |   | 277 | % |

|                                    |   | For the Three Months Ended March 31, |   |
|-----------------------------------------|--------|--------------------------------------|--------|
| (Dollars in thousands)                  |   | 2011                                 |   |   | 2010 |   |   | Change % |   |
| Cost of Revenues                        |   |                                 |   |   |   |   |   |   |   |
|    North America              |   | $                                    | 7,840  |   |   | $ | 1,185 |   |   |   | 562 | % |
|    Italy                      |   |                                 | 4,619  |   |   |   | 975 |   |   |   | 374 | % |
|    Other European             |   |                                 | 346    |   |   |   | 1,208 |   |   |   | -71 | % |
|                                    |   | $                                    | 12,805 |   |   | $ | 3,368 |   |   |   | 280 | % |
|                                    |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation included above |   | $                                    | 43     |   |   | $ | 90 |   |   |   | -52 | % |
|                                    |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Gross (loss) Margin Percentage     |   |                                 |   |   |   |   |   |   |   |   |   |   |
|    North America              |   |                                 | -6.3   | % |   |   | -22.0 | % |   |   |   |   |
|    Italy                      |   |                                 | 8.8    | % |   |   | -5.3 | % |   |   |   |   |
|    Other European             |   |                                 | 7.2    | % |   |   | 19.6 | % |   |   |   |   |
|                                    |   |                                 | 0.0    | % |   |   | 0.9 | % |   |   |   |   |

----

|                                     |   | For the Three Months Ended March 31, |   |
|------------------------------------------|--------|--------------------------------------|--------|
| (Dollars in thousands)                   |   | 2011                                 |   |   | 2010 |   |   | Change % |   |
| Selling and marketing expenses           |   | $                                    | 1,023  |   |   | $ | 742 |   |   |   | 37.9 | % |
| General and administrative expenses      |   | $                                    | 1,833  |   |   | $ | 1,659 |   |   |   | 10.5 | % |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| As a percent of revenue:                 |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Selling and marketing expenses           |   |                                 | 8.0    | % |   |   | 21.8 | % |   |   |   |   |
| General and administrative expenses      |   |                                 | 14.3   | % |   |   | 48.8 | % |   |   |   |   |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation included above: |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Selling and marketing expenses           |   | $                                    | 275    |   |   | $ | 25 |   |   |   | 1000.0 | % |
| General and administrative expenses      |   | $                                    | 284    |   |   | $ | 131 |   |   |   | 116.8 | % |

----

|                                                |   | For the Three Months EndedMarch 31, |   |
|-----------------------------------------------------|--------|-------------------------------------|--------|
|                                                |   | 2011                                |   |   | 2010 |   |
|                                                |   |                                |   |   |   |   |
| Net cash used in operating activities               |   | $                                   | (2,127 | ) |   | $ | (2,338 | ) |
| Net cash used in investing activities               |   | $                                   | (42    | ) |   | $ | (18 | ) |
| Net cash provided by (used in) financing activities |   | $                                   | 292    |   |   | $ | (33 | ) |
| Decrease in cash and cash equivalents               |   | $                                   | (1,794 | ) |   | $ | (2,460 | ) |

----

----

|                     |   | Payments Due by Period |   |
|--------------------------|--------|------------------------|--------|
|                     |   | Total                  |   |   | Less than 1 year |   |   | 1-3 years |   |   | 3-5 years |   |
|                     |   | (in thousands)         |   |
| Contractual Obligations: |   |                   |   |   |   |   |   |   |   |   |   |   |
| Bank Indebtedness        |   | $                      | 1,140  |   |   | $ | 691 |   |   | $ | 254 |   |   | $ | 195 |   |
| Operating Leases         |   |                   | 315    |   |   |   | 110 |   |   |   | 165 |   |   |   | 40 |   |
|                     |   | $                      | 1,455  |   |   | $ | 801 |   |   | $ | 419 |   |   | $ | 235 |   |

----

| ExhibitNumber |   | Description                                                                                                                                                                                  |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           |   | Certificate of Incorporation (1)                                                                                                                                                             |
|          |   |                                                                                                                                                                                         |
| 3.2           |   | Bylaws (1)                                                                                                                                                                                   |
|          |   |                                                                                                                                                                                         |
| 3.3           |   | Certificate of Amendment of the Certificate of Incorporation, filed August 19, 2008 with the Secretary of State of the State of Delaware (2)                                                 |
|          |   |                                                                                                                                                                                         |
| 3.4           |   | Certificate of Amendment of the Certificate of Incorporation, filed August 29, 2008 and effective September 5, 2008 with the Secretary of State of the State of Delaware (3)                 |
|          |   |                                                                                                                                                                                         |
| 3.5           |   | Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, filed September 10, 2008 with the Secretary of State of the State of Delaware (3) |
|          |   |                                                                                                                                                                                         |
| 3.6           |   | Amendment to Certificate of Incorporation, filed November 24, 2008 with the Secretary of State of Delaware (4)                                                                               |
|          |   |                                                                                                                                                                                         |
| 3.7           |   | Amendment to Bylaws (5)                                                                                                                                                                      |
|          |   |                                                                                                                                                                                         |
| 3.8           |   | Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed with the Delaware Secretary of State on June 12, 2009 (6)                   |
|          |   |                                                                                                                                                                                         |
| 10.1          |   | Second Amended and Restated Agreement to between the Registrant and Tommy Ross, dated March 14, 2011 (7)                                                                                     |
|          |   |                                                                                                                                                                                         |
| 10.2          |   | Amendment #1 to Share Exchange Agreement, dated March 31, 2011 (8)                                                                                                                           |
|          |   |                                                                                                                                                                                         |
| 31.1          |   | Section 302 Certification by the Corporation’s Principal Executive Officer *                                                                                                      |
|          |   |                                                                                                                                                                                         |
| 31.2          |   | Section 302 Certification by the Corporation’s Principal Financial and Accounting Officer *                                                                                       |
|          |   |                                                                                                                                                                                         |
| 32.1          |   | Section 906 Certification by the Corporation’s Principal Executive Officer *                                                                                                      |
|          |   |                                                                                                                                                                                         |
| 32.2          |   | Section 906 Certification by the Corporation’s Principal Financial and Accounting Officer *                                                                                       |

----

| *   | Filed herewith.                                                                                                              |
|-----|------------------------------------------------------------------------------------------------------------------------------|
| (1) | Filed on February 13, 2007 as an exhibit to our Registration Statement on Form SB-2/A, and incorporated herein by reference. |
| (2) | Filed on August 29, 2008 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.              |
| (3) | Filed on September 11, 2008 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.           |
| (4) | Filed on November 26, 2008 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.            |
| (5) | Filed on January 16, 2009 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.             |
| (6) | Filed on June 18, 2009 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.                |
| (7) | Filed on March 15, 2011 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.               |
| (8) | Filed on April 6, 2011 as an exhibit to our Current Report on Form 8-K, and incorporated herein by reference.                |

----

|               | PREMIER POWER RENEWABLE ENERGY, INC. |
|--------------------|--------------------------------------|
|               | (Registrant)                         |
|               |                                 |
| Date: May 16, 2011 | By:                             | /s/ Dean R. Marks |
|               |                                 | Dean R. Marks |
|               |                                 | Chief Executive Officer and President (Principal Executive Officer) |
|               |                                 |   |
|               |                                 |   |
| Date: May 16, 2011 | By:                                  | /s/ Frank J. Sansone |
|               |                                 | Frank J. Sansone |
|               |                                 | Chief Financial Officer (Principal Financial & Accounting Officer) |

----