UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-K


(Mark
One)





x ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended: December 31,
2008




o  TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
transition period from __________ to __________





Commission
file number: 333-140637





PREMIER POWER RENEWABLE
ENERGY, INC.


(Name of
small business issuer in its charter)





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





4961
Windplay Drive, Suite 100


El Dorado Hills, CA
95762


(Address
of principle executive offices)





(916)
939-0400


(Registrant’s
telephone number)





Securities
registered under Section 12(b) of the Exchange Act: None


Securities
registered under Section 12(g) of the Exchange Act: None





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.o Yes  x No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.o Yes  x No





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 requirement for
the past 90 days. x
Yes  o
No





Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act).





Large
      accelerated filer  o
            Accelerated
      filer  oNon-accelerated
      filer  o
            Smaller
      reporting company x





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter:  The registrant’s common stock had no active trading market
until after its most recently completed second fiscal quarter.





APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:




Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.  o
Yes  o
No





(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the last practicable date:  26,048,750 shares of common
stock as of March 30, 2009.





DOCUMENTS
INCORPORATED BY REFERENCE





None










TABLE
      OF CONTENTSPage No.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
      INFORMATION
            2PART
      IItem
      1. Business
            3Item
      1A. Risk Factors
            6Item
      2. Properties
            17Item
      3. Legal Proceedings
            18Item
      4. Submission of Matters to a Vote of Security Holders
            18PART
      IIItem
      5. Market for the Registrant’s Common Equity, Related Stockholder Matters
      and Issuer Purchases of Equity Securities
            19Item
      6. Selected Financial Data
            20Item
      7. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            20Item
      7A. Quantitative and Qualitative Disclosures About Market
    Risk
            24Item
      8. Financial Statements and Supplementary Data
            24Item
      9. Changes in and Disagreements With Accountants on Accounting
      and Financial Disclosure
            25Item
      9A. Controls and Procedures
            25Item
      9B. Other Information
            26PART
      IIIItem
      10. Directors, Executive Officers and Corporate Governance
            27Item
      11. Executive Compensation
            29Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters
            32Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
            33Item
      14. Principal Accounting Fees and Services
            33PART
      IVItem
      15. Exhibits, Financial Statement Schedules
            35SIGNATURES
            39










CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION





This
annual report on Form 10-K contains forward-looking statements.  Such
forward-looking statements include statements regarding, among other things, (a)
our projected sales and profitability, (b) our growth strategies, (c)
anticipated trends in our industry, (d) our future financing plans, and (e) our
anticipated needs for working capital.  Forward-looking statements
that involve assumptions and describe our future plans, strategies, and
expectations are generally identifiable by use of the words "may," "will,"
"should," "expect," "anticipate," "estimate," "believe," "intend," or "project"
or the negative of these words or other variations on these words or comparable
terminology.  This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements to be materially different from the future results, performance,
or achievements expressed or implied by any forward-looking
statements.  These statements may be found under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business," as well as in this annual report generally.  Actual events
or results may differ materially from those discussed in forward-looking
statements as a result of various factors, including, without limitation, the
risks outlined under "Risk Factors" and matters described in this annual report
generally.  This annual report may contain market data related to our
business that may have been included in articles published by independent
industry sources.  Although we believe these sources are reliable, we
have not independently verified this market data.  This market data
includes projections that are based on a number of assumptions.  If
any one or more of these assumptions turns out to be incorrect, actual results
may differ materially from the projections based on these
assumptions.  In light of these risks and uncertainties, there can be
no assurance that the forward-looking statements contained in this annual report
will in fact occur.  In addition to the information expressly required
to be included in this annual report, we will provide such further material
information, if any, as may be necessary to make the required statements, in
light of the circumstances under which they are made, not
misleading.




Each
forward-looking statement should be read in context with, and with an
understanding of, the various other disclosures concerning our company and our
business made elsewhere in this annual report as well as other public reports
that may be filed with the United States Securities and Exchange
Commission.  You should not place undue reliance on any
forward-looking statement as a prediction of actual results or
developments.  We are not obligated to update or revise any
forward-looking statement contained in this annual report to reflect new events
or circumstances, unless and to the extent required by applicable
law.  Neither the Private Securities Litigation Reform Act of 1995 nor
Section 27A of the Securities Act of 1933, as amended, provides any protection
for statements made in this annual report.





When used
in this annual report, the terms the "Company," "Premier Power," "we," "us,"
"our," and similar terms refer to Premier Power Renewable Energy, Inc., a
Delaware corporation, and our subsidiaries.





2





PART I





ITEM
      1.
            BUSINESS





Overview





We are a
developer, designer, and integrator of solar energy solutions for residential,
commercial, and industrial customers in North America and Spain through our
wholly owned subsidiary Premier Power Renewable Energy, Inc., a California
corporation (“Premier Power California”), and Premier Power California’s two
wholly owned subsidiaries, Bright Future Technologies, LLC, a Nevada limited
liability company (“Bright Future”) and Premier Power Sociedad Limitada, a
limited liability company formed in Spain (“Premier Power Spain”). We use solar
components from the industry’s leading suppliers and manufacturers such as
General Electric (“GE”), Sharp, Fronius, Wattsun, SMA, Satcon, Xantrex, Schuco
and SunPower Corporation. Our clients have included utility companies such as
Pacific Gas and Electric and Sierra Pacific Power Company, home builders such as
KB Homes, and numerous agricultural clients such as leading wineries in Napa
Valley, California.





Corporate
History





We were
originally incorporated as “Harry’s Trucking, Inc.” in Delaware on August 31,
2006 and had business operations as a third-party logistics provider for supply
chain management through a wholly owned subsidiary, “Harry’s Trucking, LLC,”
which was formed on April 2, 2004 as a limited liability company in California.
In connection with the closing of the share exchange transaction discussed more
fully below, we sold 100% of our interest in Harry’s Trucking, LLC to Haris
Tajyar and Omar Tajyar. Effective September 5, 2008, we changed our name to
“Premier Power Renewable Energy, Inc.” On September 9, 2008, we consummated a
share exchange transaction discussed more fully below, and, as a result, we now
operate through our subsidiaries as a developer, designer, and integrator of
solar energy solutions.





Share
Exchange





On
September 9, 2008 (the “Closing Date”), we closed a share exchange transaction
(the “Closing”) under a Share Exchange Agreement (the “Exchange Agreement”)
entered into by and among the Company, our majority stockholder, Premier Power
California, and the stockholders of Premier Power California, consisting of four
individuals and one entity, who, immediately prior to the Closing, collectively
held 100% of Premier Power California’s issued and outstanding share capital
(the “PPG Owners”). Hereinafter, this share exchange transaction is described as
the “Share Exchange.” We completed the acquisition of all of the equity
interests of Premier Power California held by the PPG Owners through the
issuance of 24,218,750 shares of our common stock, par value $0.0001 per share
(“Common Stock”) to the PPG Owners. Immediately prior to the Exchange Agreement
transaction and taking into account the cancellation of 25,448,000 shares of our
common stock held by Vision Opportunity Master Fund, Ltd. (“Vision”) concurrent
with the Closing, we had 1,800,000 shares of common stock issued and
outstanding. Immediately after the issuance of the shares to the PPG Owners, we
had 26,018,750 shares of common stock issued and outstanding.





As a
result of the Share Exchange, the PPG Owners became our controlling
stockholders, and Premier Power California became our wholly owned subsidiary.
In connection with Premier Power California becoming our wholly owned
subsidiary, we acquired the business and operations of Premier Power California,
and Premier Power California’s wholly owned subsidiaries, Bright Future and
Premier Power Spain, became our indirect wholly owned subsidiaries.





Principal
Products and Services





Premier
Power California’s main business is the installation of solar energy systems and
all related components for use by residential homeowners, commercial and
industrial enterprises, municipalities, and other solar energy
providers.





We also
provide after-market maintenance services for solar energy systems such as
cleaning, and we design the manner in which solar energy systems are
installed.  About 5% of the racking and installation systems for the
solar energy systems we install are manufactured by the Company, and about 95%
are manufactured by our solar module suppliers.





In
addition, we are a reseller of solar energy system components including, but not
limited to, racking, wiring, inverters, solar modules, and other related
components sourced from the industry’s leading manufactures and suppliers. We
have also offered direct power purchase agreement programs through our
relationships with Samsung and GE.





Market
and Industry Overview





According
to the Energy Information Administration (“EIA”), a section of the United States
Department of Energy, energy markets are seeing dramatic use demands and price
increases. In fact the EIA’s outlook in 2008 was that global energy consumption
would increase by 50% from 2005 to 2030. Electric power used to operate
businesses and industries provides the power needed for homes and offices and
provides the power for our communications, entertainment, transportation, and
medical needs. On the residential side, growth in population and homeowners’ desires to
utilize solar as an alternative source of energy have increased demand over
time. Population shifts to warmer regions have also increased the need for
cooling. Electricity is now more commonly used for local transportation
(electric vehicles) and space/water heating needs.




3




Due to
continuously increasing energy demands, we believe the electric power industry
faces the following challenges:




·
              Limited Fossil Fuel Supplies
      and Cost Pressures. Supplies of fossil fuels that are used to
      generate electricity such as oil, coal and natural gas are limited, and
      yet worldwide demand for electricity continues to increase. The increasing
      demand for electricity and a finite supply of fossil fuels may result in
      increased fossil fuel prices, which, in turn, will likely result in a
      continuation of increases in long-term average costs for
      electricity.
 
 ·
              Stability of Suppliers.
      Many of the world’s leading suppliers of fossil fuels are located in
      unstable regions of the world where political instability, labor unrest,
      war and terrorist threats may disrupt oil and natural gas production.
      Purchasing oil and natural gas from these countries may increase the risk
      of supply shortages and may increase costs of fossil
  fuels.
 
 ·
              Generation, Transmission and
      Distribution Infrastructure Costs. Historically, electricity has
      been generated in centralized power plants transmitted over high voltage
      lines and distributed locally through lower voltage transmission lines and
      transformer equipment. Despite the increasing demand for electricity,
      investment in electricity generation, transmission and distribution
      infrastructure have not kept pace, resulting in service disruptions in the
      U.S. As electricity demands increase, these systems will need to be
      expanded, and such expansion will be capital intensive and time consuming,
      and may be restricted by environmental concerns. Without further
      investments in this infrastructure, the likelihood of power shortages may
      increase.
 
 ·
              Environmental Concerns and
      Climate Change. Concerns about climate change and greenhouse gas
      emissions have resulted in the Kyoto Protocol. 137 countries have
      voluntarily ratified the Kyoto Protocol and are required to reduce
      greenhouse gas emissions to target levels. The U.S. has the Renewable
      Portfolio Standard, which requires the purchase of a certain amount of
      power from renewable sources.




The
demand for viable alternate sources of fuel for electric power generation in
order to address the increasing demand for electricity coupled with government
regulations and incentive programs in countries such as Germany, Japan, Spain,
and the U.S. that encourage more rapid development of, and the adoption by
businesses and individuals of, solar energy power systems have accelerated the
growth of the solar energy industry.





We
believe that solar energy is one of the most direct and unlimited alternate
energy sources. Our beliefs have been supported by various studies, including a
study titled "Review of Solutions to Global Warming, Air Pollution, and Energy
Security" by Mark Z. Jacobson, a professor of civil and environment engineering
at Stanford University, published in “Energy & Environment Science,” that
found solar energy to be a top alternative energy solution. Solar energy is the
underlying energy source for renewable fuel sources, including biomass fuels and
hydroelectric energy. By extracting energy directly from the sun and converting
it into an immediately usable form, either as heat or electricity, intermediate
steps normally involved in converting fuel to electric power are eliminated.
Solar energy can be converted into usable forms of energy either through the
photovoltaic effect (generating electricity from photons) or by generating heat
(solar thermal energy). Solar thermal systems include traditional domestic hot
water collectors (“DHW”), swimming pool collectors, and high temperature thermal
collectors (used to generate electricity in central generating systems). DHW
thermal systems are typically distributed on rooftops to generate heat for the
building on which they are situated. High temperature thermal collectors
typically use concentrating mirror systems and are located in remote
sites.





The
Utility Solar Assessment (USA) Study, produced by clean-tech research and
publishing firm Clean Edge and green-economy nonprofit Co-op America, provides a
comprehensive roadmap for utilities, solar companies, and regulators to enable
solar to reach 10% of all U.S. electricity generation by 2025.  The
USA Study found that solar power offers a variety of advantages over other
sources of power, including an absence of the need for fossil fuel,
environmental cleanliness, location-based energy production, greater efficiency
during peak demand periods, high reliability, and modularity:




·
              Clean Energy
      Production.   Unlike traditional fossil fuel energy
      sources and many other renewable energy sources, solar power systems
      generate electricity with no emissions or noise
  impact.
 
 ·
              Location-Based Energy
      Production.  Solar power is a distributed energy source,
      meaning the electricity can be generated at the site of consumption. This
      provides a significant advantage to the end user who is therefore not
      reliant upon the traditional electricity infrastructure for delivery of
      electricity to the site of use.
 
 ·
              Energy Generated to Match Peak
      Usage Times.  Peak energy usage and high electricity
      costs typically occur mid-day, which also generally corresponds to peak
      sunlight hours and solar power electricity
  generation.
 
 ·
              Reliable Source of
      Electricity.Solar power systems generally do not contain moving
      parts, nor do they require significant ongoing maintenance. As a result,
      we believe solar power systems are one of the most reliable forms of
      electricity generation.
 
 ·
              Modular.Solar power
      systems are made from interconnecting and laminating solar cells into
      solar modules. Given this method of construction, solar power products can
      be deployed in many different sizes and configurations to meet specific
      customer needs.




4




Competition





Major
Domestic Competitors





Premier
Power California is active in the North American and international markets and
has a very limited number of direct competitors that are concurrently active in
both of those markets. SunPower Corporation is one such competitor. Further, in
the U.S., the solar design and integration market is highly fragmented, and we
face direct competition in these markets from a number of smaller local
installers within many U.S. cities. In certain U.S. cities and regions such as
Los Angeles, the San Francisco Bay Area, and California’s Central Valley,
Premier Power California experiences intermittent competition from regional
installers such as Borrego Solar, Akeena Solar, SPG, and Solar City. Based on
Premier Power California’s geographic diversification, buying power and unique
installation methods, the effects of any one installer on Premier Power
California are limited but growing. In particular, among the commercial grade
opportunities, there are only a few companies with the level of experience
Premier Power California possesses. Only a few competitors qualify under larger
scale “Request for Proposal” (“RFP”) projects, and therefore the pool of
competitors on many mid-size commercial installations is limited. There are a
greater number of competitors in the small business and residential markets.
Premier Power California seeks to distinguish itself from the competition by
marketing its depth of experience, complex engineering and design capabilities,
customer satisfaction and its “on-time” and “on-budget”
installations.





Major
Spanish Competitors





In the
Spanish market, Premier Power Spain faces competition from Acciona and Tudela
Solar, among other companies. However, most of the competition in Spain results
from companies being accustomed to building large-scale solar farms, which have
proliferated commensurate with the national feed-in tariffs. Premier Power
Spain’s business is unique because it is not dependent on the large-scale solar
farm subsidies or feeding tariffs, and sets itself apart from the large scale
solar farm developers. Large-scale farm developers are experienced at
engineering ground mount systems in abundant and open space and replicating
redundant tasks related to a large-scale installation. Premier Power Spain is
focused on the smaller commercial roof top installation, which has greater
design and installation challenges, and has developed and secured exclusivity on
various components of its ballast mount roof system that reduces the cost and
time to complete installations.





Principal
Suppliers





The
components used in our solar energy systems consist of solar modules, inverters,
racking, wire, hardware, monitoring equipment, and electrical equipment. Premier
Power California and Premier Power Spain purchases these components from leading
solar energy product suppliers including Sharp, SunPower Corporation, GE, Schüco
USA, L.P. (“Schüco”), Kyocera, Fronius, SMA, and Watsun. In particular, Sharp,
SunPower Corporation, and GE account for over 80% of our purchases of solar
panels.





Premier
Power California constantly evaluates the outlook for supply of solar panels and
other components. However, we currently do not maintain any long-term supply
agreements for the purchase of these components, and thus we may be subject to
the availability of and/or market price fluctuations for the components used in
our solar energy systems.





Customers




In 2008,
our largest customers were Solar Power Partners, which represented 18% of our
total sales, and Sutter Home and Otis, each representing 12% of our total
sales.    For the year ended December 31, 2008, 84% of our
revenue was derived from sales to commercial and industrial customers, and 16%
of our revenue was derived from sales to residential customers.  One
customer accounted for 16% of the Company’s revenues in 2007.  For the
fiscal year ended December 31, 2007, 57% of our revenue was derived from sales
to commercial and industrial customers and 43% of our revenue was derived from
sales to residential customers.





In
addition to our residential customers, our commercial and industrial customers
have included PG&E, Sierra Pacific Power Company, AT&T, Princeton
University, Millennium Sports Club, KB Homes, and General Electric. Our
agricultural customers have included Shafer Vineyards, Silverado Vineyards,
Chateau Montelena, St. Supery, Spottswoode, Larkmead Vineyards, Madroña
Vineyards, Redwood Ranch & Vineyards, Nicol Vineyards, L’Aventure Vineyards,
Saxum Vineyards, Sierra Vista Vineyards, Domain de la Terre Rouge (Easton)
Vineyards, Chateau Chapellet, and KT Winco.





Intellectual
Properties and Licenses





Premier
Power California has applied with the U.S. Patent and Trademark Office for
trademark protection for the brand names “Premier Power” and “Bright Futures”
and its sales slogan, “Your Solar Electricity
Specialist.”  Applications for these trademarks are currently
pending.


Government
Approval and Regulation
 
 All
products resold by Premier Power California are guaranteed by the manufacturer
to have passed all required government approval and regulation
requirements.  Some of the electrical services provided by Premier
Power California are regulated and require licensing.  The
installations of electrical components that are connected to the electric meter
require a C10 license in California and C2 license in Nevada.  The
installation of solar systems in California requires a C46
license.  As we expand our installations operation into other states,
we may need to obtain additional licenses required by the local building
authorities.  Some states accept a C10 license from
California.  Premier Power California possesses and maintains all the
necessary licenses required for the services it provides.  Premier
Power California employees hold some of the highest levels of licensing and
certifications available in the industry, and some employees are certified by
the North America Board of Certified Energy Practitioners (NABCEP).
 
 Compliance
with Environmental Laws
 
 Premier Power California is not
required to comply with any environmental laws that are particular to the solar
industry. However, it is our policy to be as environmentally conscientious in
every aspect of our operations.


Research
and Development





Premier
Power California employs best practices in its design and installation of
systems. Dean R. Marks, our President and Chief Executive Officer, first become
a member of the California Solar Energy Industry Association (CALSEIA) in 1984,
and his experience has been key in the development of many innovative solar
solutions. Premier Power California leveraged its research and development
capability to help GE develop its popular solar tile. Any technology and/or
procedures that are developed are based on the decades of experience in solar
installations held by the persons behind the development and in-house expertise
in electrical and structural engineering. Premier Power California’s lead
engineer, Ken Baker, has been an electric engineer for over 30 years, including
10 years of experience in renewable energy. The research and development team at
Premier Power California constantly looks for new and innovative ways to address
space constraints, time and cost saving designs that will increase efficiencies
and drive added revenue.




Employees
 
 As of
March 31, 2009, we had approximately 85 employees, all of which are full-time
employees.
 
 Principal
Executive Offices
 
 Our
principal executive office is located at 4961 Windplay Drive, Suite 100, El
Dorado Hills, California 95762, and our telephone number is (916)
939-0400.




5




ITEM
      1A.
            RISK
      FACTORS





The
statements contained in or incorporated into this report that are not historic
facts are forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth in or
implied by forward-looking statements.  If any of the following risks
actually occurs, our business, financial condition, or results of operations
could be harmed.





Risks
Relating to Our Business





We
have a short operating history as a public company, and the limited operating
history of some of our subsidiaries makes it difficult to evaluate our future
prospects and results of operations.





Our
current management has limited experience in operating a public company, and we
may need to hire additional management personnel and outside assistance from
legal, accounting and other professionals to assist us with complying with
additional SEC reporting requirements and compliance under the Sarbanes-Oxley
Act of 2002 not previously required of us as a private company prior to the
Share Exchange that could be more costly than planned.  Further, the
limited operating history of Bright Future and Premier Power Spain makes it
difficult to evaluate our business. In the event that we are not able to manage
our growth and operate as a public company due to our limited experience, our
business may suffer uncertainty and failures, which makes it difficult to
evaluate our business.





We are dependent upon our suppliers
for the components used in the systems we design and install, and our major
suppliers are dependent upon the continued availability and pricing of
polysilicon and other raw materials used in solar panels. Any increases in the price of
solar components or any interruptions to or shortage or decline in the quality
of the solar components we purchase for our solar energy systems could adversely
affect our business.





Key
components used in our systems are purchased from a limited number of
manufacturers. In particular, Sharp, SunPower Corporation, and General Electric
account for over 80% of our purchases of solar panels. We are subject to market
prices for the components that we purchase for our installations, which are
subject to fluctuation. We cannot ensure that the prices charged by our
suppliers will not increase because of changes in market conditions or other
factors beyond our control. An increase in the price of components used in our
systems could result in an increase in costs to our customers and could have a
material adverse effect on our revenues and demand for our products and
services. Our suppliers are dependent upon the availability and pricing of
polysilicon, one of the main materials used in manufacturing solar panels. The
world market for solar panels recently experienced a shortage of supply due to
insufficient availability of silicon and limited manufacturing capacity. This
shortage caused the prices for solar panels to increase. Interruptions in our
ability to procure needed components for our systems, whether due to
discontinuance by our suppliers, delays or failures in delivery, shortages
caused by inadequate production capacity or unavailability, or for other
reasons, would adversely affect or limit our sales and growth. In addition,
increases in the prices of solar panels could make systems that have been sold
but not yet installed unprofitable for us. There is no assurance that we will
continue to find qualified manufacturers on acceptable terms and, if we do,
there can be no assurance that product quality will continue to be acceptable,
which could lead to a loss of sales and revenues.





Various
licenses and permits are required to operate our business, and the loss of or
failure to renew any or all of these licenses and permits could prevent us from
either completing current projects or obtaining future projects, and, thus,
materially adversely affect our business.





We hold
electrical contractor licenses in all states in which we operate, including C10,
C2, and C46. Also, we are certified by the North America Board of Certified
Energy Practitioners (NABCEP). The loss of any such licenses or certifications,
or the loss of any key personnel who hold such licenses or certifications, would
materially adversely affect our business because it could prevent us from
obtaining and/or completing solar integration projects in states where we or our
personnel lose such licenses or certifications or are in non-compliance with
state licensing or certification requirements.




6




We
are highly dependent on senior management and key sales and technical
personnel.  The loss and inability to replace any such persons could
have a material adverse effect on our business and operations.





We are
highly dependent on our senior management to manage our business and operations
and our key managerial, financial, sales, design, engineering, technical and
other personnel for the sale, development and installation of our solar power
systems. In particular, we rely substantially on Dean R. Marks, our President
and Chief Executive Officer, and Miguel de Anquin, our Chief Operating Officer,
and Corporate Secretary, to manage our operations. Although we have entered into
employment agreements with and obtained key-man life insurance policies for our
benefit on the lives of Messrs. Marks and de Anquin, we cannot assure their
continued services to the Company. The loss of either one of them, or any other
member of our senior management, would have a material adverse effect on our
business and operations. Competition for senior management and sales and
technical personnel is intense, and the pool of suitable candidates is limited.
We may be unable to locate a suitable replacement for any member of our senior
management or key sales and technical personnel that we lose. In addition, if
any member of our senior management or key sales and technical personnel joins a
competitor or forms a competing company, they may compete with us for customers,
business partners and other key professionals and staff members of our company.

Although each of our senior management and key sales and technical personnel has
signed a confidentiality and non-competition agreement in connection with his
employment with us, we cannot provide assurances that we will be able to
successfully enforce these provisions in the event of a dispute between us and
any member of our senior management or key research and development
personnel.





If we are unable to attract, train,
and retain highly qualified personnel, the quality of our services may
decline, and we may not meet our business and financial
goals.





We
compete for qualified personnel with other solar integration companies. Intense
competition for these personnel could cause our compensation costs to increase
significantly, which, in turn, could have a material adverse effect on our
results of operations. Our future success and ability to grow our business will
depend in part on the continued service of these individuals and our ability to
identify, hire and retain additional qualified personnel. If we are unable to
attract and retain qualified employees, we may be unable to meet our business
and financial goals, which will require the retention of these qualified
employees to work on our future solar integration projects as we expand our
business.





Our
growth strategy may prove to be disruptive and divert management
resources.





Our
growth strategy may involve large transactions and present financial, managerial
and operational challenges, including diversion of management attention from our
existing businesses, difficulty with integrating personnel and financial and
other systems, increased expenses, including compensation expenses resulting
from newly hired employees, the assumption of unknown liabilities and potential
disputes. We could also experience financial or other setbacks if any of our
growth strategies incur problems of which we are not presently aware. We may
also require additional financing in the future in connection with our growth
strategy.





We
may need to obtain additional debt or equity financing to fund future capital
expenditures and to meet working capital requirements, which may be obtained on
terms that are unfavorable to the Company and/or our stockholders.





Additional
equity may result in dilution to the holders of our outstanding shares of
capital stock. Additional debt financing may include conditions that would
restrict our freedom to operate our business, such as conditions
that:





·
              limit
      our ability to pay dividends or require us to seek consent for the payment
      of dividends;





·
              increase
      our vulnerability to general adverse economic and industry
      conditions;





·
              require
      us to dedicate a portion of our cash flow from operations to payments on
      our debt, thereby reducing the availability of our cash flow to fund
      capital expenditures, working capital and other general corporate
      purposes; and





·
              limit
      our flexibility in planning for, or reacting to, changes in our business
      and our industry.





We cannot
guarantee that we will be able to obtain any additional financing on terms that
are acceptable to us, or at all.





Geographical business expansion
efforts we make could result in difficulties in successfully managing
our business and consequently harm our financial
condition.





As part
of our business strategy, we may seek to expand by acquiring competing
businesses or customer contracts outside of our current geographic markets, or
we may open offices in the geographical markets we desire to operate within. We
may face challenges in managing expanding product and service offerings and in
integrating acquired businesses with our own. We cannot accurately predict the
timing, size and success of our expansion efforts and the associated capital
commitments that might be required. We expect to face competition for expansion
candidates, which may limit the number of expansion opportunities available to
us and may lead to higher expansion costs. There can be no assurance that we
will be able to identify, acquire or profitably manage additional businesses and
contracts or successfully integrate acquired businesses and contracts, if any,
into our company, without substantial costs, delays or other operational or
financial difficulties. In addition, expansion efforts involve a number of other
risks, including:




7




·
              failure
      of the expansion efforts to achieve expected
  results;





·
              diversion
      of management’s attention and resources to expansion
    efforts;





·
              failure
      to retain key customers or personnel of the acquired businesses;
      and





·
              risks
      associated with unanticipated events, liabilities or
      contingencies.





Client
dissatisfaction or performance problems at a single acquired business could
negatively affect our reputation. The inability to acquire businesses on
reasonable terms or successfully integrate and manage acquired companies, or the
occurrence of performance problems at acquired companies, could result in
dilution to our stockholders, unfavorable accounting charges and difficulties in
successfully managing our business.





Our inability to obtain capital, use
internally generated cash, or use shares of our common stock or debt to
finance future expansion efforts could impair the growth and expansion of
our business.





Reliance
on internally generated cash or debt to finance our operations or to complete
business expansion efforts could substantially limit our operational and
financial flexibility. The extent to which we will be able or willing to use
shares of common stock to consummate expansions will depend on our market value
from time to time and the willingness of potential sellers to accept it as full
or partial payment. Using shares of common stock for this purpose also may
result in significant dilution to our then existing stockholders. To the extent
that we are unable to use common stock to make future expansions, our ability to
grow through expansions may be limited by the extent to which we are able to
raise capital for this purpose through debt or equity financings. No assurance
can be given that we will be able to obtain the necessary capital to finance a
successful expansion program or our other cash needs. If we are unable to obtain
additional capital on acceptable terms, we may be required to reduce the scope
of any expansion. In addition to requiring funding for expansions, we may need
additional funds to implement our internal growth and operating strategies or to
finance other aspects of our operations. Our failure to (i) obtain additional
capital on acceptable terms, (ii) use internally generated cash or debt to
complete expansions because it significantly limits our operational or financial
flexibility, or (iii) use shares of common stock to make future expansions may
hinder our ability to actively pursue any expansion program we may decide to
implement and negatively impact our stock price.





Our obligations under our credit
facility are secured by our assets. Thus, if the lender
forecloses on its security interest, we may have to liquidate some or all of our assets,
which may cause us to curtail or cease operations.





Our
obligations under our current loan and security agreement with Guaranty Bank are
secured by all of Premier Power California’s assets. If we
default under the credit facility, we could be required to repay all of our
borrowings thereunder. In addition, Guaranty Bank could foreclose its security
interest and liquidate some or all of our assets, which could cause us to
curtail or cease operations.  As of March 31, 2009, there were no
amounts outstanding under our agreement with Guaranty Bank.





We are subject to restrictive
covenants in connection with our credit facility that may limit our ability
to borrow additional funds or to raise additional equity as may be required
to fund our future operations.





The terms
of the current credit facility with Guaranty Bank may limit our ability, without
Guaranty Bank’s consent, to, among other things, enter into certain transactions
(such as an acquisition of another company) and create additional liens on our
assets, and could adversely affect our liquidity and our ability to attract
additional funding if required for our business.





Our
operations are cash intensive, and our business could be adversely affected if
we fail to maintain sufficient levels of working capital.





We expend
a significant amount of cash in our operations, principally to fund our
materials procurement. Our suppliers typically provide us with credit. In turn,
we typically require our customers to make payment at various stages of the
project. We generally fund most of our working capital requirements out of cash
flow generated from operations and our line of credit. If we fail to generate
sufficient revenues from our sales, or if we experience difficulties collecting
our accounts receivables, we may not have sufficient cash flow to fund our
operating costs, and our business could be adversely affected.





Our
operating results may fluctuate from period to period, and if we fail to meet
market expectations for a particular period, our stock price may
decline.





Our
operating results have fluctuated from period to period and are likely to
continue to fluctuate as a result of a wide range of factors, including sales
demands, electricity rate changes, changes in incentives and technological
improvements. Our production and sales are generally lower in the winter due to
weather conditions and holiday activities. Interim reports may not be indicative
of our performance for the year or our future performance, and period-to-period
comparisons may not be meaningful due to a number of reasons beyond our control.
We cannot provide assurances that our operating results will meet the
expectations of market analysts or our investors. If we fail to meet their
expectations, there may be a decline in our stock price.




8




Because the solar integration
industry is highly competitive and has low barriers to entry, we may lose market share to larger
companies that are better equipped to weather deterioration in market
conditions due to increased competition.





Our
industry is highly competitive and fragmented, is subject to rapid change and
has low barriers to entry. We may in the future compete for potential customers
with solar system installers and servicers, electricians, roofers, utilities and
other providers of solar power equipment or electric power. Some of these
competitors may have significantly greater financial, technical and marketing
resources and greater name recognition than we have. We believe that our ability
to compete depends in part on a number of factors outside of our control,
including:





·
              the
      ability of our competitors to hire, retain and motivate qualified
      technical personnel;





·
              the
      ownership by competitors of proprietary tools to customize systems to the
      needs of a particular
customer;





·
              the
      price at which others offer comparable services and
    equipment;





·
              the
      extent of our competitors’ responsiveness to client
  needs;





·
              risk
      of local economy decline; and





·
              installation
      technology.





Competition
in the solar power services industry may increase in the future, partly due to
low barriers to entry, as well as from other alternative energy resources now in
existence or developed in the future. Increased competition could result in
price reductions, reduced margins or loss of market share and greater
competition for qualified technical personnel. There can be no assurance that we
will be able to compete successfully against current and future competitors. If
we are unable to compete effectively, or if competition results in a
deterioration of market conditions, our business and results of operations would
be adversely affected.





We
act as the general contractor for our customers in connection with the
installation of our solar power systems and are subject to risks associated with
construction, bonding, cost overruns, delays, and other contingencies, which
could have a material adverse effect on our business and results of
operations.





We act as
the general contractor for our customers in connection with the installation of
our solar power systems. All essential costs are estimated at the time of
entering into the sales contract for a particular project, and these are
reflected in the overall price that we charge our customers for the project.
These cost estimates are preliminary and may or may not be covered by contracts
between us or the other project developers, subcontractors, suppliers and other
parties to the project. In addition, we require qualified, licensed
subcontractors to install some of our systems. Shortages of such skilled labor
could significantly delay a project or otherwise increase our costs. Should
miscalculations in planning a project or defective or late execution occur, we
may not achieve our expected margins or cover our costs. Also, many systems
customers require performance bonds issued by a bonding agency. Due to the
general performance risk inherent in construction activities, it is sometimes
difficult to secure suitable bonding agencies willing to provide performance
bonding. In the event we are unable to obtain bonding, we will be unable to bid
on, or enter into, sales contracts requiring such bonding. Delays in solar panel
or other supply shipments, other construction delays, unexpected performance
problems in electricity generation or other events could cause us to fail to
meet these performance criteria, resulting in unanticipated and severe revenue
and earnings losses and financial penalties. Construction delays are often
caused by inclement weather, failure to timely receive necessary approvals and
permits, or delays in obtaining necessary solar panels, inverters or other
materials. The occurrence of any of these events could have a material adverse
effect on our business and results of operations.





We
generally recognize revenue on system installations on a “percentage of
completion” basis and payments are due upon the achievement of contractual
milestones, and any delay or cancellation of a project could adversely affect
our business.





We
recognize revenue on our system installations on a “percentage of completion”
basis and, as a result, our revenue from these installations is driven by the
performance of our contractual obligations, which is generally driven by
timelines for the installation of our solar power systems at customer sites.
This could result in unpredictability of revenue and, in the short term, a
revenue decrease. As with any project-related business, there is the potential
for delays within any particular customer project. Variation of project
timelines and estimates may impact the amount of revenue recognized in a
particular period. In addition, certain customer contracts may include payment
milestones due at specified points during a project. Because we must invest
substantial time and incur significant expense in advance of achieving
milestones and the receipt of payment, failure to achieve milestones could
adversely affect our business and cash flows.





We
are subject to particularly lengthy sales cycles with our commercial and
government customers, which may adversely affect our sales and marketing
efforts.





Factors
specific to certain of our customers’ industries have an impact on our sales
cycles. Our commercial and government customers may have longer sales cycles due
to the timing of various state and federal requirements. These lengthy and
challenging sales cycles may mean that it could take longer before our sales and
marketing efforts result in revenue, if at all, and may have adverse effects on
our operating results, financial condition, cash flows, and stock
price.




9




Our failure to meet a customer’s
expectations in the performance of our services, and the risks and
liabilities associated with placing our employees and technicians in our customers’
homes and businesses, could give rise to claims against
us.





Our
engagements involve projects that are critical to our customers’ business or
home. Our failure or inability to meet a customer’s expectations in the
provision of our products and services could damage or result in a material
adverse change to their premises or property, and therefore could give rise to
claims against us or damage our reputation. In addition, we are exposed to
various risks and liabilities associated with placing our employees and
technicians in the homes and workplaces of others, including possible claims of
errors and omissions, harassment, theft of client property, criminal activity
and other claims.





We
generally do not have long-term agreements with our solar integration customers
and, accordingly, could lose customers without warning.





Our
products are generally not sold pursuant to long-term agreements with solar
integration customers, but instead are sold on a purchase order basis. We
typically contract to perform large projects with no assurance of repeat
business from the same customers in the future. Although cancellations on our
purchase orders to date have been insignificant, our customers may cancel or
reschedule purchase orders with us on relatively short notice. Cancellations or
rescheduling of customer orders could result in the delay or loss of anticipated
sales without allowing us sufficient time to reduce, or delay the incurrence of,
our corresponding inventory and operating expenses. In addition, changes in
forecasts or the timing of orders from these or other customers expose us to the
risks of inventory shortages or excess inventory. This, in addition to the
non-repetition of large systems projects and our failure to obtain new large
system projects due to current economic conditions and reduced corporate and
individual spending, could cause our revenues to decline, and, in turn, our
operating results to suffer.





Our profitability depends, in part,
on our success in brand recognition, and we could lose our competitive
advantage if we are unable to protect our trademark against infringement. Any
related litigation could be time-consuming and
costly.





We
believe our brand has gained substantial recognition by customers in certain
geographic areas. We have applied for trademark protection for the brand names
“Premier Power” and “Bright Futures” and our sales slogan “Your Solar
Electricity Specialist.” Use of our name or a similar name by competitors in
geographic areas in which we have not yet operated could adversely affect our
ability to use or gain protection for our brand in those markets, which could
weaken our brand and harm our business and competitive position. In addition,
any litigation relating to protecting our trademark against infringement is
likely to be time consuming and costly.





Our
Premier Ballasting and Premier Racking systems are untested and may not be
effective or patentable or may encounter other unexpected problems, which could
adversely affect our business and results of operations.





Our
Premier Ballasting and Premier Racking systems are new and have not been tested
in installation settings for a sufficient period of time to prove their
long-term effectiveness and benefits. These systems may not be effective or
other problems may occur that are unexpected and could have a material adverse
effect on our business or results of operations. While we anticipate filing
patent applications for our Premier Ballasting and Premier Racking systems
technology, patents may not be issued on such technology, or we may not be able
to realize the benefits from any patents that are issued.





We
may face intellectual property infringement claims that could be time-consuming
and costly to defend and could result in our loss of significant rights and the
assessment of damages.





If we
receive notice of claims of infringement, misappropriation or misuse of other
parties’ proprietary rights, some of these claims could lead to litigation. We
cannot provide assurances that we will prevail in these actions, or that other
actions alleging misappropriation or misuse by us of third-party trade secrets,
infringement by us of third-party patents and trademarks or the validity of our
patent or trademarks, will not be asserted or prosecuted against us. We may also
initiate claims to defend our intellectual property rights. Intellectual
property litigation, regardless of outcome, is expensive and time-consuming,
could divert management’s attention from our business and have a material
negative effect on our business, operating results or financial condition. If
there is a successful claim of infringement against us, we may be required to
pay substantial damages (including treble damages if we were to be found to have
willfully infringed a third party’s patent) to the party claiming infringement,
develop non-infringing technology, stop selling our products or using technology
that contains the allegedly infringing intellectual property or enter into
royalty or license agreements that may not be available on acceptable or
commercially practical terms, if at all. Our failure to develop non-infringing
technologies or license the proprietary rights on a timely basis could harm our
business. Parties making infringement claims on any future issued patents may be
able to obtain an injunction that would prevent us from selling our products or
using technology that contains the allegedly infringing intellectual property,
which could harm our business.





Product
liability claims against us could result in adverse publicity and potentially
significant monetary damages.





As a
seller of consumer products, we face an inherent risk of exposure to product
liability claims in the event that our solar energy systems’ use results in
damages, injuries or fatalities. Since solar energy systems are electricity
producing devices, it is possible that our products could result in damage,
injury or fatality, whether by product malfunctions, defects, improper
installation or other causes. If such damages, injuries or fatalities or claims
were to occur, we could incur monetary damages, and our business could be
adversely affected by any resulting negative publicity. The successful assertion
of product liability claims against us also could result in potentially
significant monetary damages and, if our insurance protection is inadequate to
cover these claims, could require us to make significant payments from our own
resources.




10




We
do not carry business interruption insurance, and any unexpected business
interruptions could adversely affect our business.





Our
operations are vulnerable to interruption by earthquake, fire, power failure and
power shortages, hardware and software failure, floods, computer viruses and
other events beyond our control. In addition, we do not carry business
interruption insurance to compensate us for losses that may occur as a result of
these kinds of events, and any such losses or damages incurred by us could
disrupt our solar integration projects and other Company operations without
reimbursement.





A
decrease in the availability of credit or an increase in interest rates could
make it difficult for customers to finance the cost of solar energy systems and
could reduce demand for our services and products.





Some of
our prospective customers may depend on debt financing, such as home equity
loans, to fund the initial capital expenditure required to purchase a solar
energy system. Third-party financing sources, specifically for solar energy
systems, are currently limited, especially due to recent domestic and worldwide
economic troubles. The lack of financing sources, a decrease in the availability
of credit or an increase in interest rates could make it difficult or more
costly for our potential customers to secure the financing necessary to purchase
a solar energy system on favorable terms, or at all, thus lowering demand for
our products and services and negatively impacting our business.





A
portion of our revenues is generated by construction contracts, and, thus, a
decrease in construction could reduce our construction contract-related sales
and, in turn, adversely affect our revenues.





Some of
our solar-related revenues were generated from the design and installation of
solar power products in newly constructed and renovated buildings, plants and
residences. Our ability to generate revenues from construction contracts will
depend on the number of new construction starts and renovations, which should
correlate with the cyclical nature of the construction industry and be affected
by general and local economic conditions, changes in interest rates, lending
standards and other factors. For example, the current housing slump and
tightened credit markets have resulted in reduced new home construction, which
could limit our ability to sell solar products to residential and commercial
developers.





We
derive most of our revenue from sales in a limited number of territories, and we
will be unable to further expand our business if we are unsuccessful in adding
additional geographic sales territories to our operations.





We
currently derive most of our revenue from sales of our solar integration
services in California and Spain. This geographic concentration exposes us to
growth rates, economic conditions, and other factors that may be specific to
those territories to which we would be less subject if we were more
geographically diversified. The growth of our business will require us to expand
our operations and commence operations in other states, countries, and
territories. Any geographic expansion efforts that we undertake may not be
successful, which, in turn, would limit our growth opportunities.





We
face risks associated with international trade and currency exchange that could
have a material impact on our profitability.





We
transact business in the U.S. dollar and the Euro. Changes in exchange rates
would affect the value of deposits of currencies we hold. We do not currently
hedge against exposure to currencies. We cannot predict with certainty future
exchange rates and their impact on our operating results. Movements in the
exchange rate between the U.S. dollar and the Euro could have a material impact
on our profitability.





Our
success may depend in part on our ability to make successful
acquisitions.





As part
of our business strategy, we plan to expand our operations through strategic
acquisitions in our current markets and in new geographic markets. We cannot
accurately predict the timing, size, and success of our acquisition efforts. Our
acquisition strategy involves significant risks, including the
following:





·
              our
      ability to identify suitable acquisition candidates at acceptable
      prices;





·
              our
      ability to successfully complete acquisitions of identified
      candidates;





·
              our
      ability to compete effectively for available acquisition
      opportunities;





·
              increases
      in asking prices by acquisition candidates to levels beyond our financial
      capability or to levels that would not result in the returns required by
      our acquisition criteria;





·
              diversion
      of management’s attention to expansion
efforts;





·
              unanticipated
      costs and contingent liabilities associated with
    acquisitions;





·
              failure
      of acquired businesses to achieve expected
  results;


·
                our
      failure to retain key customers or personnel of acquired businesses;
      and
 
 ·
                difficulties
      entering markets in which we have no or limited
  experience.
 
 These
risks, as well as other circumstances that often accompany expansion through
acquisitions, could inhibit our growth and negatively impact our operating
results. In addition, the size, timing, and success of any future acquisitions
may cause substantial fluctuations in our operating results from quarter to
quarter. Consequently, our operating results for any quarter may not be
indicative of the results that may be achieved for any subsequent quarter or for
a full fiscal year. These fluctuations could adversely affect the market price
of our common stock.




11





Our
failure to integrate the operations of acquired businesses successfully into our
operations or to manage our anticipated growth effectively could materially and
adversely affect our business and operating results.





In order
to pursue a successful acquisition strategy, we must integrate the operations of
acquired businesses into our operations, including centralizing certain
functions to achieve cost savings and pursuing programs and processes that
leverage our revenue and growth opportunities. The integration of the
management, operations, and facilities of acquired businesses with our own could
involve difficulties, which could adversely affect our growth rate and operating
results. We may be unable to do any of the following:





·
              effectively
      complete the integration of the management, operations, facilities and
      accounting and information systems of acquired businesses with our
      own;





·
              efficiently
      manage the combined operations of the acquired businesses with our
      operations;





·
              achieve
      our operating, growth and performance goals for acquired
      businesses;





·
              achieve
      additional revenue as a result of our expanded operations;
    or





·
              achieve
      operating efficiencies or otherwise realize cost savings as a result of
      anticipated acquisition
synergies.





Our rate
of growth and operating performance may suffer if we fail to manage acquired
businesses profitably without substantial additional costs or operational
problems or to implement effectively combined growth and operating
strategies.





If
we fail to develop and maintain an effective system of internal controls, we may
not be able to accurately report our financial results or prevent fraud. As a
result, current and potential stockholders could lose confidence in our
financial reports, which could harm our business and stock price.





Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. We are currently required to provide an assessment of
our internal controls over financial reporting. Beginning with the annual report
for our fiscal year ended December 31, 2009, under Section 404 of the
Sarbanes-Oxley Act of 2002, our independent registered public accounting firm
must provide an annual attestation report on our internal control over financial
reporting. The process of strengthening our internal controls and complying with
Section 404 is expensive and time-consuming, and requires significant management
attention, especially given that we have just initiated efforts to comply with
the requirements of Section 404. We cannot be certain that the measures we will
undertake will ensure that we will maintain adequate controls over our financial
processes and reporting in the future. Furthermore, if we are able to rapidly
grow our business, the internal controls that we will need will become more
complex, and significantly more resources will be required to ensure our
internal controls remain effective. Failure to implement required controls, or
difficulties encountered in their implementation, could harm our operating
results or cause us to fail to meet our reporting obligations. The disclosure of
any material weaknesses in our internal controls that are identified by our
auditors, even if the weakness is quickly remedied, could diminish investors’
confidence in our financial statements and harm our stock price. In addition,
non-compliance with Section 404 could subject us to a variety of administrative
sanctions, including the suspension of trading, ineligibility for listing on a
national securities exchange, and the inability of registered broker-dealers to
make a market in our common stock, which would further reduce our stock
price.





Costs
incurred because we are a public company may affect our
profitability.





As a
public company, we incur significant legal, accounting and other expenses, and
we are subject to the SEC’s rules and regulations relating to public disclosure
that generally involve a substantial expenditure of financial resources. In
addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently
implemented by the SEC, require changes in corporate governance practices of
public companies. We expect that full compliance with these new rules and
regulations will significantly increase our legal and financial compliance costs
and make some activities more time-consuming and costly, which may negatively
impact our financial results. To the extent our earnings suffer as a result of
the financial impact of our SEC reporting or compliance costs, our ability to
develop an active trading market for our securities could be
harmed.




As a
public company, we also expect that these new rules and regulations may make it
more difficult and expensive for us to obtain director and officer liability
insurance in the future, and we may be required to accept reduced policy limits
and coverage or incur substantially higher costs to obtain the same coverage. As
a result, it may be more difficult for us to attract and retain qualified
persons to serve on our board of directors or as executive
officers.




It may be
time-consuming, difficult and costly for us to develop and implement the
internal controls and reporting procedures required by the Sarbanes-Oxley Act,
when applicable to us. Some members of our management team have limited or no
experience operating a company with securities traded or listed on an exchange,
or subject to SEC rules and requirements, including SEC reporting practices and
requirements that are applicable to a publicly traded company. We may need to
recruit, hire, train, and retain additional financial reporting, internal
controls, and other personnel in order to develop and implement appropriate
internal controls and reporting procedures. If we are unable to comply with the
internal controls requirements of the Sarbanes-Oxley Act, when applicable, we
may not be able to obtain our independent accountant’s attestation report on our
internal controls over financial reporting required by the Sarbanes-Oxley
Act.
  Our
business is exposed to risks associated with the ongoing financial crisis and
weakening global economy, which increases the uncertainty of project financing
for commercial solar installations and the risk of non-payment from both
commercial and residential customers.
  The
recent severe tightening of the credit markets, turmoil in the financial
markets, and weakening global economy are contributing to slowdowns in the solar
industry, which slowdowns may worsen if these economic conditions are prolonged
or deteriorate further.  The market for installation of solar power
systems depends largely on commercial and consumer capital
spending.  Economic uncertainty exacerbates negative trends in these
areas of spending, and may cause our customers to push out, cancel, or refrain
from placing orders, which may reduce our net sales.  Difficulties in
obtaining capital and deteriorating market conditions may also lead to the
inability of some customers to obtain affordable financing, including
traditional project financing and tax-incentive based financing and home
equity-based financing, resulting in lower sales to potential customers with
liquidity issues, and may lead to an increase of incidents where our customers
are unwilling or unable to pay for systems they purchase, and additional bad
debt expense for the Company.  Further, these conditions and
uncertainty about future economic conditions may make it challenging for us to
obtain equity and debt financing to meet our working capital requirements to
support our business, forecast our operating results, make business decisions,
and identify the risks that may affect our business, financial condition and
results of operations.  If we are unable to timely and appropriately
adapt to changes resulting from the difficult macroeconomic environment, our
business, financial condition, or results of operations may be materially and
adversely affected.




12





Risks
Relating To Our Industry





We have experienced technological
changes in our industry. New technologies may prove inappropriate
and result in liability to us or may not gain market acceptance by our
customers.





The solar
power industry, which currently accounts for less than 1% of the world’s power
generation according to the Solar Energy Industries Association, is subject to
technological change. Our future success will depend on our ability to
appropriately respond to changing technologies and changes in function of
products and quality. If we adopt products and technologies that are not
attractive to consumers, we may not be successful in capturing or retaining a
significant share of our market. In addition, some new technologies are
relatively untested and unperfected and may not perform as expected or as
desired, in which event our adoption of such products or technologies may cause
us to lose money.





A drop in the retail price of
conventional energy or non-solar alternative energy sources may negatively impact
our profitability.





We
believe that a customer’s decision to purchase or install solar power
capabilities is primarily driven by the cost and return on investment resulting
from solar power systems. Fluctuations in economic and market conditions that
impact the prices of conventional and non-solar alternative energy sources, such
as decreases in the prices of oil, coal and other fossil fuels and changes in
utility electric rates and net metering policies, could cause the demand for
solar power systems to decline, which would have a negative impact on our
profitability.





Existing regulations, and changes to
such regulations, may present technical, regulatory, and economic
barriers to the purchase and use of solar power products, which may
significantly reduce demand for our products.





Installations
of solar power systems are subject to oversight and regulation in accordance
with national and local ordinances, building codes, zoning, environmental
protection regulation, utility interconnection requirements for metering, and
other rules and regulations. We attempt to keep up-to-date about these
requirements on a national, state, and local level, and must design systems to
comply with varying standards. Certain cities may have ordinances that prevent
or increase the cost of installation of our solar power systems. In addition,
new government regulations or utility policies pertaining to solar power systems
are unpredictable and may result in significant additional expenses or delays
and, as a result, could cause a significant reduction in demand for solar energy
systems and our services. For example, there currently exist metering caps in
certain jurisdictions that effectively limit the aggregate amount of power that
may be sold by solar power generators into the power grid.





Our business depends on the
availability of rebates, tax credits and other financial incentives, the reduction
or elimination of which would reduce the demand for our services.





Many
states, including California, Nevada, and New Jersey, offer substantial
incentives to offset the cost of solar power systems. These incentives can take
many forms, including direct rebates, state tax credits, system performance
payments and Renewable Energy Credits (“RECs”). Moreover, although the United
States Congress recently passed legislation to extend for 8 years a 30% federal
tax credit for the installation of solar power systems, there can be no
assurance that they will be further extended once they expire. Additionally,
businesses that install solar power systems may elect to accelerate the
depreciation of their system over five years. Spain also offers substantial
incentives, including feed-in tariffs. Spain’s Industry Ministry has implemented
a capped solar subsidy program for MW installation and reduced tariff
levels.  A reduction in or elimination of such incentives could
substantially increase the cost to our customers, resulting in significant
reductions in demand for our products and services, which may negatively impact
our sales.





If solar power technology is not
suitable for widespread adoption or sufficient demand for solar power
products does not develop or takes longer to develop than we anticipate, our sales
would decline, and we would be unable to achieve or sustain
profitability.





The
market for solar power products is emerging and rapidly evolving, and its future
success is uncertain. Many factors will influence the widespread adoption of
solar power technology and demand for solar power products,
including:





·
              cost
      effectiveness of solar power technologies as compared with conventional
      and non-solar alternative energy
technologies;





·
              performance
      and reliability of solar power products as compared with conventional and
      non-solar alternative energy
products;





·
              capital
      expenditures by customers that tend to decrease if the U.S. economy slows;
      and




·
                availability
      of government subsidies and
incentives.
 
 If solar
power technology proves unsuitable for widespread commercial deployment or if
demand for solar power products fails to develop sufficiently, we would be
unable to generate enough revenue to achieve and sustain profitability. In
addition, demand for solar power products in the markets and geographic regions
we target may not develop or may develop more slowly than we
anticipate.


13




Risks
Related to Doing Business in Spain





Adverse
changes in the political and economic policies of the Spanish government could
have a material adverse effect on the overall economic growth of Spain, which
could reduce the demand for our products and materially and adversely affect our
competitive position.





A
significant portion of our business operations are conducted in Spain through
our indirect wholly owned subsidiary, Premier Power Spain, and a significant
portion of our sales are made in Spain. Spain offers substantial incentives,
including feed-in tariffs, to encourage the growth of solar power as a form of
renewable energy. Accordingly, our business, financial condition, results of
operations, and prospects are affected significantly by economic, political, and
legal developments in Spain. Any adverse change in such policies could have a
material adverse effect on the overall economic growth in Spain or the level of
our incentives, which in turn could lead to a reduction in demand for our
products and consequently have a material adverse effect on our
businesses.





Fluctuation
in the value of the Euro may have a material adverse effect on an investment in
our securities.





Changes
in exchange rates would affect the value of deposits of currencies we hold. We
do not currently hedge against exposure to currencies. We cannot predict with
certainty future exchange rates and their impact on our operating results.
Movements between the U.S. dollar and the Euro could have a material impact on
our profitability.





Our
business benefits from certain Spanish government incentives. Expiration of, or
changes to, these incentives could have a material adverse effect on our
operating results.





The
Spanish government has provided various incentives to solar energy providers in
order to encourage development of the solar industry. Such incentives include
feed-in tariffs and other measures. Reduction in or elimination of such
incentives or delays or interruptions in the implementation of such favorable
policies could substantially decrease the economic benefits of solar to our
customers, resulting in significant reductions in demand for our products and
services, which would negatively impact our sales.





Effecting service of legal process,
enforcing foreign judgments, or bringing original actions in Spain based on
United States or other foreign laws against us or our management may be
difficult.





We
conduct a significant amount of our business through our indirect wholly owned
subsidiary, Premier Power Spain, which is established in Spain, and a portion of
our assets are located in Spain. As a result, it may not be possible to effect
service of process in Spain against us or upon our executive officers or
directors, including with respect to matters arising under U.S. federal
securities laws or applicable state securities laws. Moreover, there is
uncertainty that the courts of Spain would enforce judgments of U.S. courts
against us or our directors and officers based on the civil liability provisions
of the securities laws of the United States or any state, or entertain an
original action brought in Spain based upon the securities laws of the United
States or any state.  These risks may discourage a potential acquirer
from seeking to acquire shares of our common stock which, in turn, could reduce
our stock price or prevent our stockholders from realizing a premium over our
stock price.





Risk
Relating to Our Securities





Generally,
we have not paid any cash dividends, and no cash dividends will be paid in the
foreseeable future, which may require our stockholders to generate a cash flow
from their investment in our securities through alternative means.





We do not
anticipate paying cash dividends on our common stock in the foreseeable future,
and we may not have sufficient funds legally available to pay dividends. Even if
funds are legally available for distribution, we may nevertheless decide not to
or may be unable to pay any dividends to our stockholders. We intend to retain
all earnings for our operations. Accordingly, our stockholders may have to sell
some or all of their common stock in order to generate cash flow from their
investment. Our stockholders may not receive a gain on their investment when
they sell their common stock and may lose some or all of the amount of their
investment. Any determination to pay dividends in the future on our common stock
will be made at the discretion of our board of directors and will depend on our
results of operations, financial conditions, contractual restrictions,
restrictions imposed by applicable law, capital requirements, and other factors
that our board of directors deems relevant.




14




We
may need additional capital, and the sale of additional shares or other equity
securities could result in dilution to our
stockholders.  Additionally, our stockholders may face dilution from
exercise of our warrants or conversion of our Series A Convertible Preferred
Stock.





We
believe that our current cash and cash equivalents, anticipated cash flow from
operations, and net proceeds from our September 9, 2008 financing will be
sufficient to meet our anticipated cash needs for the near future. We may,
however, require additional cash resources due to changed business conditions or
other future developments, including any investments or acquisitions we may
decide to pursue. If our resources are insufficient to satisfy our cash
requirements, we may seek to sell additional equity or debt securities or obtain
an increased credit facility. The sale of additional equity securities could
result in dilution to our stockholders. The incurrence of additional
indebtedness would result in increased debt service obligations and could result
in further operating and financing covenants that would further restrict our
operations. We cannot provide assurances that financing will be available in
amounts or on terms acceptable to us, if at all.  Additionally, there
are outstanding warrants and shares of our Series A Convertible Preferred Stock
issued by us, the exercise or conversion, respectively, of which may also dilute
our stockholders.





The
application of the “penny stock” rules could adversely affect the market price
of our common stock and increase our stockholders’ transaction costs to sell
those shares.





Our
common stock may be subject to the “penny stock” rules adopted under Section
15(g) of the Securities Exchange Act of 1934. The penny stock rules apply to
companies that are not traded on a national securities exchange whose common
stock trades at less than $5.00 per share or that have tangible net worth of
less than $5,000,000 ($2,000,000 if the company has been operating for three or
more years). The “penny stock” rules impose additional sales practice
requirements on broker-dealers who sell securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of securities and
have received the purchaser’s written consent to the transaction before the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the broker-dealer must deliver, before the transaction, a disclosure
schedule prescribed by the SEC relating to the penny stock market. The
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. These additional burdens
imposed on broker-dealers may restrict the ability or decrease the willingness
of broker-dealers to sell our common stock, and may result in decreased
liquidity for our common stock and increased transaction costs for sales and
purchases of our common stock as compared to other securities.





Our
common stock is thinly traded, and an active public market for our common stock
may not develop or be sustained.





Although
our common stock is quoted on the Over-the-Counter Bulletin Board (“OTC”), we
cannot predict the extent to which an active public market for our common stock
will develop or be sustained. Our common stock has historically been
sporadically or “thinly traded” on the OTC, meaning that the number of persons
interested in purchasing our common stock at or near bid prices at any given
time may be relatively small or nonexistent. This situation is attributable to a
number of factors, including the fact that we are a small company that is
relatively unknown to stock analysts, stock brokers, institutional investors and
others in the investment community that generate or influence sales volume, and
that even if we came to the attention of such persons, they tend to be
risk-adverse and would be reluctant to follow an unproven company such as ours
or purchase or recommend the purchase of our shares until such time as we become
more seasoned and viable. As a consequence, there may be periods of several days
or more when trading activity in our shares is minimal or non-existent, as
compared to a seasoned issuer that has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect
on our stock price. We cannot provide assurances that a broader or more active
public trading market for our common stock will develop or be sustained, or that
current trading levels will be sustained.





The
volatility of the market price of our common stock may render our stockholders
unable to sell their shares of our common stock at or near “ask” prices or at
all if they need to sell their shares to raise money or otherwise desire to
liquidate their shares.





The
market price of our common stock is particularly volatile given our status as a
relatively small company with a small and thinly traded “float” that could lead
to wide fluctuations in our stock price. The price at which our common stock is
purchased may not be indicative of the price that will prevail in the trading
market. An investor in our common stock may be unable to sell their common stock
at or above their purchase price if at all, which may result in substantial
losses to such investor.





The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our stock price will
continue to be more volatile than a seasoned issuer for the indefinite future.
The volatility in our stock price is attributable to a number of factors. As
noted above, our common stock is sporadically and/or thinly traded. As a
consequence of this lack of liquidity, the trading of relatively small
quantities of shares by our stockholders may disproportionately influence the
price of those shares in either direction. The price for our shares could, for
example, decline precipitously in the event a large number of our shares are
sold on the market without commensurate demand, as compared to a seasoned issuer
which could better absorb those sales without adverse impact on its stock price.
The following factors also may add to the volatility in the price of our common
stock: actual or anticipated variations in our quarterly or annual operating
results; adverse outcomes; additions to or departures of our key personnel, as
well as other items discussed under this “Risk Factors” section, as well as
elsewhere in this report. Many of these factors are beyond our control and may
decrease the market price of our common stock, regardless of our operating
performance. We cannot make any predictions or projections as to what the
prevailing market price for our common stock will be at any time, including as
to whether our common stock will sustain its current market prices, or as to
what effect the sale of shares or the availability of shares for sale at any
time will have on the prevailing market price.




15




If
we do not meet the listing standards established by Nasdaq, NYSE Alternext US
LLC, or other similar markets, our common stock may not become listed for
trading on one of those markets, which may restrict the liquidity of shares held
by our stockholders.





As soon
as reasonably practicable, we intend to apply to list our common stock for
trading on a national securities exchange such as the Nasdaq Stock Market
(“Nasdaq”) or NYSE Alternext U.S. LLC (the “Alternext”).  The listing
of our common stock on a national securities exchange may result in a more
active public market for our common stock, resulting in turn in greater
liquidity of shares held by our stockholders. Nasdaq and the Alternext have
established certain quantitative criteria and qualitative standards that
companies must meet in order to become and remain listed for trading on these
markets. We cannot guarantee that we will be able to meet or maintain all
necessary requirements for listing; therefore, we cannot guarantee that our
common stock will be listed for trading on a national securities
exchange.





Volatility
in our common stock price may subject us to securities litigation that could
result in substantial costs to our business.





The
market for our common stock may be characterized by significant price volatility
when compared to seasoned issuers, and we expect our stock price will be more
volatile than a seasoned issuer for the indefinite future. In the past,
plaintiffs have often initiated securities class action litigation against a
company following periods of volatility in the market price of its securities.
We may, in the future, be the target of similar litigation. Securities
litigation could result in substantial costs and liabilities and could divert
management’s attention and resources that otherwise could have been focused on
our business operations.





Past
activities of our company and affiliates may lead to future liability for our
company.





Prior to
our acquisition of Premier Power California, we were a third-party logistics
provider for supply chain management, a business unrelated to our current
operations. Any liabilities relating to such prior business against which we are
not completely indemnified will be borne by us and may result in substantial
costs to the Company and could divert management’s attention and resources that
otherwise could have been focused on our business operations.





We
have raised substantial amounts of capital in a recent financing, and if we
inadvertently failed to comply with applicable securities laws, ensuing
rescission rights or lawsuits would severely damage our financial
position.





The
securities offered in our September 9, 2008 private placement were not
registered under the Securities Act or any state “blue sky” law in reliance upon
exemptions from such registration requirements. Such exemptions are highly
technical in nature, and if we inadvertently failed to comply with the
requirements or any of such exemptive provisions, the investor would have the
right to rescind their purchase of our securities or sue for damages. If the
investor was to successfully seek such rescission or prevail in any such suit,
we would face severe financial demands that could materially and adversely
affect our financial position. Financings that may be available to us under
current market conditions frequently involve sales at prices below the prices at
which our common stock currently is quoted on the OTC or exchange on which our
common stock may in the future be listed, as well as the issuance of warrants or
convertible securities at a discount to market price.





Our
principal stockholders are two members of our management.  As these
principal stockholders substantially control our corporate actions, our other
stockholders may face difficulty in exerting any influence over matters not
supported by these two members of management.





Our
principal stockholders include Dean R. Marks, who is our Chairman of the Board,
President, and Chief Executive Officer, and Miguel de Anquin, who is our Chief
Operating Officer and Corporate Secretary and a member of our Board. Messrs.
Marks and de Anquin own approximately 69% of our outstanding shares of common
stock. These stockholders, acting individually or as a group, could exert
substantial influence over matters such as electing directors, amending our
certificate of incorporation or bylaws, and approving mergers or other business
combinations or transactions. In addition, because of the percentage of
ownership and voting concentration in these principal stockholders and their
affiliated entities, elections of our board of directors will generally be
within the control of these stockholders and their affiliated entities. While
all of our stockholders are entitled to vote on matters submitted to our
stockholders for approval, the concentration of shares and voting control
presently lies with these principal stockholders and their affiliated entities.
As such, it would be difficult for stockholders to propose and have approved
proposals not supported by these principal stockholders and their affiliated
entities. There can be no assurance that matters voted upon by our officers and
directors in their capacity as stockholders will be viewed favorably by all
stockholders of our company. The stock ownership of our principal stockholders
and their affiliated entities may discourage a potential acquirer from seeking
to acquire shares of our common stock which, in turn, could reduce our stock
price or prevent our stockholders from realizing a premium over our stock
price.





We
are responsible for the indemnification of our officers and directors, which
could result in substantial expenditures.





Our
bylaws provide for the indemnification of our directors, officers, employees,
and agents, and, under certain circumstances, against attorneys’ fees and other
expenses incurred by them in litigation to which they become a party arising
from their association with or activities on behalf of the Company. This
indemnification policy could result in substantial expenditures, which we may be
unable to recoup.




Our certificate of incorporation
authorizes our board to create new series of preferred stock without further
approval by our stockholders, which could adversely affect the rights of the
holders of our common stock.
 
 Our board
of directors has the authority to fix and determine the relative rights and
preferences of preferred stock. Our board of directors also has the authority to
issue preferred stock without further stockholder approval. As a result, our
board of directors could authorize the issuance of a series of preferred stock
that would grant to holders the preferred right to our assets upon liquidation,
the right to receive dividend payments before dividends are distributed to the
holders of common stock and the right to the redemption of the shares, together
with a premium, prior to the redemption of our common stock. In addition, our
board of directors could authorize the issuance of a series of preferred stock
that has greater voting power than our common stock or that is convertible into
our common stock, which could decrease the relative voting power of our common
stock or result in dilution to our existing stockholders.
 
 Contractual
limitations that restrict conversion or exercise of securities held by Vision
Opportunity Master Fund, Ltd. may not necessarily prevent substantial dilution
of the voting power and value of an investment in our securities.
 
 The
contractual limitations that restrict conversion and exercise of shares of
Series A Convertible Preferred Stock (“Series A Stock”) and Series A and Series
B Warrants (collectively, the “Warrants”) held by Vision Opportunity Master
Fund, Ltd. (“Vision”) for shares of our common stock are limited in their
application and effect and may not prevent substantial dilution of our existing
stockholders. Pursuant to the terms of such securities, Vision may not convert
the Series A Stock or exercise the Warrants to the extent that such conversion
or exercise would cause Vision’s beneficial ownership, together with its
affiliates, to exceed 9.99% of the number of shares of our outstanding common
stock immediately after giving effect to the issuance of shares of common stock
as a result of a conversion or exercise.  Vision, may, however waive
this limitation upon 61 days’ notice to the Company.   In
addition, this 9.99% limitation does not prevent Vision from converting the
Series A Stock into, or exercising the Warrant for, shares of our common stock
and then reselling those shares in stages over time where Vision and its
affiliates do not, at any given time, beneficially own shares in excess of the
9.99% limitation.  Consequently, this limitation will not necessarily
prevent substantial dilution of the voting power and value of an investment in
our securities.




16




ITEM
      2.
            PROPERTIES





Our
principal executive offices are located at 4961 Windplay Drive, Suite 100, El
Dorado Hills, California. The table below provides a general description of our
offices and facilities, including those for our international
operations:





Location
                    
                    Principal Activities
                    
                    Area (sq. ft.)
                    
                    Lease Expiration Date4961
      Windplay Drive, Suite 100
                      El
      Dorado Hills, California 95762
                    
                    Company
      headquarters and warehouse
                    
                    6,700
                    
                    Month-to-month3
      Newlands Circle
                      Reno,
      Nevada 80509
                    
                    Bright
      Future office
                    
                    100
                    
                    Month-to-monthAtlantic
      Office Suites, LLC
                      1913
      Atlantic Avenue
                      Manasquan,
      NJ 08736
                    
                    East
      Coast operations
                    
                    72
                    
                    Month-to-month1020
      Nevada St., #201
                      Redlands,
      CA 92374
                    
                    Southern
      California operations
                    
                    2,303
                    
                    September
      30, 2010Pol
      Ind, Calle E, n3
                      Oficina
      0F
                      31192
      Mutilva Baja (Navarra)
                      Spain
                    
                    Spanish
      headquarters
                    
                    500
                    
                    May
      2012Centro
      de Negocios La Garena, 2K
                      Calle
      Granda s/n
                      Alcala
      de Henares, 28806 Madrid
                      Spain
                    
                    Spanish
      regional office
                    
                    1,100
                    
                    December
      30, 2013




Premier Power Spain is party to
a non-cancelable lease for operating facilities in Madrid, Spain, which expires
in 2013, and a non-cancelable lease for operating facilities in Navarra, Spain,
which expires in 2012.  Premier Power California is party to a
non-cancelable lease for operating facilities in Redlands, California, which
expires in 2010.  These leases provide for annual rent increases tied
to the Consumer Price Index. The leases require the following payments as of
December 31, 2008, subject to annual adjustment, if any:




2009
              
              $
              78,0032010
              
              
              43,8452011
              
              
              43,8452012
              
              
              35,3192013
              
              
              23,293Total
              
              $
              224,305


17




ITEM 3.
            LEGAL
PROCEEDINGS




We know
of no material, existing or pending legal proceedings against us, nor are we
involved as a plaintiff in any material proceeding or pending
litigation.  There are no proceedings in which any of our directors,
officers, or affiliates, or any registered or beneficial holder of more than 5%
of our voting securities, or any associate of such persons, is an adverse party
or has a material interest adverse to our company.




ITEM 4.
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS




On November 14, 2008, an amendment to our Certificate of
Incorporation to increase the number of authorized shares of common stock, par
value $.0001 per share, from 100,000,000 shares to 500,000,000 shares (the
“Amendment”) was submitted to the holders of an aggregate 69.1% of our voting
stock (“Majority Stockholders”).  The Majority Stockholders approved
the Amendment by written consent without a meeting.





18




PART II




ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES




Market Information





Our
common stock is traded on the Over-the-Counter Bulletin Board ("OTCBB") under
the symbol "PPRW."  The following table sets forth, for the periods
indicated, the reported high and low closing bid quotations for our common stock
as reported on the OTCBB.  The bid prices reflect inter-dealer
quotations, do not include retail markups, markdowns, or commissions, and do not
necessarily reflect actual transactions.





Quarter
      Ended
            
            High
      Bid
            
            
            Low
      BidDecember
      31, 2008
            
            $
            5.05
            
            
            $
            2.25September
      30, 2008*
            
            $
            5.90
            
            
            $
            4.05June
      30, 2008
            
            $
            *
            
            
            $
            *March
      31, 2008
            
            $
            *
            
            
            $
            *December
      31, 2007
            
            $
            *
            
            
            $
            *September
      30, 2007
            
            $
            *
            
            
            $
            *June
      30, 2007
            
            $
            *
            
            
            $
            *March
      31, 2007
            
            $
            *
            
            
            $
            *





* Our
common stock had no active trading market until September 15, 2008.




As of
March 30, 2009, the closing sales price for shares of our common stock was $3.80
per share on the OTCBB.





Holders





As of
March 31, 2009, we have approximately 44 stockholders of record of our issued
and outstanding common stock based upon a shareholder list provided by our
transfer agent.  Our transfer agent is Computershare located at 350
Indiana Street, Suite 800, Golden, Colorado 80401, and their telephone number is
(303) 262-0600.





Dividend
Policy




We do not
currently intend to pay any cash dividends in the foreseeable future on our
common stock and, instead, intend to retain earnings, if any, for
operations.  Any decision to declare and pay dividends in the future
will be made at the discretion of our board of directors and will depend on,
among other things, our results of operations, cash requirements, financial
condition, contractual restrictions, and other factors that our board of
directors may deem relevant.





Securities
Authorized for Issuance under Equity Compensation Plans





The
following table sets forth, as of December 31, 2008, certain information related
to our compensation plans under which shares of our common stock are authorized
for issuance.




Plan
      Category
                
                COLUMN
      A:
                  Number of Securities
                  to be Issued upon
                  Exercise of
                  Outstanding Options
                  Warrants and Rights
                
                
                Weighted-Average Exercise
                  Price of Outstanding
                  Options, Warrants and
                  Rights
                
                
                Number of Securities
                  Remaining Available
                  For Future Issuance
                  Under Equity
                  Compensation Plans
                  (Excluding Securities
                  Reflected in COLUMN
      A)Equity
      compensation plans approved by security holders
                
                
                ―
                
                
                
                ―
                
                
                
                ―Equity
      compensation plans not approved by security holders
                
                
                0
                (1)
                
                
                ―
                (1)
                
                
                2,951,8759
                (2)Total





(1)
            At
      December 31, 2008, no options were granted pursuant to our 2008 Equity
      Incentive Plan.(2)
            This
      number represents shares of our common stock remaining available for
      future issuance under our 2008 Equity Incentive
  Plan.




On
December 19, 2008, our board of directors approved the Premier Power Renewable
Energy, Inc. 2008 Equity Incentive Plan (the “Plan”).  All of our
employees, officers, and directors, and those of our consultants who (i) are
natural persons and (ii) provide bona fide services to the Company not connected
to a capital raising transaction or the promotion or creation of a market for
our securities are eligible to be granted options or restricted stock awards
(each, an “Award”) under the Plan.  The Plan is administered by our
board, and the board establishes certain terms of option awards, including the
exercise price and duration.  Awards may be made under the Plan for up
to 2,951,875 shares of our common stock, and the maximum number of shares of
common stock with respect to which Awards may be granted to a “covered employee”
as defined by section 162(m) of the Internal Revenue Code of 1986, as amended,
is 1,500,000 shares of common stock.  The Plan allows for adjustments
for changes in common stock and certain other events, including, but not limited
to, any change in control, stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, spin-off, any extraordinary
distribution, and liquidation or dissolution.
 
 Recent
Sales of Unregistered Securities
  None.




19




ITEM
      6.
            SELECTED
      FINANCIAL DATA





Not
applicable.








ITEM
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





The
following discussion and analysis of the results of operations and financial
condition of Premier Power Renewable Energy, Inc. for the fiscal years ending
December 31, 2008 and 2007 should be read in conjunction with our financial
statements and the notes to those financial statements that are included
elsewhere in this report.  Our discussion includes forward-looking
statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations, and intentions.  Actual
results and the timing of events could differ materially from those anticipated
in these forward-looking statements as a result of a number of factors,
including those set forth under the Risk Factors, Cautionary Statement Regarding
Forward-Looking Information, and Business sections in this report.  We
use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and
similar expressions to identify forward-looking statements.





Overview





We were
originally incorporated on August 31, 2006 in the State of Delaware under our
former name “Harry’s Trucking, Inc.”  As a result of a share exchange
transaction that closed on September 9, 2008, our business is the development,
design, and integration of solar energy solutions. We develop, market, sell, and
maintain solar energy systems for residential, commercial, and industrial
customers in North America and Spain through our wholly owned subsidiary Premier
Power Renewable Energy, Inc., a California corporation (“Premier Power
California”), and Premier Power California’s two wholly owned subsidiaries,
Bright Future Technologies, LLC, a Nevada limited liability company (“Bright
Future”) and Premier Power Sociedad Limitada, a limited liability company formed
in Spain (“Premier Power Spain”).





Critical
Accounting Policies and Estimates





Our
management’s discussion and analysis of our financial condition and results of
operations are based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported net sales and expenses
during the reporting periods. On an ongoing basis, we evaluate our estimates and
assumptions. We base our estimates on historical experience and on various other
factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.





While our
significant accounting policies are more fully described in Note 1 to our
consolidated financial statements, we believe that the following accounting
policies are the most critical to aid the reader in fully understanding and
evaluating this discussion and analysis:




Basis of
Presentation – The consolidated financial statements include the accounts
of Premier Power Renewable Energy, Inc. and its subsidiaries.  All
significant intercompany accounts and transactions have been
eliminated.
 
 Inventories
– Inventories, consisting primarily of raw materials, are recorded using the
average cost method and are carried at the lower of cost or market.
 
 Revenue
Recognition – Revenue on photovoltaic system installation contracts is
recognized using the percentage of completion method of accounting. At the end
of each period, the Company measures the cost incurred on each project and
compares the result against its estimated total costs at completion. The percent
of cost incurred determines the amount of revenue to be recognized. Payment
terms are generally defined by the contract and as a result may not match the
timing of the costs incurred by the Company and the related recognition of
revenue. Such differences are recorded as costs and estimated earnings in excess
of billings on uncompleted contracts or billings in excess of costs and
estimated earnings on uncompleted contracts. The Company determines its
customer’s credit worthiness at the time the order is accepted. Sudden and
unexpected changes in a customer’s financial condition could put recoverability
at risk.
  Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools,
repairs, and depreciation costs. Selling and general and administrative costs
are charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and estimated
profitability, including those arising from contract penalty provisions, and
final contract settlements may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Profit
incentives are included in revenues when their realization is reasonably
assured.




20


Earnings per
Share–
Earnings per share is computed in accordance with the provisions of SFAS No.
128, “Earnings Per
Share.” Basic net income (loss) per share is computed using the
weighted-average number of common shares outstanding during the period. Diluted
earnings per share is computed using the weighted-average number of common
shares outstanding during the period, as adjusted for the dilutive effect of the
Company’s outstanding convertible preferred shares using the “if converted”
method and dilutive potential common shares. For all of the periods presented,
the Company had no dilutive potential common shares except for outstanding
convertible preferred shares during the year ended December 31,
2008.  Warrants to purchase 3,500,000 of the Company’s common shares
were excluded as their exercise price exceeded the average market price of the
Company’s common shares.
 2008
                
                
                2007Net
      income
                
                $
                569,068
                
                
                $
                843,865Earnings
      Per Share:Basic
                
                $
                0.03
                
                
                $
                0.04Diluted
                
                $
                0.02
                
                
                $
                0.04Weighted
      Average Shares Outstanding:Basic
                
                
                22,666,138
                
                
                
                21,159,451Diluted
      effect of convertible preferred stock
                
                
                1,083,562
                
                
                
                -Diluted
                
                
                23,749,700
                
                
                
                21,159,451
  Product
Warranties–Prior to January 1,
2007, the Company provided a five year warranty covering the labor and materials
associated with its installations. Effective January 1, 2007, the Company
changed the coverage to generally be ten years in the U.S. and to one year in
Spain for all contracts signed after December 31, 2006. Solar panels and
inverters are warranted by the manufacturer for 25 years and 10 years,
respectively. Activity in the Company’s warranty reserve for the years ended
December 31, 2008 and 2007 was as follows:
 
 2008
              
              
              2007Balance
      at beginning of period
              
              $
              172,002
              
              
              $
              58,375Warranty
      expense
              
              
              275,
      108
              
              
              
              132,533Less:
      warranty claims
              
              
              (79,860
              )
              
              
              (18,906
              )Balance
      at end of period
              
              $
              367,250
              
              
              $
              172,002
  Comprehensive
Income–Statement of Financial
Accounting Standards No. 130, “Reporting Comprehensive
Income,” establishes standards for reporting comprehensive income and its
components in a financial statement that is displayed with the same prominence
as other financial statements. Comprehensive income, as defined, includes all
changes in equity during the period from non-owner sources, such as foreign
currency translation adjustments.
 
 Recently Issued Accounting
Pronouncements
 
 In
December 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“FAS”)  No. 157,
"Fair Value
Measurement" ("FAS 157"), which defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP) and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value
measurements.  This statement is effective for fiscal years beginning
after November 15, 2007, except for non-financial assets and liabilities
measured at fair value on a non-recurring basis for which the
effective date will be for fiscal years beginning after November 15,
2008.  The adoption of FAS 157 for financial assets and liabilities
did not have a material impact on the Company's consolidated financial
statements.  The adoption of FAS 157 for non-financial assets is not
expected to have a material impact on the Company’s consolidated financial
statements.
 
 In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option
for  Financial
Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115” (“FAS
159”), which permits entities to choose to measure many financial instruments
and certain other items at fair value at specified election dates. A business
entity is required to report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each subsequent reporting
date. This statement is expected to expand the use of fair value measurement.
FAS 159 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years, and is
applicable beginning in the first quarter of 2008. The adoption of FAS 159 did
not have a material effect on our results of operations, cash flows or financial
position.
 
 In
December 2007, the FASB issued FAS No. 141(R), “Business Combinations” (“FAS
141(R)”), which requires the acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination. FAS 141(R) is prospectively effective to business combinations for
which the acquisition is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The impact of FAS 141(R) on the
Company's consolidated financial statements will be determined in part by the
nature and timing of any future acquisition completed.
 
 In
December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements (as amended)” (“FAS 160”), which
improves the relevance, comparability, and transparency of financial information
provided to investors by requiring all entities to report noncontrolling
(minority) interests in subsidiaries in the same way as equity consolidated
financial statements. Moreover, FAS 160 eliminates the diversity that currently
exists in accounting from transactions between an entity and non-controlling
interests by requiring they be treated as equity transactions. FAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008; earlier adoption is
prohibited.




21




In March
2008, the FASB issued FAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No.
133”  (“FAS 161”), which requires additional disclosures about
the objectives of the derivative instruments and hedging activities, the method
of accounting for such instruments under SFAS No. 133 and its related
interpretations, and a tabular disclosure of the effects of such instruments and
related hedged items on our financial position, financial performance, and cash
flows. FAS 161 is effective beginning January 1, 2009. We are currently
assessing the potential impact that adoption of FAS 161 may have on our
financial statements.
 
 In April
2008, the FASB issued FASB Staff Position (FSP) FAS No. 142-3, “Determination of the Useful Life of
Intangible Assets.” The FSP amends the factors an entity should consider
in developing renewal or extension assumptions used in determining the useful
life of recognized intangible assets under FAS No. 142, “Goodwill and Other Intangible
Assets.” The FSP must be applied prospectively to intangible assets
acquired after the effective date. The Company will apply the guidance of the
FSP to intangible assets acquired after January 1, 2009.
  In May
2008, the FASB issued FAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“FAS 162”), which identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America (the GAAP hierarchy). This statement is effective
November 15, 2008 which is 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments of AU Section 411, “The Meaning of Presents Fairly in
Conformity with Generally Accepted Accounting Principles.”  The
adoption of FAS 162 did not have a material effect on our financial
statements.




Results
of Operations





The
following table sets forth the results of our operations for the years ended
December 31, 2008 and 2007:





Year ended December 31,2008
              
              
              % of
                Revenues
              
              
              2007
              
              
              % of
                RevenuesNet
      sales
              
              $
              44,237,984
              
              
              
              100.0
              %
              
              $
              16,685,690
              
              
              
              100.0
              %Cost
      of sales
              
              
              (38,710,592
              )
              
              
              87.5
              %
              
              
              (12,440,839
              )
              
              
              74.6
              %Gross
      profit
              
              
              5,527,392
              
              
              
              12.5
              %
              
              
              4,244,851
              
              
              
              25.4
              %Operating
      expenses
              
              
              4,729,542
              
              
              
              10.7
              %
              
              
              3,371,778
              
              
              
              20.2
              %Operating
      income
              
              
              797,850
              
              
              
              1.8
              %
              
              
              873,073
              
              
              
              5.2
              %Other
      income (expense)
              
              
              (45,324
              )
              
              
              (0.1
              )5
              
              
              (5,882
              )
              
              
              0.0
              %Income
      before income taxes
              
              
              752,526
              
              
              
              1.7
              %
              
              
              867,191
              
              
              
              5.2
              %Income
      tax expense (benefit)
              
              
              (40,857
              )
              
              
              (0.1
              )%
              
              
              39,873
              
              
              
              0.2
              %Minority
      interest
              
              
              (224,315
              )
              
              
              (0.5
              )%
              
              
              16,547
              
              
              
              0.1
              %Net
      income
              
              $
              569,068
              
              
              
              1.3
              %
              
              $
              843,865
              
              
              
              5.1
              %





Net
sales.  During the
2008 fiscal year, we had net sales of $44,237,984 as compared to net sales of
$16,685,690 during the 2007 fiscal year, an increase of approximately
165%.  The increase is attributable to strong sales
growth in Spain and increased commercial sales in the U.S., which grew almost
585% and 125%, respectively.  We had growth in Spain and U.S.
commercial sales because of increased sales efforts in those
markets.  There was also continued growth in our U.S. residential
business as a result of a new Southern California residential sales office that
opened during 2008.





Cost of
sales.  Cost of
sales for the 2008 fiscal year was $38,710,592 as compared to $12,440,839 for
the 2007 fiscal year, an increase of approximately 211%.   The
increase in cost of sales is attributable to the growth in our commercial sales
as commercial projects carry a higher cost of sales relative to net
sales.  During 2008, we were awarded and completed a large commercial
project performing only installation services, which did not involve the high
level of integration that we normally provide.





Gross
profit.  Our gross profit for the 2008 fiscal year was
$5,527,392 as compared to a gross profit of $4,244,851 for the 2007 fiscal year,
representing gross margins of approximately 12.5 % and 25.4%,
respectively.  The decrease in gross profit percent is directly
related to our decision to increase our commercial contracts, which generally
have lower gross profit margins.





Operating
expenses.
  Our operating expenses consist of sales and marketing expenses and
administrative expenses.  During the 2008 fiscal year, total operating
expenses were $4,729,542, consisting of sales and marketing costs of $2,224,362
and administrative costs of $2,505,180, while total operating expenses for the
2007 fiscal year were $3,371,778, consisting of sales and marketing costs of
$1,493,890 and administrative costs of $1,877,888, representing an increase of
approximately 40%.  As a percentage of sales, operating expenses were
10.7% and 20.2% for the twelve months ended December 31, 2008 and 2007,
respectively.  The increase in operating expenses from 2007 to 2008 is
due to growth in our commercial sales force and increased professional costs
related to becoming a public company through our share exchange transaction that
closed in 2008.





Other
expense.  We had other
expenses of $45,324 for the 2008 fiscal year as compared to other expenses of
$5,882 for the 2007 fiscal year.  The increase in other expenses was
due to increased interest expense from greater use of the Company’s line of
credit.





Net
income.  We had net income of $569,068 for the 2008 fiscal year
as compared to net income of $843,865 for the 2007 fiscal year.  The
decrease in net income is attributable to growth in our commercial business,
which has lower gross profit margins as compared to our residential sales, and
an increase in operating expenses.




22




LIQUIDITY





Cash
Flows





Net cash
flow used in operating activities was $115,769 for the 2008 fiscal year while
net cash flow provided by operating activities was $844,698 for the 2007 fiscal
year.  The decrease in net cash flow from operating activities was
mainly due to an increase in accounts receivable and a decrease in billings in
excess of costs and estimated earnings on uncompleted contracts, which was not
significantly offset by an increase in net cash flow attributable to a
decrease in inventory and accounts payable.





Net cash
flow used in investing activities was $150,868 for 2008 fiscal year and net
cash flow provided by investing activities was $3,740 for the 2007 fiscal
year.  The decrease in net cash flow from investing activities
was due to increased purchases of assets to support operations.





Net cash
flow provided by financing activities was $4,815,118 for the 2008 fiscal
year while net cash flow used in financing activities was $508,275 for the
2007 fiscal year.  The increase in net cash flow from financing
activities was mainly due to net proceeds from our $7 million financing that
closed on September 9, 2008.




Material
Impact of Known Events on Liquidity




Our
business is exposed to risks associated with the ongoing financial crisis and
weakening global economy, which may have a material impact on our short-term and
long-term liquidity as a result of the uncertainty of project financing for
commercial solar installations and the risk of non-payment from both commercial
and residential customers.  The recent severe tightening of the credit
markets, turmoil in the financial markets, and weakening global economy are
contributing to slowdowns in the solar industry, which slowdowns may worsen if
these economic conditions are prolonged or deteriorate further.  The
market for installation of solar power systems depends largely on commercial and
consumer capital spending.  Economic uncertainty exacerbates negative
trends in these areas of spending, and may cause our customers to push out,
cancel, or refrain from placing orders, which may reduce our net
sales.  Difficulties in obtaining capital and deteriorating market
conditions may also lead to the inability of some customers to obtain affordable
financing, including traditional project financing and tax-incentive based
financing and home equity-based financing, resulting in lower sales to potential
customers with liquidity issues, and may lead to an increase of incidents where
our customers are unwilling or unable to pay for systems they purchase, and
additional bad debt expense for the Company.  Further, these
conditions and uncertainty about future economic conditions may make it
challenging for us to obtain equity and debt financing to meet our working
capital requirements to support our business.




There are
no other known events that are expected to have a material impact on our
short-term or long-term liquidity.




CAPITAL
RESOURCES





We have
financed our operations primarily through cash flows from operations and
borrowings. On September 9, 2008, we received gross proceeds of $7,000,000 from
a private placement financing transaction. We also have a credit line that is
utilized solely for working capital and capital expenditures, which expires on
May 27, 2009.  We plan to renew it with the lender or replace it with
a credit line with a new lender. Additionally, as the credit markets tighten, we
continue to strengthen our balance sheet, allowing us to continue to receive
favorable credit terms as needed.  Thus, we believe that our current
cash and cash equivalents, anticipated cash flow from operations, net proceeds
from the private placement financing, and line of credit will be sufficient to
meet our anticipated cash needs, including our cash needs for working capital
and capital expenditures for at least the next 12 months. The proceeds from the
private placement financing will be used for general working capital purposes
(including funding the purchase of additional inventory and advertising and
marketing expenses) and for acquisitions we may decide to pursue.





We may,
however, require additional cash due to changes in business conditions or other
future developments, including any investments or acquisitions we may decide to
pursue. To the extent it becomes necessary to raise additional cash in the
future, we may seek to raise it through the sale of debt or equity securities,
funding from joint-venture or strategic partners, debt financing or loans,
issuance of common stock or a combination of the foregoing. Other than our lines
of credit with banks, we currently do not have any binding commitments for, or
readily available sources of, additional financing. We cannot provide any
assurances that we will be able to secure the additional cash or working capital
we may require to continue our operations.





CONTRACTUAL
OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS





Line of Credit


On March
9, 2009, Premier Power California entered into an agreement with Guaranty Bank
for a $3,000,000 line of credit that became effective on February 27, 2009 and
matures on May 27, 2009.  This line of credit renewed a $3,000,000
line of credit that Premier Power California had with Guaranty Bank that matured
on February 26, 2009.  The line of credit is secured by the assets of
Premier Power California and personal guaranties issued by our Chairman and
Chief Executive Officer, Dean Marks; Sarilee Marks, the wife of Dean Marks; and
Bright Future.  The line of credit bears interest at the prime rate
plus 1%.  At December 31, 2008, the interest rate was
6%.  As of March 31, 2009, there were no amounts outstanding under our
agreement with Guaranty Bank.




23




Contractual
Obligations
 
 We have
certain fixed contractual obligations and commitments that include future
estimated payments. Changes in our business needs, cancellation provisions,
changing interest rates, and other factors may result in actual payments
differing from the estimates. We cannot provide certainty regarding the timing
and amounts of payments. We have presented below a summary of the most
significant assumptions used in our determination of amounts presented in the
tables, in order to assist in the review of this information within the context
of our consolidated financial position, results of operations, and cash
flows.


The
following table summarizes our contractual obligations as of December 31, 2008,
and the effect these obligations are expected to have on our liquidity and cash
flows in future periods.




Payments
      Due by PeriodTotal
            
            
            Less
      than 1
              year
            
            
            1-3
      Years
            
            
            3-5
      Years
            
            
            5
      Years +Contractual
      Obligations:Bank
      Indebtedness
            
            $
            115,190
            
            
            
            22,783
            
            
            
            50,147
            
            
            
            37,911
            
            
            
            4,349Other
      Indebtedness
            
            
            15,528
            
            
            
            15,528
            
            
            
            ―
            
            
            
            ―
            
            
            
            ―Operating
      Leases
            
            
            224,305
            
            
            
            78,003
            
            
            
            87,690
            
            
            
            58,612
            
            
            
            ―Totals:
            
            $
            355,023
            
            
            
            116,314
            
            
            
            137,837
            
            
            
            96,523
            
            
            
            4,349




Off-Balance
Sheet Arrangements





We have
not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as
stockholders’ equity or that are not reflected in our financial statements.
Furthermore, we do not have any retained or contingent interest in assets
transferred to an unconsolidated entity that serves as credit, liquidity or
market risk support to such entity. We do not have any variable interest in any
unconsolidated entity that provides financing, liquidity, market risk or credit
support to us or engages in leasing, hedging or research and development
services with us.








ITEM 7A.
            QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK





Not
applicable.








ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA





Our consolidated financial statements
for the years ended December 31, 2008 and 2007 begin on the following page.




24




PREMIER
POWER RENEWABLE ENERGY, INC.


CONSOLIDATED
FINANCIAL STATEMENTS





December
31, 2008 and 2007





Index to
Consolidated Financial Statements




PagesReport
      of Independent Registered Public Accounting Firm
            
            
            F-2Consolidated
      Balance Sheets
            
            
            F-3Consolidated
      Statements of Operations
            
            
            F-4Consolidated
      Statements of Shareholders’ Equity
            
            
            F-5Consolidated
      Statements of Cash Flows
            
            
            F-6Notes
      to Consolidated Financial Statements
            
            
            F-7




F-1




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Board of
Directors and Shareholders
 Premier
Power Renewable Energy, Inc.
 El Dorado
Hills, California
  We have
audited the accompanying consolidated balance sheets of Premier Power Renewable
Energy, Inc. as of December 31, 2008 and 2007, and the related consolidated
statements of operations, shareholders’ equity, and cash flows for the years
then ended.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Premier Power Renewable
Energy, Inc. at December 31, 2008 and 2007, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
  
  /s/
Macias Gini & O’Connell LLP
  Sacramento,
California
  March 31,
2009




F-2




PREMIER POWER RENEWABLE ENERGY,
INC.
 CONSOLIDATED
BALANCE SHEETS
 As of December 31,
2008 and 2007


2008
              
              
              2007ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              5,770,536
              
              
              $
              1,278,651Accounts
      receivable, net of allowance for doubtful accounts of$18,000
      at December 31, 2008 and $10,000 at December 31, 2007
              
              
              4,767,653
              
              
              
              2,437,851Inventory
              
              
              1,424,910
              
              
              
              1,417,338Prepaid
      expenses and other current assets
              
              
              259,328
              
              
              
              69,332Costs
      and estimated earnings in excess of billingson
      uncompleted contracts
              
              
              235,929
              
              
              
              37,245Other
      receivables
              
              
              93,775
              
              
              
              —Due
      from shareholders
              
              
              —
              
              
              
              23,458Deferred
      tax assets
              
              
              228,835
              
              
              
              —Total
      current assets
              
              
              12,780,966
              
              
              
              5,263,875Property
      and equipment, net
              
              
              474,905
              
              
              
              314,166Intangible
      assets
              
              
              1,048,420
              
              
              
              —Goodwill
              
              
              483,496
              
              
              
              —Deferred
      tax assets, long-term
              
              
              24,867
              
              
              
              —Total
      assets
              
              $
              14,812,654
              
              
              $
              5,578,041LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
              
              $
              3,707,141
              
              
              $
              2,611,162Accrued
      liabilities
              
              
              1,368,018
              
              
              
              527,550Billings
      in excess of costs and estimated earningson
      uncompleted contracts
              
              
              1,206,403
              
              
              
              1,451,637Income
      taxes payable
              
              
              184,470
              
              
              
              31,152Deferred
      income taxes
              
              
              —
              
              
              
              —Borrowings,
      current
              
              
              38,311
              
              
              
              58,165Total
      current liabilities
              
              
              6,504,343
              
              
              
              4,679,666Borrowings,
      non-current
              
              
              92,407
              
              
              
              183,223Long-term
      deferred income taxes
              
              
              343,279
              
              
              
              —Total
      liabilities
              
              
              6,940,029
              
              
              
              4,862,889Commitments
      and contingencies (Note 9)Minority
      interest
              
              
              —
              
              
              
              1,650Shareholders'
      equity:Series
      A convertible preferred stock, par value $.0001 per share; 5,000,000
      sharesdesignated;
      20,000,000 shares of preferred stock authorized; 3,500,000and
      0 shares issued and outstanding at December 31, 2008 andDecember
      31, 2007, respectively
              
              
              350
              
              
              
              —Common
      stock, par value $.0001 per share; 500,000,000 shares
      authorized;26,048,750
      and 21,159,451 shares issued and outstanding atDecember
      31, 2008 and December 31, 2007, respectively
              
              
              2,605
              
              
              
              2,116Additional
      paid-in-capital
              
              
              7,542,064
              
              
              
              1,408Retained
      earnings
              
              
              369,296
              
              
              
              700,913Accumulated
      other comprehensive income (loss)
              
              
              (41,690
              )
              
              
              9,065Total
      shareholders' equity
              
              
              7,872,625
              
              
              
              713,502Total
      liabilities and shareholders' equity
              
              $
              14,812,654
              
              
              $
              5,578,041
 The
accompanying notes are an integral part of these financial
statements




F-3




PREMIER POWER RENEWABLE ENERGY,
INC.
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 For the years ended
December 31, 2008 and 2007


2008
              
              
              2007Net
      sales
              
              $
              44,237,984
              
              
              $
              16,685,690Cost
      of sales
              
              
              (38,710,592
              )
              
              
              (12,440,839
              )Gross
      profit
              
              
              5,527,392
              
              
              
              4,244,851Operating
      expenses:Sales
      and marketing
              
              
              2,224,362
              
              
              
              1,493,890General
      and administrative
              
              
              2,505,180
              
              
              
              1,877,888Total
      operating expenses
              
              
              4,729,542
              
              
              
              3,371,778Operating
      income
              
              
              797,850
              
              
              
              873,073Other
      income (expense):Interest
      expense
              
              
              (82,088
              )
              
              
              (26,222
              )Interest
      income
              
              
              36,764
              
              
              
              20,340Total
      other income (expense), net
              
              
              (45,324
              )
              
              
              (5,882
              )Income
      before income taxes
              
              
              752,526
              
              
              
              867,191Income
      tax expense (benefit)
              
              
              (40,857
              )
              
              
              39,873Net
      income before minority interest
              
              
              793,383
              
              
              
              827,318Minority
      interest
              
              
              (224,315
              )
              
              
              16,547Net
      income
              
              $
              569,068
              
              
              $
              843,865Earnings
      Per Share:Basic
              
              $
              0.03
              
              
              $
              0.04Diluted
              
              $
              0.02
              
              
              $
              0.04Weighted
      Average Shares Outstanding:Basic
              
              
              22,666,138
              
              
              
              21,159,451Diluted
              
              
              23,749,700
              
              
              
              21,159,451
 The
accompanying notes are an integral part of these financial
statements




F-4


PREMIER POWER RENEWABLE ENERGY,
INC.
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
 For the years ended
December 31, 2008 and 2007
 Common
      Stock
                
                
                Preferred
      Stock
                
                
                Additional
      Paid
                
                
                Retained
                
                
                Accumulated
      Other ComprehensiveShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                In
      Capital
                
                
                Earnings
                
                
                Income
      (Loss)
                
                
                TotalBalance
      December 31, 2006
                
                
                21,159,451
                
                
                $
                2,116
                
                
                
                —
                
                
                $
                —
                
                
                $
                1,408
                
                
                $
                293,814
                
                
                $
                850
                
                
                $
                298,188Net
      income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                843,865
                
                
                
                
                
                
                
                843,865Foreign
      currency translation adjustment
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                8,215
                
                
                
                8,215Comprehensive
      income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                852,080Distributions
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (436,766
                )
                
                
                
                
                
                
                (436,766
                )Balance
      December 31, 2007
                
                
                21,159,451
                
                
                
                2,116
                
                
                
                
                
                
                
                
                
                
                
                1,408
                
                
                
                700,913
                
                
                
                9,065
                
                
                
                713,502Net
      income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                569,068
                
                
                
                
                
                
                
                569,068Foreign
      currency translation adjustment
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (50,755
                )
                
                
                (50,755
                )Comprehensive
      income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                518,313Issuance
      of shares to purchase minority interest
                
                
                3,059,299
                
                
                
                306
                
                
                
                
                
                
                
                
                
                
                
                1,488,928
                
                
                
                
                
                
                
                
                
                
                
                1,489,234Shares
      issued in connection withreverse
      acquisition
                
                
                1,800,000
                
                
                
                180
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                180Issuance
      of Series A and Series B
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,793,987
                
                
                
                
                
                
                
                
                
                
                
                1,793,987warrantsIssuance
      of Series A convertiblepreferred
      stock
                
                
                
                
                
                
                
                
                
                
                3,500,000
                
                
                
                350
                
                
                
                3,717,558
                
                
                
                
                
                
                
                
                
                
                
                3,717,908Issuance
      of shares for service
                
                
                30,000
                
                
                
                3
                
                
                
                
                
                
                
                
                
                
                
                91,498
                
                
                
                
                
                
                
                
                
                
                
                91,501Distributions
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (452,000
                )
                
                
                
                
                
                
                (452,000
                )Deemed
      constructive contribution(distribution)
      of S-Corp undistributed earnings
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                448,685
                
                
                
                (448,685
                )Balance
      December 31, 2008
                
                
                26,048,750
                
                
                $
                2,605
                
                
                
                3,500,000
                
                
                $
                350
                
                
                $
                7,542,064
                
                
                $
                369,296
                
                
                $
                (41,690
                )
                
                $
                7,872,625
 The
accompanying notes are an integral part of these financial
statements





F-5


PREMIER POWER RENEWABLE ENERGY,
INC.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For
the years ended December 31, 2008 and 2007
 2008
                  
                  
                  2007Cash
      flows from operating activities:Net
      income
                  
                  $
                  569,068
                  
                  
                  $
                  843,865Minority
      interest
                  
                  
                  224,315
                  
                  
                  
                  (16,547
                  )Net
      income before minority interest
                  
                  
                  793,383
                  
                  
                  
                  827,318Adjustments
      to reconcile net income provided by(used
      in) operating activities:Depreciation
      and amortization
                  
                  
                  196,676
                  
                  
                  
                  76,435Loss
      on sale of  property and equipment
                  
                  
                  4,559
                  
                  
                  
                  —Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  (2,352,548
                  )
                  
                  
                  (1,212,554
                  )Other
      receivable
                  
                  
                  (93,775
                  )
                  
                  
                  —Inventory
                  
                  
                  (14,881
                  )
                  
                  
                  (920,884
                  )Prepaid
      expenses and other assets
                  
                  
                  (104,746
                  )
                  
                  
                  86,272Costs
      and estimated earnings in excess of billingson
      uncompleted contracts
                  
                  
                  (198,684
                  )
                  
                  
                  115,842Accounts
      payable
                  
                  
                  1,096,909
                  
                  
                  
                  1,435,966Accrued
      liablities
                  
                  
                  856,568
                  
                  
                  
                  188,320Billings
      in excess of costs and estimated earningson
      uncompleted contracts
                  
                  
                  (218,074
                  )
                  
                  
                  228,511Deferred
      tax assets
                  
                  
                  (272,876
                  )
                  
                  
                  19,472Income
      tax payable
                  
                  
                  191,720
                  
                  
                  
                  —Net
      cash (used in) provided by operating activities
                  
                  
                  (115,769
                  )
                  
                  
                  844,698Cash
      flows from investing activities:Acquisition
      of property and equipment
                  
                  
                  (163,039
                  )
                  
                  
                  (6,692
                  )Proceeds
      from sale of property and equipment
                  
                  
                  12,171
                  
                  
                  
                  10,432Net
      cash (used in) provided by investing activities
                  
                  
                  (150,868
                  )
                  
                  
                  3,740Cash
      flows from financing activities:Net
      principal payments on borrowings
                  
                  
                  (283,527
                  )
                  
                  
                  (48,051
                  )Net
      repayments from shareholders
                  
                  
                  23,458
                  
                  
                  
                  (23,458
                  )Proceeds
      from borrowings
                  
                  
                  15,292
                  
                  
                  
                  —Issuance
      of preferred stock and warrants
                  
                  
                  5,511,895
                  
                  
                  
                  —Distributions
                  
                  
                  (452,000
                  )
                  
                  
                  (436,766
                  )Net
      cash provided by (used in) financing activities
                  
                  
                  4,815,118
                  
                  
                  
                  (508,275
                  )Effect
      of foreign currency on cash and cash equivalents
                  
                  
                  (56,596
                  )
                  
                  
                  3,635Increase
      in cash and cash equivalents
                  
                  
                  4,491,885
                  
                  
                  
                  343,798Cash
      and cash equivalents at begining of period
                  
                  
                  1,278,651
                  
                  
                  
                  934,853Cash
      and cash equivalents at end of period
                  
                  $
                  5,770,536
                  
                  
                  $
                  1,278,651Supplemental
      cash flow information:Interest
      paid
                  
                  $
                  82,088
                  
                  
                  $
                  24,760Taxes
      paid
                  
                  $
                  75,800
                  
                  
                  $
                  24,238Non-cash
      investing and financing activities:Issuance
      of notes to acquire equipment
                  
                  $
                  156,804
                  
                  
                  $
                  185,846Common
      stock issued for services
                  
                  $
                  91,501Common
      stock issued to acquire minority interest
                  
                  $
                  1,489,234
 The
accompanying notes are an integral part of these financial
statements




F-6




PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements




1.
                ORGANIZATION
      AND NATURE OF BUSINESS
  Premier
Power Renewable Energy, Inc., a Delaware corporation (the “Parent”), and its
subsidiaries, Premier Power Renewable Energy, Inc., a California corporation
(Premier Power California), Bright Future Technologies, LLC (Bright Future), and
Premier Power Sociedad Limitada (Premier Power Spain) (collectively the
“Company”) designs, engineers, and installs photovoltaic systems in the United
States and Spain.
 
 Prior to
September 9, 2008, Premier Power California and Bright Future were wholly owned
by a common shareholder group. That same shareholder group was deemed to
exercise control over Premier Power Spain through a 51% ownership interest,
management control, and the absence of disproportionate voting rights. On
September 1, 2008, that shareholder group exchanged their interests in Premier
Power Spain for shares of common stock of Premier Power California. On August
27, 2008, the holders of the 49% minority interest in Premier Power Spain
exchanged their interests in Premier Power Spain for shares of common stock of
Premier Power California. A summary of the fair
value of the acquired tangible and intangible assets and liabilities held by the
49% minority interest is as follows:
  Fair value of shares
      exchanged
              
              $
              1,489,234Tangible
      assets acquired
              
              $
              (1,033,603
              )Amortizing
      intangible assets acquired
              
              $
              (1,110,001
              )Liabilities assumed
              
              $
              1,137,866Goodwill
              
              $
              483,
    496
 
 As of
December 31, 2008, the Company has completed the process of valuing the acquired
assets and liabilities.  There were no material adjustments to the
initial allocation of the acquisition price as a result of the completion of
this process.
 
 The
following unaudited proforma information gives effect to the acquisition of the
minority interest as if such had been acquired on January 1,
2007.  The proforma information is not necessarily indicative of what
would have occurred had the acquisition been made on such date, nor is it
indicative of future results of operations.  The pro forma amounts
give effect to appropriate adjustments for the fair value of the acquired assets
and liabilities.
  Year
      End December 312008
                
                
                2007DescriptionNet
      Sales
                
                $
                44,237,984
                
                
                $
                16,685,690Pro
      forma operating expenses
                
                $
                4,809,373
                
                
                $
                3,565,646Pro
      forma net income
                
                $
                713,552
                
                
                $
                633,450Pro
      forma earnings per shareBasic
                
                $
                0.03
                
                
                $
                0.03Diluted
                
                $
                0.03
                
                
                $
                0.03
 The
historical financial statements of the Company prior to September 9, 2008
present its financial position, results of operations, and cash flows on a
combined basis.
 
 Pursuant
to a reverse acquisition between the Parent (formerly “Harry’s Trucking, Inc.”)
and Premier Power California that closed on September 9, 2008, the shareholders
of Premier Power California exchanged 100% of their interests for an aggregate
24,218,750 shares of the Parent’s common stock.
 F-7
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Subsequent
to the merger, the former shareholders of Premier Power California held
approximately 87% of the outstanding common stock of the Company. The merger was
considered to be a reverse acquisition accounted for as a recapitalization.
Premier Power California was considered to be the accounting acquirer and the
historical financial statements of the Company are those of Premier Power
California. The outstanding shares, members’ equity and earnings per share in
the historical financial statements have been restated to give effect to the
common shares issued to the controlling shareholders.
  In
connection with the reverse acquisition, the Company issued 3,500,000
units, consisting each of 1 share of Series A Convertible Preferred Stock, 1⁄2 of
a Series A Warrant, and 1⁄2 of a Series B Warrant in exchange for $5,511,845 in
net proceeds. Each 1 share of Series A Convertible Preferred Stock converts into
1 share of common stock. Each 1 Series A Warrant and 1 Series B Warrant entitles
the holder thereof to purchase one share of common stock at $2.50 and $3.00 per
share, respectively.
  2.
                SIGNIFICANT
      ACCOUNTING POLICIES
  Basis of Presentation - The
consolidated financial statements include the accounts of Premier Power
Renewable Energy, Inc. and its subsidiaries.  All significant
intercompany accounts and transactions have been eliminated.
  Use of Estimates - The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Significant estimates include the allowance for doubtful accounts, warranty
reserves, revenue recognition, the estimated useful life of property and
equipment, and income taxes. Accordingly, actual results could differ from those
estimates.
 
 Cash and Cash Equivalents -
Cash and cash equivalents include cash on hand or in the bank and short-term
investment securities with remaining maturities of 90 days or less at date of
purchase.
 
 The
Company maintains its cash in bank deposit accounts that, at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts. The Company had $5,129,335 and $1,600,061 in cash in bank
accounts at December 31, 2008 and December 31, 2007, respectively, in excess of
deposit insurance limits.
  Concentrations
and Credit Risk One customer accounted for
18% and two customers accounted for 12% each of our sales for the year
ended December 31, 2008. One
customer accounted for 16% of the Company’s revenues in
2007.Accounts receivable primarily consist of trade
receivables and amounts due from state agencies and utilities for rebates on
solar systems installed. At December 31, 2008, the Company had four customers
that accounted for 27%, 13%, 11%, and 10% of the Company’s accounts
receivables.   At December 31, 2007, two customers accounted for
49% and 22% of the Company’s accounts receivable. The Company monitors account
balances and follows up with accounts that are past due as defined in the terms
of the contract with the customer. To date, the Company’s losses on
uncollectible accounts receivable have been immaterial. The Company maintains an
allowance for doubtful accounts receivable based on the expected collectability
of its accounts receivable. The allowance for doubtful accounts is based on
assessments of the collectability of specific customer accounts and the aging of
the accounts receivable. If there is a deterioration of a major customer’s
credit worthiness or actual defaults are higher than historical experience, the
allowance for doubtful accounts is increased. The allowance for doubtful
accounts was $18,000 and $10,000 as of December 31, 2008 and December 31, 2007,
respectively.
  The
Company purchases its solar panels from a limited number of vendors, but
believes that in the event it is unable to purchase solar panels from these
vendors, alternative sources of solar panels will be available.
 
 Inventories - Inventories,
consisting primarily of raw materials, are recorded using the average cost
method and are carried at the lower of cost or market.
 F-8
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Property and Equipment -
Property and equipment with a value greater than $2,000 are recorded at cost and
depreciated using the straight-line method over estimated useful lives of 5
years, or in the case of leasehold improvements, the lease term, if shorter.
Maintenance and repairs are expensed as they occur.
 
 Revenue Recognition - Revenue
on photovoltaic system installation contracts is recognized using the percentage
of completion method of accounting. At the end of each period, the Company
measures the cost incurred on each project and compares the result against its
estimated total costs at completion. The percent of cost incurred determines the
amount of revenue to be recognized. Payment terms are generally defined by the
contract and as a result may not match the timing of the costs incurred by the
Company and the related recognition of revenue. Such differences are recorded as
costs and estimated earnings in excess of billings on uncompleted contracts or
billings in excess of costs and estimated earnings on uncompleted contracts. The
Company determines its customer’s credit worthiness at the time the order is
accepted. Sudden and unexpected changes in a customer’s financial condition
could put recoverability at risk.
 
 Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools,
repairs, and depreciation costs. Selling and general and administrative costs
are charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and estimated
profitability, including those arising from contract penalty provisions, and
final contract settlements may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Profit
incentives are included in revenues when their realization is reasonably
assured.
 
 Advertising - The Company
expenses advertising costs as they are incurred. Advertising costs were $413,251
and $415,622 for the years ended December 31, 2008 and 2007,
respectively.
 
 Product Warranties -Prior to
January 1, 2007, the Company provided a five year warranty covering the labor
and materials associated with its installations. Effective January 1, 2007, the
Company changed the coverage to generally be ten years in the U.S. and to one
year in Spain for all contracts signed after December 31, 2006. Solar panels and
inverters are warranted by the manufacturer for 25 years and 10 years,
respectively. Activity in the Company’s warranty reserve for the years ended
December 31, 2008 and 2007 was as follows:
  2008
              
              
              2007Balance
      at beginning of period
              
              $
              172,002
              
              
              $
              58,375Warranty
      expense
              
              
              275,108
              
              
              
              132,533Less:
      warranty claims
              
              
              (79,860
              )
              
              
              (18,906
              )Balance
      at end of period
              
              $
              367,250
              
              
              $
              172,002
  Foreign Currency- Premier
Power Spain’s functional currency is the Euro. Its assets and liabilities are
translated at year-end exchange rates, except for certain non-monetary balances,
which are translated at historical rates. All income and expense amounts of
Premier Power Spain are translated at average exchange rates for the respective
period. Translation gains and losses are not included in determining net income
but are accumulated in a separate component of shareholders’ equity. Foreign
currency transaction gains and losses are included in the determination of net
income (loss) in the period in which they occur. For the years ended December
31, 2008 and 2007, the foreign currency transaction loss was
$(159,898)  and $0, respectively.
 F-9
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Minority Interest– The
minority interest reflected in the balance sheets and statement of operations
represent the 49% shareholdings of the non-controlling shareholders in the
Company’s Spanish operations, Premier Power Spain. Concurrent with the reverse
merger, these shareholdings were converted into shares of the Company’s stock
and no longer reported as a minority interest effective September 9,
2008.
 
 Earnings per Share –Earnings
per share is computed in accordance with the provisions of SFAS No. 128, “Earnings Per Share.” Basic
net income (loss) per share is computed using the weighted-average number of
common shares outstanding during the period. Diluted earnings per share is
computed using the weighted-average number of common shares outstanding during
the period, as adjusted for the dilutive effect of the Company’s outstanding
convertible preferred shares using the “if converted” method and dilutive
potential common shares. For all of the periods presented, the Company had no
dilutive potential common shares except for outstanding convertible preferred
shares during the year ended December 31, 2008.  Warrants to purchase
3,500,000 of the Company’s common shares were excluded as their exercise price
exceeded the average market price of the Company’s common shares.
  2008
              
              
              2007Net
      income (loss)
              
              $
              569,068
              
              
              $
              843,865Earnings
      Per Share:Basic
              
              $
              0.03
              
              
              $
              0.04Diluted
              
              $
              0.02
              
              
              $
              0.04Weighted
      Average Shares Outstanding:Basic
              
              
              22,666,138
              
              
              
              21,159,451Diluted
      effect of convertible preferred stock
              
              
              1,083,562
              
              
              
              —Diluted
              
              
              23,749,700
              
              
              
              21,159,451
  On
December 19, 2008, our board of directors approved the Premier Power Renewable
Energy, Inc. 2008 Equity Incentive Plan (the “Plan”).  All of our
employees, officers, and directors, and those of our consultants who (i) are
natural persons and (ii) provide bona fide services to the Company not connected
to a capital raising transaction or the promotion or creation of a market for
our securities are eligible to be granted options or restricted stock awards
under the Plan.  In January 2009, the Company granted stock options
for 1,134,229 shares of its common stock to eligible persons.
  Comprehensive Income-Statement of Financial
Accounting Standards No. 130, “Reporting Comprehensive
Income,” establishes standards for reporting comprehensive income and its
components in a financial statement that is displayed with the same prominence
as other financial statements. Comprehensive income, as defined, includes all
changes in equity during the period from non-owner sources, such as foreign
currency translation adjustments.
  Income Taxes- The Company
accounts for income taxes under the liability method. Under this method,
deferred tax assets and liabilities are determined based on differences between
the financial reporting and tax reporting bases of assets and liabilities and
are measured using enacted tax rates and laws that are expected to be in effect
when the differences are expected to reverse. Realization of deferred tax assets
is dependent upon the weight of available evidence, including expected future
earnings. A valuation allowance is recognized if it is more likely than not that
some portion, or all of a deferred tax asset will not be realized.
 F-10
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Prior to
September 9, 2008, Premier Power California (a Subchapter S corporation) and
Bright Future (a limited liability company) were not subject to federal income
tax, but were subject to state income tax. For the year ended December 31, 2007,
the Company recorded $36,408 in state income tax expense for its U.S. entities.
From January 1, 2008 to September 8, 2008, the Company recorded $14,674 in state
income tax expense related to these entities. Subsequent to September 8, 2008
and in conjunction with the reverse acquisition, the Company and its U.S.
subsidiaries became subject to federal income taxes. In conjunction with the
conversion of Premier Power California and Bright Future to a C-corporation for
tax purposes, the Company recorded a net deferred tax asset of $485,864. The
majority of this benefit is attributable to changing the method of accounting
from the cash to accrual basis of accounting for tax purposes.  In
conjunction with the acquisition of the Spain minority interest, the Company
recorded a deferred tax liability of $333,000 resulting in an offsetting
increase to goodwill. The change in tax status did not result in a change in the
tax basis of the Company and its U.S. subsidiaries.
 
 Premier
Power Spain is organized under the laws of Spain and is subject to federal and
provincial taxes.
  Recently Issued Accounting
Pronouncements
 
 In
December 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“FAS”)  No. 157,
"Fair Value
Measurement" ("FAS 157"), which defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP) and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value
measurements.  This statement is effective for fiscal years beginning
after November 15, 2007, except for non-financial assets and liabilities
measured at fair value on a non-recurring basis for which the
effective date will be for fiscal years beginning after November 15,
2008.  The adoption of FAS 157 for financial assets and liabilities
did not have a material impact on the Company's consolidated financial
statements.  The adoption of FAS 157 for non-financial assets is not
expected to have a material impact on the Company’s consolidated financial
statements.
 
 In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option
for  Financial
Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115” (“FAS
159”), which permits entities to choose to measure many financial instruments
and certain other items at fair value at specified election dates. A business
entity is required to report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each subsequent reporting
date. This statement is expected to expand the use of fair value measurement.
FAS 159 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years, and is
applicable beginning in the first quarter of 2008. The adoption of FAS 159 did
not have a material effect on our results of operations, cash flows or financial
position.
 
 In
December 2007, the FASB issued FAS No. 141(R), “Business Combinations” (“FAS
141(R)”), which requires the acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination. FAS 141(R) is prospectively effective to business combinations for
which the acquisition is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The impact of FAS 141(R) on the
Company's consolidated financial statements will be determined in part by the
nature and timing of any future acquisition completed.
 
 In
December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements (as amended)” (“FAS 160”), which
improves the relevance, comparability, and transparency of financial information
provided to investors by requiring all entities to report noncontrolling
(minority) interests in subsidiaries in the same way as equity consolidated
financial statements. Moreover, FAS 160 eliminates the diversity that currently
exists in accounting from transactions between an entity and non-controlling
interests by requiring they be treated as equity transactions. FAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008; earlier adoption is
prohibited.
 F-11
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 In March
2008, the FASB issued FAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No.
133”  (“FAS 161”), which requires additional disclosures about
the objectives of the derivative instruments and hedging activities, the method
of accounting for such instruments under SFAS No. 133 and its related
interpretations, and a tabular disclosure of the effects of such instruments and
related hedged items on our financial position, financial performance, and cash
flows. FAS 161 is effective beginning January 1, 2009. We are currently
assessing the potential impact that adoption of FAS 161 may have on our
financial statements.
 
 In April
2008, the FASB issued FASB Staff Position (FSP) FAS No. 142-3, “Determination of the Useful Life of
Intangible Assets.” The FSP amends the factors an entity should consider
in developing renewal or extension assumptions used in determining the useful
life of recognized intangible assets under FAS No. 142, “Goodwill and Other Intangible
Assets.” The FSP must be applied prospectively to intangible assets
acquired after the effective date. The Company will apply the guidance of the
FSP to intangible assets acquired after January 1, 2009.
  In May
2008, the FASB issued FAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“FAS 162”), which identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America (the GAAP hierarchy). This statement is effective
November 15, 2008 which is 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments of AU Section 411, “The Meaning of Presents Fairly in
Conformity with Generally Accepted Accounting Principles.”  The
adoption of FAS 162 did not have a material effect on our financial
statements.
  F-12
 PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
  3.
              INTANGIBLE
      ASSETS
 
 Intangibles
consist of amortizing intangibles and goodwill. At December 31, 2008, such
amounts were as follows:
  Amortizing
      IntangiblesTrademark
                
                $
                865,106Employee
      contract
                
                
                157,086Backlog
                
                
                26,228Subtotal
                
                
                1,048,420Goodwill
                
                
                483,496Total
                
                $
                1,531,916
 There
were no intangible assets at December 31, 2007.  There were no
adjustments recorded to goodwill during the year ended December 31,
2008.  Amortization periods for the intangibles are as follows:
trademark - 17 years, employee contract - 2 years, backlog - 6 months.
Amortization for the year ended December 31, 2008 was $61,580. Accumulated
amortization was $61,580.
 
 4.
              PROPERTY
      AND EQUIPMENT
 
 Property
and equipment consists of the following as of December 31:
 
 2008
              
              
              2007Equipment
      and Computers
              
              $
              203,628
              
              
              $
              138,151Furniture
      and Fixtures
              
              
              59,194
              
              
              
              12,352Vehicles
              
              
              504,546
              
              
              
              338,663767,368
              
              
              
              489,166Less:
      Accumulated depreciation
              
              
              (292,463
              )
              
              
              (175,000
              )$
              474,905
              
              
              $
              314,166
 
 Depreciation
expense was $135,095 and $76,435 for the years ended December 31, 2008 and 2007,
respectively.
  5.
              ACCRUED
      LIABILITIES
 
 Accrued
liabilities consisted of the following as of December 31:
  2008
              
              
              2007Payroll
              
              $
              477,163
              
              
              $
              215,434Warranty
      reserve
              
              
              367,250
              
              
              
              172,002401K
      plan
              
              
              20,000
              
              
              
              60,000Sales
      taxes
              
              
              301,938
              
              
              
              24,020Workers
      compensation insurance
              
              
              20,000
              
              
              
              20,000Accrued
      subcontractors
              
              
              79,002
              
              
              
              —Other
      operational accruals
              
              
              102,665
              
              
              
              36,094Total
              
              $
              1,368,018
              
              
              $
              527,550
  F-13
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 6.
              BORROWINGS
 
 Borrowings
consist of notes payable and lines of credit.
 
 Notes
Payable
 
 Notes
payable were $130,718 and $241,388 at December 31, 2008 and December 31, 2007,
respectively. The notes are secured by vehicles and have maturities through
2014. The annual interest rates on the notes range from 1.9% to 6.6%. The future
principal payments on these notes as of December 31, 2008 are as
follows:
  2009
                
                $
                38,3112010
                
                
                25,4102011
                
                
                24,7372012
                
                
                24,2702013
                
                
                13,6412014
                
                
                4,349$
                130,718
  Line of
Credit
 
 In
February 2008, Premier Power California entered into a $3,000,000 line of credit
agreement (LOC) with Guaranty Bank, which expired on February 26, 2009 but was
renewed on February 26, 2009 under similar terms and conditions (see Note 12
below).  The line of credit is secured by the assets of Premier Power
California and personal guaranties issued by our Chairman and Chief Executive
Officer, Dean Marks; Sarilee Marks, the wife of Dean Marks; and Bright
Future.  The line of credit bears interest at the prime rate plus
1%.  At December 31, 2008, the interest rate was 6%.  During
the year ended December 31, 2008, the Company borrowed and repaid $1,250,000
under the LOC. At December 31, 2008, no amount was outstanding on the LOC. At
March 31, 2009, no amount was outstanding under the LOC.
 
 7.
              EQUITY
 
 Preferred
Stock
 
 The
Company has authorized 20,000,000 shares of preferred stock, par value $0.0001
per share (“Preferred Stock”). The Preferred Stock may be issued from time to
time in series having such designated preferences and rights, qualifications and
to such limitations as the Board of Directors may determine.
 
 The
Company has designated 5,000,000 shares of Preferred Stock as Series A
Convertible Preferred Stock (“Series A Stock”). The holders of Series A Stock
have no voting rights except with regards to certain corporate events, enjoys a
$2.40 liquidation preference per share, subject to adjustment, over holders of
common stock, and may convert each share of Series A Stock into one share of
common stock at any time. Series A stock converts automatically upon the
occurrence of an offering meeting certain criteria. Holders of the Series A
Stock have certain redemption rights.  The Company has determined that
the events triggering such rights are either in control of the Company or in the
case of such events where the Company is not deemed to exercise control; the
redemption right is limited to the ability to convert into shares of the
Company’s common stock.  As of December 31, 2008, there were
3,500,000 shares of Series A Stock outstanding.
 F-14
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Warrants
 
 In
September 2008, the Company issued Series A Warrants and Series B Warrants to
purchase 1,750,000 and 1,750,000 shares of common stock, respectively, in
connection with the issuance of Series A Stock.  Both the Series A and
B Warrants have four year lives. The Company has the right to call for
cancellation of each outstanding Series A Warrant or Series B Warrant under
certain circumstances. The Series A Warrants have an exercise price of $2.50 and
a fair value of $.15 per warrant. The Series B Warrants have an exercise price
of $3.00 and a fair value of $.13 per warrant.
 
 The
significant assumptions used to determine the fair values of the warrants, are
as follows:
 
 Risk-free
      interest rate at grant date
              
              
              4.5
              %Expected
      stock price volatility
              
              
              95
              %Expected
      dividend payout
              
              
              —Expected
      option life-years
              
              4
      yrs
 
 In
September 2008, the Company issued 3,500,000 units, consisting each of 1 share
of Preferred Stock, 1⁄2 of a Series A Warrant, and 1⁄2 of a Series B Warrant in
exchange for $7,000,000 in gross proceeds.  The fair value of the
preferred stock was calculated based on the estimated fair value and underlying
number of common shares it would convert into at the time of the transaction.
The estimated fair value of our common stock on the transaction date was $.42
per share, and the preferred stock would have converted into 3,500,000 common
shares, thus deriving a fair value of $1,470,000 for the underlying common
shares.
 
 Based on
the relative fair values of the preferred stock and the warrants, we allocated
$5,206,013 and $1,793,987 of the $7,000,000 proceeds, before issuance costs, to
the preferred stock and warrants, respectively.
 
 8.
              INCOME
      TAX
 
 The
domestic and foreign components of income before income tax expense were as
follows:
  December 31, 2008
              
              
              December 31, 2007Domestic
              
              $
              123,552
              
              
              $
              822,009Foreign
              
              $
              628,974
              
              
              $
              45,182Total
              
              $
              752,526
              
              
              $
              867,191
 F-15
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
  For the
year ended December 31, 2008, the decrease in income tax expense was due to the
conversion to a C-Corporation status in September 2008 and related deferred tax
assets of $485,864 recorded as a result of the conversion for the U.S. reporting
entities offset by an increase in foreign tax expense.
  Year
      EndDecember
      31,
                  2008
                
                
                December
      31,
                  2007CurrentFederal
                
                $
                32,672
                
                
                $
                —State
                
                
                3,310
                
                
                
                36,408Foreign
                
                
                141,718
                
                
                
                3,465Subtotal
                
                $
                177,700
                
                
                $
                39,873DeferredFederal
                
                $
                (153,146
                )
                
                $
                —State
                
                
                (40,539
                )
                
                
                —Foreign
                
                
                (24,872
                )
                
                
                —Subtotal
                
                
                (218,557
                )
                
                
                —Total
      Provision
                
                $
                (40,857
                )
                
                $
                39,873
  The
income tax provision (benefit) differs from the amounts obtained by applying the
statutory U.S. federal tax rate to income (loss) before taxes.  Please
see the table below.
  Year
      EndDecember
      31,
                  2008
                
                
                December
      31,
                  2007Tax
      provision (benefit) at U.S. statutory rate
                
                $
                305,714
                
                
                $
                —State
      income taxes, net of federal benefit
                
                
                (24,571
                )
                
                
                36,408Foreign
      income and withholding taxes
                
                
                121,881
                
                
                
                3,465Effect
      of change in statutory tax rates on deferred taxes
                
                
                (443,881
                )
                
                
                —Total
                
                $
                (40,857
                )
                
                $
                39,873
 Prior to
the conversion of the S-corporations to C-corporations for U.S. federal tax
purposes, during the quarter ended December 31, 2008, all income and losses
from the operations of the Company generally flowed through to its
shareholders.  The Company was not subject to U.S. federal income
taxes at the corporate level and was only subject to state income
taxes.  Since the Company operated as an S-corporation prior to
September 9, 2008,  the U.S. statutory rate was 0%.  As a
result of the change in tax reporting status, the effective tax rate for U.S.
purposes for the year ended December 31, 2008 has been adjusted to account for
the zero rate for the income or deductions during the majority of the
year.  The Company recorded a deferred tax benefit of approximately
$200,000 during the quarter ended December 31, 2008 due to the effect of the
change in statutory tax rates on its deferred tax assets.
 F-16
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 Temporary
differences and carry forwards, which give rise to significant portions of
deferred tax assets and liabilities, are as follows:
  December
      31, 2008Accruals
      and reserves
              
              $
              227,710Other
              
              
              1,125Gross
      deferred tax assets
              
              
              228,835Fixed
      assets
              
              
              (28,753
              )Intangible
      assets
              
              
              (314,526
              )Gross
      deferred tax liability
              
              
              (343,279
              )Net
      deferred tax liability
              
              $
              (114,444
              )
 
 The
Company has not provided U.S. taxes or foreign withholding taxes on
approximately $660,000 of foreign earnings.  If these earnings were
distributed to the United States in the form of dividends or otherwise, or if
the shares of the relevant foreign subsidiary were sold or transferred, the
Company would be subject to additional U.S. income taxes (subject to an
adjustment for foreign tax credits) and foreign withholding
taxes.  The Company intends to permanently reinvest these
earnings.
  The
following unaudited pro forma information gives effect as if Premier Power
California and Bright Future previously operated as C-corporations for each of
the years ended December 31, 2008 and 2007. The pro forma data below shows the
estimated effect of income taxes on net income and earnings per share for
periods prior to becoming a taxable corporation.
  For
      the Year Ended2008
                        
                        
                        2007Pro
      Forma DisclosuresIncome
      before income taxes
                        
                        $
                        752,526
                        
                        
                        $
                        867,191Income
      tax expense
                        
                        
                        (233,344
                        )
                        
                        
                        (343,767
                        )Minority
      interest
                        
                        
                        (224,315
                        )
                        
                        
                        16,547Net
      income
                        
                        $
                        294,867
                        
                        
                        $
                        539,971Earnings
      per share:Basic
                        
                        $
                        0.01
                        
                        
                        $
                        0.03Diluted
                        
                        $
                        0.01
                        
                        
                        $
                        0.03
 Effective
September 8, 2008, the Company adopted Financial Accounting Standards Board
Interpretation, or FIN No. 48, “Accounting for Uncertainty in Income
Taxes–an interpretation of FASB Statement
No. 109” (FIN 48). FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
uncertain tax positions taken or expected to be taken in a company’s income tax
return, and also provides guidance on derecognition, classification, interest
and penalties, accounting in interim periods, disclosure, and
transition.
 
 As a
result of the implementation of FIN 48, the Company recognized no change in the
liability for unrecognized tax benefits related to tax positions taken in prior
periods, and no corresponding change in retained earnings.
  F-17
 PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
  As a
result of the implementation of FIN 48, the Company recognized no material
adjustment in the liability for unrecognized income tax benefits as of the
September 2008 adoption date and at December 31, 2008. Also, the Company had no
amounts of unrecognized tax benefits that, if recognized, would affect its
effective tax rate.
 
 The
Company’s policy for deducting interest and penalties is to treat interest as
interest expense and penalties as taxes. As of December 31, 2008, the Company
had no amount accrued for the payment of interest and penalties related to
unrecognized tax benefits and no amounts were recorded as of the adoption date
of FIN 48.
 
 The
Company files income tax returns in the U.S. federal, California and foreign
jurisdictions.  Tax years 2004 through 2008 remain open in most tax
jurisdictions. For federal and California purposes, prior to September 9, 2008,
the Company filed as an S-corporation and income tax liabilities and
uncertain tax positions are attributable to the S-corporation shareholders
during those years.
  9.
              COMMITMENTS
      AND CONTINGENCIES
 
 Premier
Power Spain is party to a non-cancelable lease for operating facilities in
Madrid, Spain, which expires in 2013, and a non-cancelable lease for operating
facilities in Navarra, Spain, which expires in 2012.  Premier Power
California is party to a non-cancelable lease for operating facilities in
Redlands, California, which expires in 2010.  These leases provide for
annual rent increases tied to the Consumer Price Index. The leases require the
following payments as of December 31, 2008, subject to annual adjustment, if
any:
 
 2009
                  
                  $
                  78,0032010
                  
                  
                  43,8452011
                  
                  
                  43,8452012
                  
                  
                  35,3192013
                  
                  
                  23,293Total
                  
                  $
                  224,305
 
 10.
              EMPLOYEE
      BENEFITS
 
 Premier
Power Renewable Energy, Inc. has a 401(k) plan (the Plan) for its employees.
Employees are eligible to make contributions when they attain an age of
twenty-one and have completed at least one year of service. Premier Power makes
discretionary matching contributions to employees who qualify for the Plan and
were employed on the last day of the Plan year. Such contributions totaled
$20,000 and $60,000 for the year ended December 30, 2008 and 2007, respectively.
Employees are vested 100% after 3 years of service. Neither Bright Future nor
Premier Power Spain offer defined contribution or defined
benefit  plans to their employees.
 
 11.
              RELATED
      PARTIES TRANSACTION
 
 The
Company’s CEO and controlling shareholder of the Company is a guarantor of the
Company’s line of credit with Guaranty Bank. Prior to the reverse merger,
Premier Power California made distributions to its members to cover their
estimated tax liabilities on their deemed portion of its income. These
distributions are based on the Company's best estimates and available
information, and may be revised at a later date. Such revisions may result in a
portion of previously made distributions being refunded to the Company. The
balance of $23,458 was recorded as due from shareholders at December 31, 2007
and represents payments made to a member of Premier Power California in excess
of the member’s actual tax liability. Such amounts were repaid on June 30, 2008.
Due to the nature of the receivable and its short duration, it was not interest
bearing or collateralized.
 F-18
  PREMIER
POWER RENEWABLE ENERGY, INC.
 Notes
to Consolidated Financial Statements
 12.
              SUBSEQUENT
      EVENTS


Effective
February 26, 2009, Premier Power California extended its existing $3,000,000
line of credit with Guaranty Bank to May 27, 2009.  The line of credit
is secured by the assets of Premier Power California and personal guaranties
issued by our Chairman and Chief Executive Officer, Dean Marks; Sarilee Marks,
the wife of Dean Marks; and Bright Future.  As of March 31, 2009,
there were no amounts outstanding under our agreement with Guaranty
Bank.


F-19




ITEM
      9.
            CHANGES IN AND
      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE





There
have been no changes in or disagreements with our independent auditors, Macias
Gini & O’Connell LLP.




ITEM
      9A.
            CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures
 
 Regulations
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
require public companies to maintain “disclosure controls and procedures,” which
are defined to mean a company’s controls and other procedures that are designed
to ensure that information required to be disclosed in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized, and
reported, within the time periods specified in the SEC’s rules and
forms.  Our Chief Executive Officer and Chief Financial Officer
carried out an evaluation of the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report.  Based
on those evaluations, as of December 31, 2008, our CEO and CFO believe
that:
 
 (i)
                our
      disclosure controls and procedures are designed to ensure that information
      required to be disclosed by us in the reports we file under the Exchange
      Act 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 our management, including the CEO and
      CFO, as appropriate, to allow timely decisions regarding required
      disclosure; and
 
 (ii)
                our
      disclosure controls and procedures are
  effective.


Internal
Control over Financial Reporting





(a)           Management’s
annual report on internal control over financial reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated
under the Exchange Act as a process designed by, or under the supervision of,
the Company’s principal executive officer and principal financial officer and
effected by the Company’s board of directors, management, and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:





·
              Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;





·
              Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the Company
      are being made only in accordance with authorizations of management and
      directors of the Company; and





·
              Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, the Company’s internal control over financial
reporting may not prevent or detect misstatements.  Therefore, even
those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and
presentation.  Projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.




Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2008.  In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated
Framework.  Based on our assessment, management concluded that,
as of December 31, 2008, the following significant deficiency
existed:


·
                Expanded
      Financial Reporting Resources:  The Company has limited finance
      and accounting resources.  The Company needs to recruit, develop
      or contract for such additional resources to ensure that it is able to
      comply with its financial reporting obligations in an accurate and timely
      manner.
 
 This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only the
management's report in this annual report.




25




(b)           Changes in
internal control over financial reporting





There
were changes in our internal control over financial reporting identified in
connection with the evaluation required by Rule 13a-15(d) or
Rule15d-15(d) promulgated under the Exchange Act that occurred during our
fourth fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.  The
Company implemented a formal process for preparing and controlling journal
entries to prevent processing erroneous or unauthorized entries by restricting
preparation of monthly journal entries to certain authorized personnel;
implementing a system of sequential numbering and numeric accounting of each
journal entry; implementing a system of attaching supporting documentation to
each journal entry; and implementing a system of independent review of each
journal entry.




ITEM
      9B.
            OTHER
      INFORMATION





None.




26




PART
      III




ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




Current
Management




Our
directors and executive officers, their ages, their respective offices and
positions, and their respective dates of election or appointment are as
follows:





Name
            
            Age
            
            Position
      Held
            
            Officer/Director
      sinceDean
      R. Marks
            
            52
            
            Chairman
      of the Board, President, and Chief Executive Officer
            
            September
      9, 2008Miguel
      de Anquin
            
            41
            
            Chief
      Operating Officer, Corporate Secretary, and Director
            
            September  9,
      2008Teresa
      Kelley
            
            43
            
            Chief
      Financial Officer
            
            October
      24, 2008Kevin
      Murray
            
            59
            
            Director
            
            December
      8, 2008Robert
      Medearis
            
            76
            
            Director
            
            December
      8, 2008Tommy
      Ross
            
            55
            
            Director
            
            March
      18, 2009




Business
Experience Descriptions





Set forth
below is a summary of our executive officers’ and directors’ business experience
for the past 5 years.





Dean R. Marks – Chairman of
the Board, President, and Chief Executive Officer





Dean R.
Marks has been a key player in the solar sector since the early 1980's. In 1984,
Mr. Marks established a solar sales organization with over 2,000 employees in
over 26 markets across the nation. Since that time, Mr. Marks has pioneered
multiple applications of solar energy in the residential, commercial, and
industrial market. As President and CEO of Premier Power California since 2001,
he built Premier Power California into one of the most stable market leaders in
the industry. Mr. Marks has overseen Premier Power California’s expansion from
residential to commercial, agricultural, and industrial markets as well as
international expansion. Under Mr. Marks leadership, Premier Power California
has distinguished itself from the competition by developing a number of
innovative and propriety installation systems in use today. Mr. Marks has served
on the California Solar Energy Industry Association (CALSEIA) board and has been
an active participant in the solar industry for over 20 years. He has
co-authored several preeminent papers promoting renewable energy. Mr. Marks
holds a Bachelor of Science degree from Auburn University, with special emphasis
in Environmental Science.





Miguel de Anquin – Director,
Chief Operating Officer, and Corporate Secretary





Miguel de
Anquin serves as Executive Vice President and President of World Wide Sales at
Premier Power California since 2001. In his role at Premier Power California,
Mr. de Anquin achieved company success in growing sales and profits. An
accomplished corporate strategist, his strategic approach to building a business
is reflected in his work as Director of Marketing for Nordic Information System
and Next Information System. He was a Technology Advisor for General Electric
and IBM and he developed the data security auditing system for Bank of America.
At Premier Power California, Mr. de Anquin’s understanding of international
opportunities, his vision and expertise in business performance have driven
notable enterprise wide growth. Mr. de Anquin led Premier Power California’s
expansion into international markets, and he has increased Premier Power
California's profitability through brand revitalization that included major
shifts in brand strategy, operations, marketing communications, and sales
tactics. He has focused Premier Power California on data driven decision making
processes that have separated Premier Power California from its competitors. He
holds a Masters in Business Administration from the University of California at
Davis and a Bachelor of Science degree in Computer Science from the Universidad
de Belgrano in Buenos Aires, Argentina.





Teresa Kelley – Chief
Financial Officer





Ms.
Kelley was appointed Chief Financial Officer of the Company on October 24, 2008.
Ms. Kelley has over 22 years of experience in corporate accounting and
operations management. Prior to joining the Company, she served as Chief
Financial Officer of Vista Point Technologies, a design and manufacturer of
electronic components, since January 2007. Prior to working at Vista Point
Technologies, from 1987 to January 2007, Ms. Kelley worked at Intel Corporation
where she started as a financial analyst and later served in several management
positions before becoming the Senior Controller of the Intel Networking
business. Ms. Kelley has a B.S. in Business and an MBA from Santa Clara
University.




27




Kevin Murray –
Director





Mr.
Murray was elected to the board of directors on December 18, 2008.  He
is currently a Senior Vice President at the William Morris Agency (“WMA”),
working primarily in its corporate consulting division, a position he has held
since re-joining WMA in 2007 after serving twelve years in the California State
Legislature.  From 1998 to 2006, Mr. Murray was a Senator in the
California State Senate.  Concurrent to his directorship with the
Company, Mr. Murray sits on the board of the Federal Home Loan Bank of San
Francisco.  Mr. Murray graduated from California State University,
Northridge with a degree in business administration and accounting and holds a
Masters of Business Administration from Loyola Marymount University and a Juris
Doctorate from Loyola Law School.





Robert Medearis –
Director





Mr.
Medearis was elected to the board of directors on December 18, 2008. He is
currently retired as a management consultant and professor, and has been for the
past 5 years, but he sits on the board of several private companies, including
Solaicx, Inc., Geographic Expeditions, and Visual Network Design Inc., and the
non-profit organization Freedom From Hunger. Mr. Medearis graduated from
Stanford University with a degree in civil engineering and holds a Masters of
Business Administration from the Harvard Graduate School of Business
Administration.




Tommy Ross –
Director





Mr. Ross
was elected to the board of directors on March 18, 2009.  He is currently
the President and Chief Executive Officer of Pinnacle Strategic Group, a
business and political consulting firm.  From 2003 to 2008, he was employed
at Southern California Edison, at which he served as Vice President of Public
Affairs from 2007 to 2008.  Mr. Ross’ experience in the political arena
also include holding positions to which he was appointed by California Governor
Arnold Schwarzenegger, former California Governor Pete Wilson, and former
California Governor Jerry Brown.  He is the former Chairman and founding
member of the California African American Political Action Committee, a Lincoln
Fellow at The Claremont Institute, and the founder, Chairman and President of
The Research and Policy Institute of California.  Mr. Ross graduated from
Claremont Men’s College with a degree in political
science.




Family
Relationships




There
are no family relationships among our directors and executive
officers.




Involvement
in Certain Legal Proceedings





None of
our directors or executive officers has, during the past five
years:




·
              Had
      any petition under the federal bankruptcy laws or any state insolvency law
      filed by or against, or had a receiver, fiscal agent, or similar officer
      appointed by a court for the business or property of such person, or any
      partnership in which he was a general partner at or within two years
      before the time of such filing, or any corporation or business association
      of which he was an executive officer at or within two years before the
      time of such filing;




·
              Been
      convicted in a criminal proceeding or a named subject of a pending
      criminal proceeding (excluding traffic violations and other minor
      offenses);




·
              Been
      the subject of any order, judgment, or decree, not subsequently reversed,
      suspended, or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining him from, or otherwise limiting, the following
      activities:




(i)
              Acting
      as a futures commission merchant, introducing broker, commodity trading
      advisor, commodity pool operator, floor broker, leverage transaction
      merchant, any other person regulated by the Commodity Futures Trading
      Commission, or an associated person of any of the foregoing, or as an
      investment adviser, underwriter, broker or dealer in securities, or as an
      affiliated person, director or employee of any investment company, bank,
      savings and loan association or insurance company, or engaging in or
      continuing any conduct or practice in connection with such activity;




(ii)
              Engaging
      in any type of business practice; or




(iii)
              Engaging
      in any activity in connection with the purchase or sale of any security or
      commodity or in connection with any violation of federal or state
      securities laws or federal commodities
laws;


·
                Been the subject of any order, judgment, or decree, not
      subsequently reversed, suspended, or vacated, of any federal or state
      authority barring, suspending, or otherwise limiting for more than 60 days
      the right of such person to engage in any activity described in (i) above,
      or to be associated with persons engaged in any such activity;
  ·
                Been
      found by a court of competent jurisdiction in a civil action or by the SEC
      to have violated any federal or state securities law, where the judgment
      in such civil action or finding by the SEC has not been subsequently
      reversed, suspended, or vacated;
  or
  ·
                Been
      found by a court of competent jurisdiction in a civil action or by the
      Commodity Futures Trading Commission to have violated any federal
      commodities law, where the judgment in such civil action or finding by the
      Commodity Futures Trading Commission has not been subsequently reversed,
      suspended, or vacated.




28




Compliance
with Section 16(a) of the Securities Exchange Act of 1934





Our
executive officers, directors, and persons who beneficially own more than 10% of
a registered class of our equity securities are not currently subject to Section
16(a) of the Exchange Act.





Code
of Ethics




We have
adopted a Code of Business Conduct and Ethics that applies to our executive
officers, directors, and employees, a copy of which was filed with the SEC as
Exhibit 14.1 to our Registration Statement on Form S-1 on November 7,
2008.





Recommendation
of Nominees to the Board





There
were no changes to the procedures by which our stockholders may recommend
nominees to our board of directors.





Audit
Committee; Audit Committee Financial Expert





We formed
an audit committee of our board of directors on March 18, 2009.  The
charter for such committee was adopted by the board on December 19,
2008.  The members of our audit committee are Kevin Murray, Robert
Medearis, and Tommy Ross.  The board of directors has determined that Mr.
Medearis is an “audit committee financial expert” as defined by SEC rules, and
he is an independent member of the board as defined by the SEC and the Nasdaq
Capital Market.








ITEM
      11.
            EXECUTIVE
      COMPENSATION




The following summary compensation table indicates the
cash and non-cash compensation earned during the years ended December 31,
2008, 2007, and 2006 by (i) our Chief Executive Officer (principal executive
officer), (ii) our Chief Financial Officer (principal financial officer), (iii)
the three most highly compensated executive officers other than our CEO and CFO
who were serving as executive officers at the end of our last completed fiscal
year, whose total compensation exceeded $100,000 during such fiscal year ends,
and (iv) up to two additional individuals for whom disclosure would have been
provided but for the fact that the individual was not serving as an executive
officer at the end of our last completed fiscal year, whose total compensation
exceeded $100,000 during such fiscal year ends.





SUMMARY COMPENSATION
      TABLEName
      and Principal
              Position
            
            Year
            
            Salary
              ($)
            
            
            Bonus
              ($)
            
            
            Stock
              Awards
              (
      $)
            
            
            Option
              Awards
              ($)
            
            
            Non-
              Equity
              Incentive
              Plan
              Compensation
              ($)
            
            
            Non-
              qualified
              Deferred
              Compensation
              Earnings
              ($)
            
            
            All
      Other
              Compensation
              (
      $)
            
            
            Total
              ($)Dean
      R. Marks,
            
            2008
            
            $
            158,077
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            158,077Chairman,
      President,
            
            2007
            
            $
            159,466
            
            
            $
            1,344
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            9,322
            (1)
            
            $
            170,132and
      CEO
            
            2006
            
            $
            122,308
            
            
            $
            6,000
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            6,009
            (2)
            
            $
            134,317Miguel
      de Anquin,
            
            2008
            
            $
            153,462
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            153,462COO,
      Secretary,
            
            2007
            
            $
            126,624
            
            
            $
            1,344
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            8,037
            (3)
            
            $
            136,005and
      director
            
            2006
            
            $
            120,000
            
            
            $
            6,000
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            5,902
            (4)
            
            $
            131,902Teresa
      Kelley,
            
            2008
            
            $
            25,962
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            25,962CFO
      (5)
            
            2007
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —2006
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —


(1)
              This
      amount represents compensation earned under the 401(k)
    Plan.
 
 (2)
              This
      amount is comprised of the following: (a) $50 as the dollar amount
      recognized for life insurance premiums paid for the named executive
      officer, and (b) $5,959 as compensation earned under the 401(k)
      Plan.
 
 (3)
              This
      amount represents the following: (a) $67 as the dollar amount recognized
      for life insurance premiums paid for the named executive officer, and (b)
      $7,970 as compensation earned under the 401(k)
  Plan.
 
 (4)
              This
      amount is comprised of the following: (a) $50 as the dollar amount
      recognized for life insurance premiums paid for the named executive
      officer, and (b) $5,852 as compensation earned under the 401(k)
      Plan.
 
 (5)
              Ms.
      Kelley was appointed as our Chief Financial Officer on October 24,
      2008.




29





Grants
of Plan-Based Awards





We made
no grants of an award to a named executive officer during the year ended
December 31, 2008 under any plan.





Employment
Agreements





The
following are summaries of our employment agreements with our executive
officers.




The
Company entered into an Employment Agreement with Teresa Kelley on October 24,
2008 for her services as Chief Financial Officer. Ms. Kelley’s annual
compensation is $150,000. She will receive an annual 20% bonus based on her
efforts in helping the Company achieve the following targets: minimum growth
revenue of 80% in the first year of her employment, 80% growth in the second
year, 70% growth in the third year, and 60% growth in the fourth year (each
growth revenue percentage which may be revised by the Company’s Chief Executive
Officer over the term of Ms. Kelley’s office); annual EBITDA and net income in
excess of the prior year’s EBIDTA and net income; net income margins in excess
of 5%; and acquisitions to secure revenue growth, margin growth, and market
share domestically and internationally. These goals are closely monitored by the
Chief Executive Officer and Board of Directors, and Ms. Kelley’s efforts will be
measured by quarterly and annual performance evaluations by the Chief Executive
Officer and Chief Operating Officer, except that Ms. Kelley’s efforts at helping
the Company acquire other businesses will be measured quarterly by the Board of
Directors, which will review her reports analyzing potential acquisitions. Ms.
Kelley will also receive, for her first year of employment, 100,000 stock
options to purchase the Company’s common stock, exercisable at a price equal to
the closing price of the Company’s common stock on the day the Board approves
the option issuance. Such stock options will vest 25% per year for each year of
employment from the date of issue. For her second year of employment, Ms. Kelley
will receive an additional 125,000 stock options to purchase the Company’s
common stock, exercisable at a price equal to the closing price of the Company’s
common stock on the day the Board approves the stock issuance. Such stock
options will vest 33% per year for each year of employment from the date of
issue. In the event of any sale, merger, acquisition of over 51% of the
Company’s capital stock by a third party, or other change of control event, any
stock options issued to Ms. Kelley under the Employment Agreement will be fully
vested for such year.  If the Company terminates Ms. Kelley without
cause after January 22, 2009, she is entitled to a 6 months’ severance
payment.





The
following are summaries of Premier Power California’s employment agreements
with its executive officers.





Premier
Power California entered into an Employment Agreement with Dean R. Marks on
August 22, 2008 for his services as its President and Chief Executive Officer.
Mr. Marks’ total annual salary is $180,000, and he is to receive additional
compensation in the form of, and based on, the following: (i) 0.5% of Premier
Power California’s annual earnings before interest, taxes, depreciation, and
amortization (“EBITDA”) in excess of $200,000 if Premier Power California’s
annual EBITDA margin is less than 5%, and (ii) 1.5% of Premier Power
California’s annual EBITDA in excess of $200,000 if Premier Power California’s
annual EBITDA margin is greater than 5%, both forms of additional compensation
of which is due to Mr. Marks within 90 days of Premier Power California’s fiscal
year-end and which payments will be accelerated upon a sale of Premier Power
California, merger involving Premier Power California, or public offering of
Premier Power California’s securities. Mr. Marks is entitled to a severance
payment of $180,000 upon termination by Premier Power California without cause
if such termination occurs between December 31, 2008 and December 31, 2010, and
a severance payment of $90,000 upon termination by Premier Power California
without cause if such termination occurs between December 31, 2010 and the
expiration of the agreement.  The term of the agreement is for five
years. On August 22, 2008, Mr. Marks also entered into a Non-Disclosure and
Non-Competition Agreement with Premier Power California in connection with his
employment.





Premier
Power California entered into an Employment Agreement with Miguel de Anquin on
August 22, 2008 for his services as its Executive Vice President of Worldwide
Operations. Mr. de Anquin’s total annual salary is $180,000, and he is to
receive additional compensation in the form of, and based on, the following: (i)
0.5% of Premier Power California’s annual EBITDA in excess of $200,000 if
Premier Power California’s annual EBITDA margin is less than 5%, and (ii) 1.5%
of Premier Power California’s annual EBITDA in excess of $200,000 if Premier
Power California’s annual EBITDA margin is greater than 5%, both forms of
additional compensation of which is due to Mr. de Anquin within 90 days of
Premier Power California’s fiscal year-end and which payments will be
accelerated upon a sale of Premier Power California, merger involving Premier
Power California, or public offering of Premier Power California’s securities.
Mr. de Anquin is entitled to a severance payment of $180,000 upon termination by
Premier Power California without cause if such termination occurs between
December 31, 2008 and December 31, 2010, and a severance payment of $90,000 upon
termination by Premier Power California without cause if such termination occurs
between December 31, 2010 and the expiration of the agreement. The term of the
agreement is for five years. On August 22, 2008, Mr. de Anquin also entered into
a Non-Disclosure and Non-Competition Agreement with Premier Power California in
connection with his employment.




30




Outstanding
Equity Awards





There are
no unexercised options, stock that has not vested, or equity incentive plan
awards for any of our named executive officers outstanding as of December 31,
2008.





Director
Compensation





The
following table provides compensation information for our directors during the
fiscal year ended December 31, 2008:




Name
              
              Fees
                Earned or
                Paid in
                Cash ($)
              
              
              Stock
                Awards ($)
              
              
              Option
                Awards ($) (1)
              
              
              Non-Equity
                Incentive Plan
                Compensation  
      ($)
              
              
              Non-Qualified
                Deferred
                Compensation
                Earnings ($)
              
              
              All Other
                Compensation  
      ($)
              
              
              Total ($)Dean
      Marks (2)
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―Miguel
      de Anquin (2)
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―Kevin
      Murray
              
              $
              2,500
              
              
              $
              ―
              
              
              $
              
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              2,500Robert
      Medearis
              
              $
              2,500
              
              
              $
              ―
              
              
              $
              
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              ―
              
              
              $
              2,500







(1)
            Reflects
      dollar amount expensed by the Company during applicable fiscal year for
      financial statement reporting purposes pursuant to FAS
      123R.  FAS 123R requires the Company to determine the overall
      value of the options as of the date of grant, and to then expense that
      value over the service period over which the options become exercisable
      (vested).  As a general rule, for time in service based options,
      the Company will immediately expense any option or portion thereof which
      is vested upon grant, while expensing the balance on a pro rata basis over
      the remaining vesting term of the
option.





(2)
            This
      individual’s compensation as a director is reflected in the table above
      titled “Summary Compensation
Table.”




On
December 19, 2008, the Company entered into an Amended and Restated Agreement to
Serve as Member of the Board of Directors (the “Murray Agreement”) with Kevin
Murray for his services as director.  Pursuant to the terms of the
Murray Agreement, Mr. Murray agreed to serve on the Board until October 15,
2011, such term being subject to re-election at our subsequent annual meeting of
shareholders.  Mr. Murray is required to attend at least two Board
meetings via teleconference and at least two Board meetings in person per year,
and he will be compensated for his services to the Board with $1,250 for each
Board meeting he attends via teleconference and $2,500 for each Board meeting he
attends in person.  Mr. Murray will also receive 50,000 shares of the
our common stock, par value $0.0001 per share (“Common Stock”), according to the
following schedule: (i) 16,500 common stock shares after the first year of
service on the Board, which shares will be issued to Mr. Murray even if the our
shareholders fail to re-elect Mr. Murray at the first annual meeting of
shareholders following Mr. Murray’s election to the Board, (ii) 16,500 common
stock shares after the second year of service on the Board, and (iii) 17,000
common stock shares after the third year of service on the Board.





On
December 19, 2008, the Company entered into an Amended and Restated
Agreement to Serve as Member of the Board of Directors (the “Medearis
Agreement”) with Robert Medearis for his services as a
director.  Pursuant to the terms of the Medearis Agreement, Mr.
Medearis agreed to serve on the Board until October 15, 2011, such term being
subject to his re-election at the our subsequent annual meeting of
shareholders.  Mr. Medearis is required to attend at least two Board
meetings via teleconference and at least two Board meetings in person per
year.  The Medearis Agreement further provides that Andrew Hargadon
may attend up to 50% of the our Board meetings as Mr. Medearis’ designee,
provided, however, that Mr. Medearis agreed that he would not delegate to Mr.
Hargadon, and that he would personally perform, any and all of his business
managerial duties and obligations as a director for the Company, including but
not limited to any director voting decisions regarding the Company and its
business.  Mr. Medearis will be compensated for his services with
$1,250 for each Board meeting he attends via teleconference and $2,500 for each
Board meeting he attends in person.  Mr. Medearis will also receive
50,000 shares of common stock according to the following schedule: (i) 16,500
common stock shares after the first year of service on the Board, which shares
will be issued to Mr. Medearis even if our shareholders fail to re-elect Mr.
Medearis to the Board at the first annual meeting of shareholders following Mr.
Medearis’ election to the Board, (ii) 16,500 common stock shares after the
second year of service on the Board, and (iii) 17,000 common stock shares after
the third year of service on the Board.





31





ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




Securities
Authorized for Issuance under Equity Compensation Plans or Individual
Compensation Arrangements





Please see the section titled “Securities
Authorized for Issuance under Equity Compensation Plans” under Item 5
above.





Security
Ownership of Certain Beneficial Owners and Management




The
following table sets forth information regarding the beneficial ownership of our
common stock as of March 30, 2009 for each of our directors and officers; all
directors and officers as a group; and each person known by us to beneficially
own five percent or more of our common stock.




Beneficial
ownership is determined in accordance with SEC rules.  Unless
otherwise indicated in the table, the persons and entities named in the table
have sole voting and sole investment power with respect to the shares set forth
opposite the shareholder’s name.  Unless otherwise indicated, the
address of each beneficial owner listed below is 4961 Windplay Drive, Suite 100,
El Dorado Hills, California 95762.





Name of Beneficial Owner and
      Address
            
            Number of
      Shares of
              Common Stock
      Beneficially
              Owned
(1)
            
            
            Percent of Sharesof
              Common Stock
              Beneficially Owned(1)
      (2)Executive
      Officers and/or Directors:Dean
      R. Marks
            
            
            11,234,215
            
            
            
            43.1
            %Miguel
      de Anquin
            
            
            6,744,638
            
            
            
            25.9
            %Teresa
      Kelley
            
            
            0
            
            
            
            *Kevin
      Murray
            
            
            0
            
            
            
            *Robert
      Medearis
            
            
            0
            
            
            
            *Tommy
      Ross
            
            
            0
            
            
            
            05%
      Beneficial Owners:Bjorn
      Persson
            
            
            2,547,126
            
            
            
            9.8
            %Genesis
      Capital Advisors, LLC (3)
            
            
            1,580,598
            
            
            
            6.1
            %Vision
      Opportunity Master Fund, Ltd. (4)
            
            
            2,646,030
            (5)
            
            
            9.9
            %
      (5)All
      Executive Officers and Directors as a Group
      (6 persons)
            
            
            17,978,853
            
            
            
            69.0
            %







* Less
than 1%




(1)
            Under
      Rule 13d-3, a beneficial owner of a security includes any person who,
      directly or indirectly, through any contract, arrangement, understanding,
      relationship, or otherwise has or shares: (i) voting power, which includes
      the power to vote, or to direct the voting of shares; and (ii) investment
      power, which includes the power to dispose or direct the disposition of
      shares.  Certain shares may be deemed to be beneficially owned
      by more than one person (if, for example, persons share the power to vote
      or the power to dispose of the shares).  In addition, shares are
      deemed to be beneficially owned by a person if the person has the right to
      acquire the shares (for example, upon exercise of an option) within 60
      days of the date as of which the information is provided.  In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights.  As a result, the percentage of outstanding shares of
      any person as shown in this table does not necessarily reflect the
      person's actual ownership or voting power with respect to the number of
      shares of common stock actually
outstanding.





(2)
            The
      percentage of class beneficially owned is based on 26,048,750 shares of
      common stock outstanding on March 30,
2009.





(3)
            The
      address for this stockholder is 15760 Ventura Blvd., Suite 1550, Encino,
      CA 91436.





(4)
            The
      address for this stockholder is c/o Citi Hedge Fund Services (Cayman)
      Limited, Cayman Corporate Centre, 27 Hospital Road, 5th Floor, Grand
      Cayman KY1-1109, Cayman Islands. Adam Benowitz, as the managing member of
      Vision Capital Advisors, LLC, the investment advisor to this stockholder,
      has dispositive and voting power over these securities and may be deemed
      to be the beneficial owner of these
securities.





(5)
            This
      number includes 2,178,000 shares of Common Stock and 468,030 shares of
      Common Stock issuable upon conversion of 468,030 shares of our Series A
      Preferred Stock, which are presently convertible. This number does not
      include (i) 3,031,970 shares of Common Stock underlying its shares of
      Series A Preferred Stock, (ii) 1,750,000 shares of Common Stock underlying
      its Series A Warrants, (iii)1,750,000 shares of Common Stock underlying
      its Series B Warrants, or (iv) 1,600,000 shares of Common Stock underlying
      an option to purchase such shares because each of these securities held by
      the stockholder contains a restriction on conversion or exercise, as the
      case may be, limiting such holder’s ability to convert or exercise to the
      extent that such conversion or exercise would cause the beneficial
      ownership of the holder, together with its affiliates, to exceed 9.99% of
      the number of shares of Common Stock outstanding immediately after giving
      effect to the issuance of shares of Common Stock as a result of a
      conversion or exercise. The stockholder may waive this limitation upon 61
      days’ notice to the Company.  As of March 31, 2009, however, the
      Company has not received any such
notice.





32





ITEM 13.
            CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS, AND DIRECTOR
INDEPENDENCE





Transactions
with Related Persons





On July
11, 2008, Dean Marks transferred 18% of his 85% holdings of shares of common
stock in Premier Power California to Miguel de Anquin. Following this transfer,
Dean Marks and Miguel de Anquin held 67% and 33%, respectively, of the shares of
common stock in Premier Power California.





On August
27, 2008, Bjorn Persson and Juan Ostiz each exchanged 100% of their interests in
Premier Power Spain for shares of common stock in Premier Power California. On
September 1, 2008, Dean Marks and Miguel de Anquin each exchanged 100% of their
interests in Premier Power Spain and Bright Future for shares of common stock in
Premier Power California. Following these transfers, Dean Marks, Miguel de
Anquin, Bjorn Persson, and Juan Ostiz held approximately 54.1%, 30.7%, 12.6%,
and 2.6%, respectively of the shares of common stock in Premier Power
California, and Premier Power Spain and Bright Future became wholly owned
subsidiaries of Premier Power California.





On
September 9, 2008, in a share exchange transaction, we acquired a solar energy
business based in California that specializes in solar integration, by executing
the Exchange Agreement by and among the Company, Premier Power California, and
the PPG Owners.





Under the
Exchange Agreement, on the Closing Date, we acquired all of the outstanding
shares of Premier Power California through the issuance of 24,218,750 shares of
our common stock to the PPG Owners. Immediately prior to the Share Exchange, we
had 1,800,000 shares of common stock outstanding, after taking account of our
cancellation of 25,448,000 shares of our common stock held by Vision Opportunity
Master Fund, which cancellation occurred concurrently with the Share Exchange.
Immediately after the issuance of the shares to the PPG Owners, we had
26,018,750 shares of common stock issued and outstanding. As a result of the
Share Exchange, the PPG Owners became our controlling stockholders, and Premier
Power California became our wholly owned subsidiary. In connection with Premier
Power California becoming our wholly owned subsidiary, we acquired the business
and operations of the Premier Power Group, which became our principal
business.





Concurrently
with the closing of the Share Exchange and pursuant to a purchase and sale
agreement, we sold all of the outstanding membership interests of our wholly
owned subsidiary, Harry’s Trucking, LLC, a California limited liability company,
to Haris Tajyar and Omar Tajyar in full satisfaction of related party cash
advances and their indemnity with respect to the Company's prior business
operations.





Director
Independence




Our board
of directors has determined that it currently has 2 members who
qualify as "independent" as the term is used in Section 803A and Rule
10A-3(b)(ii) promulgated thereunder of the Exchange Act and the listing
standards of the NYSE Alternext U.S., LLC.  The independent directors
are Kevin Murray and Robert Medearis.








ITEM
      14.
            PRINCIPAL
      ACCOUNTING FEES AND SERVICES





Macias
Gini & O’Connell LLP served as our independent registered public accounting
firm for our fiscal year ended December 31, 2008.  The following table
shows the fees that were billed for audit and other services provided by this
firm during the 2008 fiscal year:




Fiscal
      Year Ended December 31, 2008Audit
      Fees (1)
              
              $
              185,000Audit-Related
      Fees (2)
              
              
              214,000Tax
      Fees (3)
              
              
              —All
      Other Fees (4)
              
              
              —Total
              
              $
              399,000





(1)
            Audit Fees – This
      category includes the audit of our annual financial statements, review of
      financial statements included in our Quarterly Reports on Form 10-Q, and
      services that are normally provided by independent auditors in connection
      with statutory and regulatory filings or the engagement for fiscal
      years.  This category also includes advice on audit and
      accounting matters that arose during, or as a result of, the audit or the
      review of interim financial
statements.





(2)
            Audit-Related Fees –
      This category consists of assurance and related services by our
      independent auditors that are reasonably related to the performance of the
      audit or review of our financial statements and are not reported above
      under "Audit Fees."  The services for the fees disclosed under
      this category include consultation regarding our correspondence with the
      SEC.




33




(3)
            Tax Fees – This category
      consists of professional services rendered by our independent auditors for
      tax compliance and tax advice.  The services for the fees
      disclosed under this category include tax return preparation and technical
      tax advice.





(4)
            All Other Fees – This
      category consists of fees for other miscellaneous
  items.




Li & Company, PC served as our independent
registered public accounting firm for a portion of our fiscal year ended
December 31, 2008.  The following table shows the fees that were
billed for the audit and other services provided by this firm during the 2008
fiscal year:




Fiscal Year Ended December 31,
      2008Audit
      Fees (1)
                                
                                $
                                11,500Audit-Related
      Fees (2)
                                
                                
                                ―Tax
      Fees (3)
                                
                                
                                ―All
      Other Fees (4)
                                
                                
                                ―Total
                                
                                $
                                11,500





(1)
            Audit Fees – This
      category includes the audit of our annual financial statements, review of
      financial statements included in our Quarterly Reports on Form 10-Q, and
      services that are normally provided by independent auditors in connection
      with the engagement for fiscal years.  This category also
      includes advice on audit and accounting matters that arose during, or as a
      result of, the audit or the review of interim financial
      statements.





(2)
            Audit-Related Fees –
      This category consists of assurance and related services by our
      independent auditors that are reasonably related to the performance of the
      audit or review of our financial statements and are not reported above
      under "Audit Fees."  The services for the fees disclosed under
      this category include consultation regarding our correspondence with the
      SEC.





(3)
            Tax Fees – This category
      consists of professional services rendered by our independent auditors for
      tax compliance and tax advice.  The services for the fees
      disclosed under this category include tax return preparation and technical
      tax advice.





(4)
            All Other Fees – This
      category consists of fees for other miscellaneous
  items.




KMJ
Corbin & Company, LLP served as our independent registered public accounting
firm for our fiscal year ended December 31, 2007.  The following table
shows the fees that were billed for the audit and other services provided by
this firm during the 2007 fiscal year:




Fiscal Year Ended December 31,
      2007Audit
      Fees (1)
                              
                              $
                              42,230Audit-Related
      Fees (2)
                              
                              
                              ―Tax
      Fees (3)
                              
                              $
                              2,687All
      Other Fees (4)
                              
                              
                              ―Total
                              
                              $
                              44,917





(1)
            Audit Fees – This
      category includes the audit of our annual financial statements, review of
      financial statements included in our Quarterly Reports on Form 10-Q, and
      services that are normally provided by independent auditors in connection
      with the engagement for fiscal years.  This category also
      includes advice on audit and accounting matters that arose during, or as a
      result of, the audit or the review of interim financial
      statements.





(2)
            Audit-Related Fees –
      This category consists of assurance and related services by our
      independent auditors that are reasonably related to the performance of the
      audit or review of our financial statements and are not reported above
      under "Audit Fees."  The services for the fees disclosed under
      this category include consultation regarding our correspondence with the
      SEC.





(3)
            Tax Fees – This category
      consists of professional services rendered by our independent auditors for
      tax compliance and tax advice.  The services for the fees
      disclosed under this category include tax return preparation and technical
      tax advice.





(4)
            All Other Fees – This
      category consists of fees for other miscellaneous
  items.




Pre-Approval
Policies and Procedures of the Audit Committee





Our audit
committee approves the engagement of our independent auditors and is also
required to pre-approve all audit and non-audit expenses.  In the
fiscal year ended December 31, 2008, no audit and non-audit expenses were
approved by our audit committee as such committee was not formed until March 18,
2009.





34




PART
IV





ITEM
      15.
            EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES





Financial
Statements; Schedules





Our consolidated financial statements
for the  years ended December 31, 2008 and 2007 begin on page F-1 of
this annual report on Form 10-K.  We are not required to file any
financial statement schedules.





Exhibits





The Exhibit Table on the following page
lists those documents that we are required to file with this annual report on
Form 10-K.




35




EXHIBIT
TABLE





Exhibit
      Number
            
            Description2.1
            
            Share
      Exchange Agreement by and among the Registrant, its majority stockholder,
      Premier Power Renewable Energy, Inc., and its stockholders, dated
      September 9, 2008 (3)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 (6)3.7
            
            Amendment
      to Bylaws (7)10.1
            
            Business
      Loan Agreement (Asset Based) between Premier Power Renewable Energy, Inc.
      and Guaranty Bank, dated February 27, 2008 (3)10.2
            
            Promissory
      Note issued to Guaranty Bank by Premier Power Renewable Energy, Inc.,
      dated February 27, 2008 (3)10.3
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Dean Marks, and
      Guaranty Bank, dated February 27, 2008 (3)10.4
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Sarilee Marks, and
      Guaranty Bank, dated February 27, 2008 (3)10.5
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Simply Solar Inc.,
      and Guaranty Bank, dated February 27, 2008 (3)10.6
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Bright Future
      Technologies, LLC, and Guaranty Bank, dated February 27, 2008
      (3)10.7
            
            Master
      Commercial Solar Terms and Conditions of Schüco USA, L.P.
    (3)10.8
            
            Authorized
      Dealer Agreement between Premier Power Renewable Energy, Inc. and SunPower
      Corporation, dated June 20, 2008 (3)10.9
            
            Employment
      Agreement between Premier Power Renewable Energy, Inc. and Dean R. Marks,
      dated August 22, 2008 (3)10.10
            
            Employment
      Agreement between Premier Power Renewable Energy, Inc. and Miguel de
      Anquin, dated August 22, 2008 (3)10.11
            
            Premier
      Management Consulting Agreement between Genesis Capital Advisors, LLC and
      Premier Power Renewable Energy, Inc., dated November 13, 2007
      (3)10.12
            
            Engagement
      Agreement between GT Securities and Genesis Capital Advisors, LLC with and
      on behalf of Premier Power Renewable Energy, Inc., dated November 13, 2007
      (3)10.13
            
            Form
      of Securities Purchase Agreement (3)10.14
            
            Form
      of Registration Rights Agreement (3)10.15
            
            Form
      of Series A Common Stock Purchase Warrant (3)




36




10.16
            
            Form
      of Series B Common Stock Purchase Warrant (3)10.17
            
            Form
      of Lock-up Agreement (3)10.18
            
            Purchase
      and Sale Agreement between Harry’s Trucking, Inc. and Haris Tajyar and
      Omar Tajyar, dated September 9, 2008 (3)10.19
            
            Guaranty
      of Payment by Premier Power Renewable Energy, Inc. in favor of Guaranty
      Bank, dated September 9, 2008 (3)10.20
            
            Employment
      Agreement between Premier Power Renewable Energy, Inc. and Teresa Kelley,
      date October 24, 2008 (4)10.21
            
            First
      Amendment to Registration Rights Agreement between Premier Power Renewable
      Energy, Inc., Genesis Capital Advisors, LLC, and Vision Opportunity Master
      Fund, Ltd., dated October 31, 2008 (5)10.22
            
            Amended
      and Restated Agreement to Serve as Member of the Board of Directors
      between Premier Power Renewable Energy, Inc. and Kevin Murray, dated
      December 19, 2008 (8)10.23
            
            Amended
      and Restated Agreement to Serve as Member of the Board of Directors
      between Premier Power Renewable Energy, Inc. and Robert Medearis, dated
      December 19, 2008 (8)10.24
            
            Voting
      Agreement between Dean Marks and Miguel de Anquin, signed June 16, 2008
      (and addendum) (10)10.25
            
            Voting
      Agreement between Dean Marks and Miguel de Anquin, dated January 21, 2009
      (10)10.26
            
            Voting
      Agreement between Dean Marks, Sarilee Marks, and Miguel de Anquin, dated
      January 21, 2009 (10)10.27
            
            Business
      Loan Agreement (Asset Based) between Premier Power Renewable Energy, Inc.
      and Guaranty Bank, entered into on March 9, 2009 and effective February
      27, 2009 (11)10.28
            
            Promissory
      Note issued to Guaranty Bank by Premier Power Renewable Energy, Inc.,
      entered into on March 9, 2009 and effective February 27, 2009
      (11)10.29
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Dean Marks, and
      Guaranty Bank, entered into on March 9, 2009 and effective February 27,
      2009 (11)10.30
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Sarilee Marks, and
      Guaranty Bank, entered into on March 9, 2009 and effective February 27,
      2009 (11)10.31
            
            Commercial
      Guaranty between Premier Power Renewable Energy, Inc., Bright Future
      Technologies, LLC, and Guaranty Bank, entered into on March 9, 2009 and
      effective February 27, 2009 (11)10.32
            
            Director
      Agreement between Premier Power Renewable Energy, Inc. and Tommy Ross
      (12)10.33
            
            Voting
      Agreement between Dean Marks and Miguel de Anquin, dated January 2, 2006
      *14.1
            
            Code
      of Business Conduct and Ethics (9)21.1
            
            List
      of Subsidiaries (3)31.1
            
            Section
      302 Certificate of Chief Executive Officer *31.2
            
            Section
      302 Certificate of Chief Financial Officer *32.1
            
            Section
      906 Certificate of Chief Executive Officer *32.2
            
            Section
      906 Certificate of Chief Financial 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.




37




(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 October 30, 2008 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(5)
            Filed
      on November 6, 2008 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(6)
            Filed
      on November 26, 2008 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(7)
            Filed
      on January 16, 2009 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(8)
            Filed
      on December 29, 2008 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(9)
            Filed
      on November 7, 2008 as an exhibit to our Registration Statement on Form
      S-1, and incorporated herein by
reference.





(10)
            Filed
      on February 5, 2009 as an exhibit to our Amendment No. 1 to Registration
      Statement on Form S-1/A, and incorporated herein by
    reference.





(11)
            Filed
      on March 12, 2009 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





(12)
            Filed
      on March 24, 2009 as an exhibit to our Current Report on Form 8-K, and
      incorporated herein by reference.





38




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.





PREMIER
      POWER RENEWABLE ENERGY, INC./s/
      Dean MarksDean
      Marks, Chief Executive Officer and PresidentDate:
      March 31, 2009


In
accordance with the Securities Exchange of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.





NAME
            
            TITLE
            
            DATE/s/
      Dean Marks
            
            Chairman
      of the Board, Chief Executive Officer (Principal Executive Officer), and
      President
            
            March
      31, 2009Dean
      Marks/s/
      Miguel de Anquin
            
            Chief
      Operating Officer and Director
            
            March
      31, 2009Miguel
      de Anquin/s/
      Teresa Kelley
            
            Chief
      Financial Officer (Principal Financial Officer)
            
            March
      31, 2009Teresa
      Kelley/s/
      Kevin Murray
            
            Director
            
            March
      31, 2009Kevin
      Murray/s/
      Tommy Ross
            
            Director
            
            March
      31, 2009Tommy
      Ross







39