<SUBMISSION>
<ACCESSION-NUMBER>0000032878-08-000030
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20080331
<FILING-DATE>20080508
<DATE-OF-FILING-DATE-CHANGE>20080508
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ENERGY CONVERSION DEVICES INC
<CIK>0000032878
<ASSIGNED-SIC>3674
<IRS-NUMBER>381749884
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-08403
<FILM-NUMBER>08813521
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2956 WATERVIEW DRIVE
<CITY>ROCHESTER HILLS
<STATE>MI
<ZIP>48309
<PHONE>248-293-0440
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2956 WATERVIEW DRIVE
<CITY>ROCHESTER HILLS
<STATE>MI
<ZIP>48309
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ENERGY CONVERSION LABORATORIES INC
<DATE-CHANGED>19710603
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>mar08_quarterly-report.htm
<DESCRIPTION>FY08 THIRD QUARTER FINANCIAL REPORT
<TEXT>

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<A href="#tocmain">Table of Contents</A></I></U> </FONT><BR>
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<P style="MARGIN-TOP: 16pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2><B>UNITED STATES</B></FONT></P>

<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2><B>SECURITIES AND EXCHANGE COMMISSION</B></FONT></P>

<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2><B>Washington, D.C. 20549</B></FONT></P>

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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2><B>FORM 10-Q</B></FONT></P>

<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2>(Mark One)</FONT></P>

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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 3.35pt; TEXT-ALIGN: left"><FONT face=Wingdings size=4>&#254;</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH&nbsp;31, 2008.</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 3.35pt; TEXT-ALIGN: left"><FONT face=Wingdings size=4>&#168;</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________.</FONT></P>
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<P style="MARGIN-TOP: 7pt; MARGIN-BOTTOM: 7pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>Commission File Number: </FONT><U><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;1-8403&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
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<P style="MARGIN-TOP: 4pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>ENERGY CONVERSION DEVICES, INC.</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>(Exact name of registrant as specified in its charter)</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>DELAWARE</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 35pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>38-1749884</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 35pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>(I.R.S. Employer Identification No.)</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2>2956 Waterview Drive, Rochester Hills, Michigan</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>48309</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2>(Address of principal executive offices)</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>(Zip Code)</FONT></P>
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<P style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 1pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2>Registrant&#146;s telephone number, including area code</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 1pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>(248) 293-0440</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 16pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>Former name, former address and former fiscal year, if changed since last report.</FONT></P>
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<P style="MARGIN-TOP: 4pt; MARGIN-BOTTOM: 4pt; TEXT-INDENT: 7.69%; MARGIN-RIGHT: 3%; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</FONT>&nbsp;&nbsp;<FONT face=Wingdings size=4>&#254;</FONT> <FONT face="Times New Roman, Times, Serif" size=2>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#168;</FONT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;No</FONT></P>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 10pt; TEXT-INDENT: 7.69%; MARGIN-RIGHT: 3%; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of the Exchange Act.</FONT><font size=2>&nbsp;</FONT></P>


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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 5pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Large&nbsp;accelerated&nbsp;filer&nbsp;&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#254;</FONT> </P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 5pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Accelerated&nbsp;filer&nbsp;&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#168;</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 5pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Non-accelerated&nbsp;filer&nbsp;&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#168;</FONT>
<BR><FONT face="Times New Roman, Times, Serif" size=2>(do&nbsp;not&nbsp;check&nbsp;if&nbsp;a&nbsp;smaller<BR>&nbsp;reporting&nbsp;company</font>)</P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 5pt; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Smaller&nbsp;reporting&nbsp;company&nbsp;&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#168;</FONT>&nbsp;</P>

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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; MARGIN-RIGHT: 5%; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</FONT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;</FONT><FONT face=Wingdings size=4>&#168;</FONT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;<FONT face=Wingdings size=4>&#254;</FONT>&nbsp;&nbsp;</FONT></P>

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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT face="Times New Roman, Times, Serif" size=2>As of May 2, 2008, there were 40,499,415 shares of ECD&#146;s Common Stock outstanding.</FONT></P>

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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>Page 1 of&nbsp;53 Pages </FONT></P>

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<A name=tocmain></A>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2><B>ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES<BR><BR>CONSOLIDATED FINANCIAL STATEMENTS<BR><BR>TABLE OF CONTENTS</B></FONT></P>

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<TD align=left colSpan=4><FONT face="Times New Roman, Times, Serif" size=2>PART I &#151; FINANCIAL INFORMATION</FONT></TD></TR>

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<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 1.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#toca">Financial Statements</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#toca">Consolidated Statements of Operations</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>2</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocb">Consolidated Balance Sheets &#150; Assets</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>3</FONT></TD></TR>

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<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocc">Consolidated Balance Sheets &#150; Liabilities and Stockholders' Equity</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>4</FONT></TD></TR>

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<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocd">Consolidated Statements of Cash Flows</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>5</FONT></TD></TR>

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<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>Notes to Consolidated Financial Statements</FONT></TD>
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<TD STYLE="text-indent:9px;" ALIGN="LEFT" WIDTH="3%"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;A</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1" WIDTH="74%"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#toce">Summary of Accounting Policies</A></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="3%"><FONT face="Times New Roman, Times, Serif" size=2>7</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;B</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocf">Accounts Receivable</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>23</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;C</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocg">Inventories</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>24</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;D</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#toch">Joint Ventures and Investments</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>24</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;E</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#toci">Liabilities</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>25</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;F</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocj">Lines of Credit</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>26</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;G</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tock">Commitments</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>26</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" VALIGN="top" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;H</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocl">Royalties, Nonrefundable Advance Royalties and License Agreements</A></FONT></TD>
<TD VALIGN="bottom" ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>27</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;I</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocm">Business Segments</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>27</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;J</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#tocn">Income Taxes</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>28</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT></TD>
<TD STYLE="text-indent:9px;" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTE&nbsp;K</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="1"><FONT face="Times New Roman, Times, Serif" size=2>&#150;&nbsp;&nbsp;
<A href="#toco">Litigation</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>29</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.2em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 2.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocq">Management's Discussion and Analysis of Financial Condition and Results of Operations</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>31</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 3.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocr">Quantitative and Qualitative Disclosures About Market Risk</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>49</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 4.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocs">Controls and Procedures</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>49</FONT></TD></TR>
<TR style="LAYOUT-GRID-LINE: 3.5em" vAlign=bottom>
<TD align=left colSpan=4><FONT face="Times New Roman, Times, Serif" size=2>PART II &#151; OTHER INFORMATION</FONT></TD></TR>


<TR style="PADDING-BOTTOM: 0.3em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 1.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#toct">Legal Proceedings</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>50</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.3em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 1A.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocu">Risk Factors</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>51</FONT></TD></TR>

<TR style="PADDING-BOTTOM: 0.1em" vAlign=bottom>
<TD STYLE="TEXT-INDENT: 20px" ALIGN="LEFT"><FONT face="Times New Roman, Times, Serif" size=2>Item 6.</FONT></TD>
<TD ALIGN="LEFT" COLSPAN="2"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocv">Exhibits</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>52</FONT></TD></TR>

<TR style="LAYOUT-GRID-LINE: 3.5em" vAlign=bottom>
<TD ALIGN="LEFT" COLSPAN="3"><FONT face="Times New Roman, Times, Serif" size=2>
<A href="#tocw">SIGNATURES</A></FONT></TD>
<TD ALIGN="RIGHT"><FONT face="Times New Roman, Times, Serif" size=2>53</FONT></TD></TR>
</TABLE>


<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>i</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<A name="toca">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><u><font size=2>PART I &#150; FINANCIAL INFORMATION</font></u></p>

<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="92%" style='border-collapse:collapse'>
    <tr >
        <td width="10%" nowrap valign=top style='padding:8.0pt 0in 8.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Item 1</font></b></u><b><font size=2>.</font></b></p> </td>
        <td width="90%" nowrap valign=top style='padding:8.0pt 0in 8.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Financial Statements</font></b></u></p> </td> </tr></table>
</div>

<p style=' margin-bottom:4pt; margin-top:8pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:5.31%;text-align:center;'><U><font SIZE=2>CONSOLIDATED STATEMENTS OF OPERATIONS</font></U></p>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>(Unaudited)</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="41%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font SIZE=2>REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10.5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10.5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="0.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>65,366,437</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>23,205,632</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>159,390,920</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>64,730,544</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Royalties</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,537,284</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>769,588</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4,044,286</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,396,974</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,691,323</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,887,232</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>8,489,755</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>8,750,231</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Revenues from license agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>263,500</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>238,095</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,014,690</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>734,285</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other revenues</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>123,455</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>328,761</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>532,902</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>946,771</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>69,981,999</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>27,429,308</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>173,472,553</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>77,558,805</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 0in'><font SIZE=2>EXPENSES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Cost of product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>45,295,569</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>19,787,231</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>122,108,940</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>54,121,929</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Cost of revenues from product <BR>development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,863,149</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,012,243</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,391,404</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,725,945</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Product development and research</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,653,078</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,670,745</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>7,698,507</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>15,337,609</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Patents (including patent defense)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>386,681</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>638,129</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,350,244</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,367,231</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Preproduction costs</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>750,787</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>490,926</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,574,597</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,594,927</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Operating, selling, general and <BR>administrative (net)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>12,074,743</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>9,810,276</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>35,730,395</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>24,610,636</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Restructuring charges</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,386,361</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>7,456,845</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>64,410,368</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>38,409,550</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>185,310,932</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>103,758,277</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 0in'><font SIZE=2>INCOME (LOSS) FROM OPERATIONS</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>5,571,631</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(10,980,242</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(11,838,379</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(26,199,472</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font SIZE=2>OTHER INCOME (EXPENSE)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Interest income</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,508,099</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4,140,727</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>6,037,773</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>14,374,685</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Interest expense</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(66,106</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(66,106</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.4in;text-indent:-.2in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other nonoperating expense</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(2,585</font></p> </td>
        <TD VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(31,755</font></p> </td>
        <TD VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(57,423</font></p> </td>
        <TD VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(261,211</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>TOTAL OTHER INCOME</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,439,408</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4,108,972</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,914,244</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>14,113,474</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:12.25pt;text-indent:-.15in;text-align:left;margin-top:4.0pt;margin-bottom: 0in'><font SIZE=2>NET INCOME (LOSS) BEFORE <BR>INCOME TAXES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>7,011,039</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(6,871,270</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(5,924,135</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(12,085,998</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>INCOME TAXES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>36,900</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>94,500</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>

    <TR STYLE="page-break-inside:avoid;" VALIGN="Top">
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom: 0in'><font SIZE=2>NET INCOME (LOSS)</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>6,974,139</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(6,871,270</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(6,018,635</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>(12,085,998</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Basic Net Income (Loss) Per Share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>.17</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(.17</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(.15</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(.31</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>Diluted Net Income (Loss) Per Share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>.17</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>(.17</font></p> </td>
        <TD VALIGN="TOP">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>(.15</font></p> </td>
        <TD VALIGN="TOP">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>(.31</font></p> </td>
        <TD VALIGN="TOP">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>)&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:1pt; margin-top:19pt;text-align:left;'><font size=2>See notes to consolidated financial statements.</font></p>

<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>2</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<A name="tocb">&nbsp;</A>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:8pt; margin-top:6pt;text-align:center;'><U><font SIZE=2>ASSETS</font></U></p>


<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>June 30,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:4.0pt'><font size=2>(Unaudited)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="63%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font SIZE=2>CURRENT ASSETS</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Cash, including cash equivalents of $80,295,000 at </font><br> <font size=2>March&nbsp;31, 2008 and $80,278,000 at June 30, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>80,690,047</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>80,769,970</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Restricted investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>5,659,129</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Short-term investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>14,963,383</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>125,003,963</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Accounts receivable (net)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>44,204,282</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>36,497,575</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Inventories </font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>32,231,915</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>38,692,178</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Assets held for sale</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>1,538,843</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>1,523,543</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 3.0pt'><font size=2>Other</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>3,706,848</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>2,396,014</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font SIZE=2>TOTAL CURRENT ASSETS</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>182,994,447</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>284,883,243</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 3.0pt'><font SIZE=2>PROPERTY, PLANT AND EQUIPMENT</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Buildings and improvements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>59,886,031</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>23,382,529</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Machinery and other equipment</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>239,751,547</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>129,186,752</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 3.0pt'><font size=2>Assets under capitalized leases</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>26,775,025</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>26,406,764</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>326,412,603</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>178,976,045</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 3.0pt'><font size=2>Less accumulated depreciation and amortization</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>(54,864,014</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>(41,992,111</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.5pt;margin-bottom: 3.0pt'><font SIZE=2>NET DEPRECIABLE ASSETS</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.5pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.5pt;margin-bottom: 3.0pt'><font size=2>271,548,589</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.5pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.5pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.5pt;margin-bottom: 3.0pt'><font size=2>136,983,934</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.5pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>Land</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>1,157,394</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>1,376,580</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 3.0pt'><font size=2>Construction in progress</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>111,876,846</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>173,008,798</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font SIZE=2>TOTAL PROPERTY, PLANT AND EQUIPMENT</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>384,582,829</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>311,369,312</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 3.0pt'><font SIZE=2>LONG-TERM INVESTMENTS</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=2>32,757,040</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:3.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6pt;margin-bottom: 3.0pt'><font SIZE=2>OTHER ASSETS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=2>4,809,304</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=2>4,426,025</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6pt;margin-bottom: 3.0pt'><font SIZE=2>TOTAL ASSETS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=2>605,143,620</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 3.0pt'><font size=2>600,678,580</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

</div>


<p style=' margin-bottom:0pt; margin-top:24pt; margin-left:1.25%;text-align:left;'><font size=2>See notes to consolidated financial statements.</font></p>

<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>3</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<A name="tocc">&nbsp;</A>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>June 30,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:4.0pt'><font size=2>(Unaudited)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-top: solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 4.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="67%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 0in'><font SIZE=2>CURRENT LIABILITIES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>Accounts payable and accrued expenses</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>36,248,355</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>34,267,171</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>Salaries, wages and amounts withheld from employees</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>7,034,004</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>3,067,034</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>Restructuring reserve</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>1,766,647</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>3,630,634</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>Deferred revenues under business agreements </font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>92,618</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>109,639</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=2>Current portion of deferred patent license fee</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>952,380</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>952,380</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom: 1pt'><font size=2>Current installments on long-term liabilities </font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>1,072,910</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>912,781</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.85in;text-indent:-.25in;text-align:left;margin-top:3pt;margin-bottom:1pt'><font SIZE=2>TOTAL CURRENT LIABILITIES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>47,166,914</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:3pt;margin-bottom:1pt'><font size=2>42,939,639</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font SIZE=2>LONG-TERM LIABILITIES </font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>25,370,842</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>25,795,875</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font SIZE=2>LONG-TERM RESTRUCTURING RESERVE</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>404,905</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:4pt;margin-bottom:1pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font SIZE=2>LONG-TERM DEFERRED PATENT LICENSE FEE</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>5,476,195</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>6,190,480</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom: 1pt'><font SIZE=2>NONREFUNDABLE ADVANCE ROYALTIES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>245,660</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>245,660</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.85in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font SIZE=2>TOTAL LIABILITIES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>78,664,516</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>75,171,654</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=2>COMMITMENTS AND CONTINGENCIES (NOTES&nbsp;A AND G)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=2>STOCKHOLDERS&#146; EQUITY</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Capital Stock </font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:35.3pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>Common Stock, par value $0.01 per share:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

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        <TD VALIGN="BOTTOM">
            <p style='margin-left:45.55pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:0pt;line-height:98.28%'><font size=2>Authorized &#150; 100,000,000 shares at March&nbsp;31, </font><br> <font size=2>2008 and at June&nbsp;30, 2007</font><br> </p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt;line-height:98.28%'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt;line-height:98.28%'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt;line-height:98.28%'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt;line-height:98.28%'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:45.55pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:1pt;line-height:98.28%'><font size=2>Issued and outstanding &#150; 40,333,907 shares at </font><br> <font size=2>March&nbsp;31, 2008 and 39,796,910 shares at </font><br> <font size=2>June&nbsp;30, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt;line-height:98.28%'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt;line-height:98.28%'><font size=2>403,339</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt;line-height:98.28%'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt;line-height:98.28%'><font size=2>397,969</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>Additional paid-in capital</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>862,827,693</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>854,160,702</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>Accumulated deficit</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>(335,037,194</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>(329,018,559</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.0pt;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom: 1pt'><font size=2>Accumulated other comprehensive loss</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>(1,714,734</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:1pt'><font size=2>(33,186</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:1pt'><font size=2>)&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.85in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom: 1pt'><font size=2>TOTAL STOCKHOLDERS&#146; EQUITY</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>526,479,104</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>525,506,926</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.85in;text-indent:-.25in;text-align:left;margin-top:4pt;margin-bottom: 1pt'><font size=2>TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>605,143,620</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4pt;margin-bottom:1pt'><font size=2>600,678,580</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

</div>


<p style=' margin-bottom:0pt; margin-top:24pt; margin-left:1.25%;text-align:left;'><font size=2>See notes to consolidated financial statements.</font></p>


<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>4</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>

<A name="tocd">&nbsp;</A>
<p style=' margin-bottom:1pt; margin-top:3pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:2pt; margin-top:3pt;text-align:center;'><U><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></U></p>

<p style=' margin-bottom:2pt; margin-top:2pt;text-align:center;'><u><font size=2>(Unaudited)</font></u></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:.5pt;margin-bottom: .5pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:.5pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:.5pt;margin-bottom:.5pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:.5pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:.5pt;margin-bottom:.5pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD WIDTH="67%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font SIZE=2>OPERATING ACTIVITIES:</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Net loss</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(6,018,635</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(12,085,998</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Adjustments to reconcile net loss to net cash provided by </font><br> <font size=2>(used in) operating activities:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Depreciation and amortization</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>15,058,962</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>8,258,246</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Bad debt and other expenses</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>734,170</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(54,615</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Allowance for slow-moving inventory</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>1,793,038</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>1,420,909</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Restructuring charge</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>1,019,409</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Warranty expense</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>343,468</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(369,505</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Changes in government contracts and other reserves</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>186,252</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(364,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Amortization of deferred nonrefundable patent license fee</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(714,285</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(714,285</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Amortization of premium/discount on investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(145,683</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Stock and stock options issued for services rendered</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>1,505,768</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>1,455,249</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Gain on sale of equipment</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(368,800</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(989</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Loss on sale of investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>147,696</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>40,631</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Retirement liability</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>46,722</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(71,680</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Changes in working capital:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Accounts receivable</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(8,397,523</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>2,059,409</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Inventories</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>4,667,224</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(17,937,824</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Other assets</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(1,631,676</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(2,810,486</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Accounts payable and accrued expenses</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>5,688,655</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>20,085,883</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Restructuring reserve</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(1,374,082</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:57.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Deferred revenues under business agreements</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(17,021</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(97,556</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>12,669,342</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(1,332,294</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font SIZE=2>INVESTING ACTIVITIES:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase in restricted investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(5,659,129</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Purchases of property, plant, and equipment (including </font><br> <font size=2>construction in progress)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(88,768,084</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(139,421,084</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Purchases of investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(62,250,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(416,533,218</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Investment in Ovonyx</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(200,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Proceeds from sales of investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>115,037,849</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>232,839,734</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Proceeds from maturities of investments</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>22,591,331</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>205,197,739</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Proceeds from sale of property, plant and equipment</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>392,270</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>989</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>NET CASH USED IN INVESTING ACTIVITIES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(18,655,763</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(118,115,840</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font SIZE=2>FINANCING ACTIVITIES:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Principal payments under short-term and long-term debt </font><br> <font size=2>obligations and capitalized lease obligations</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(877,538</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(695,259</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Payments &#150; long-term retirement</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>(190,139</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:29.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Proceeds from exercise of stock options</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>7,038,898</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>9,003,264</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.65pt;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>NET CASH PROVIDED BY FINANCING ACTIVITIES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>5,971,221</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0pt'><font size=2>8,308,005</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.65pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>EFFECT OF EXCHANGE RATE CHANGES ON CASH AND </font><br> <font SIZE=2>CASH EQUIVALENTS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>(64,723</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>(17,545</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.65pt;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font SIZE=2>NET DECREASE IN CASH AND CASH EQUIVALENTS</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>(79,923</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>(111,157,674</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>)&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.65pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>80,769,970</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>164,961,982</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.65pt;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>CASH AND CASH EQUIVALENTS AT END OF PERIOD</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>80,690,047</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>53,804,308</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font size=2>See notes to consolidated financial statements.</font></p>
<p style=' margin-bottom:1pt; margin-top:2pt;text-align:center;'><font size=2>5</font></p>
<HR align=center width="100%" noShade SIZE=2>
<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Unaudited)</font></p>



<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:4.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:4.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="67%" VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font SIZE=2>SUPPLEMENTAL DISCLOSURES OF </font><br> <font SIZE=2>CASH FLOW INFORMATION:</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="11.5%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="11.5%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.65in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Cash paid for income taxes</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>122,589</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.65in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Cash paid for interest, including capitalized interest</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>1,865,052</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>1,531,366</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.65in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Noncash transactions:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:61.55pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Capital lease obligations to finance capital equipment</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>362,231</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>138,635</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:61.55pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Depreciation allocated to construction in progress</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>325,820</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:6.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

</div>



<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:8pt;text-align:left;'><font size=2>See notes to consolidated financial statements.</font></p>

<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>6</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<A name="toce">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:7.81%;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Basis of Presentation</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the Securities and Exchange Commission&#146;s rules and regulations.  The Company believes that the disclosures are adequate to make the information presented not misleading.  It is suggested that these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company&#146;s latest annual report on Form 10-K, which is available on the Company&#146;s website
<font color=#0000FF>www.ovonic.com.</font></font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Nature of Business</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Energy Conversion Devices, Inc. (&#147;ECD&#148;) commercializes materials, products and production processes for the alternative energy generation, energy storage and information technology markets.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Financial Statement Presentation, Principles of Consolidation and Equity Accounting</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The consolidated financial statements include the accounts of ECD and its 100%-owned subsidiary United Solar Ovonic LLC and United Solar Ovonic Corporation  (referred to as &#147;United Solar&#148;) and its 91.4%-owned subsidiary Ovonic Battery Company, Inc. (&#147;Ovonic Battery&#148; or &#147;OBC&#148;) (collectively the "Company"). No minority interest related to Ovonic Battery is recorded in the consolidated financial statements because there is no additional funding requirement by the minority shareholders.  The Company has, as of March&nbsp;31, 2008, two major investments accounted for using the equity method: (i) Cobasys LLC, a joint venture between Ovonic Battery and a subsidiary of Chevron Corporation, Chevron Technology Ventures LLC, (&#147;CTV&#148;), each having 50% interest in the joint venture and (ii) Ovonyx, Inc., a 39.3%-owned (or 30.7% on a fully diluted basis after
giving effect to exercise of stock options and warrants) corporation with Mr. Tyler Lowrey, Intel Capital, and other investors.  See Note&nbsp;D, &#147;Joint Ventures and Investments,&#148; of the Notes to our Consolidated Financial Statements for discussions of all of the Company&#146;s major joint ventures and investments.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In 2000, ECD contributed noncash, in-process technology to Ovonyx in exchange for an equity interest.  No value for this technology has been included in the Company&#146;s balance sheet.  ECD accounts for this investment under an equity method accounting model that allows for the disproportionate share of the amount of the cost basis investment and the percentage share of the underlying equity (determined as if the investee were a consolidated subsidiary) to be amortized over the estimated useful lives of the underlying assets.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>7</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Upon consolidation, all intercompany accounts and transactions are eliminated.  Any profits on intercompany transactions are eliminated to the extent of the Company&#146;s ownership percentage.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Cash Equivalents</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Cash equivalents consist of investments in short-term, highly liquid securities maturing 90 days or less from the date of acquisition.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Investments</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company has evaluated its investment policies consistent with Statements of Financial Accounting Standards (&#147;SFAS&#148;) No. 115, &#147;Accounting for Certain Investments in Debt and Equity Securities,&#148; and determined that all of its short-term investment securities are classified as available-for-sale.  Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in Stockholders&#146; Equity under the caption &#147;Accumulated Other Comprehensive Income.&#148;  The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity.  Such amortization and accretion are included in interest income.  Realized gains and losses and declines in value judged to be other than temporary on available-for-sale securities are included in other nonoperating income (expense).  The cost of securities
sold is based on the specific identification method.  Interest and dividends on securities classified as available-for-sale are included in interest income.  Short-term investments consist of auction rate certificates, corporate bonds and notes, and certificates of deposit which mature 91 days or more from date of acquisition.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Short-Term Investments</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following schedule summarizes the unrealized gains and losses on the Company's short-term investments (in thousands):</font></p>


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    <tr style='page-break-inside:avoid'>
        <td valign=top >
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=2>Amortized </font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="11" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Gross Unrealized</font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Estimated </font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td valign=top >
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan=4 valign=bottom style='border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>Cost</font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style='border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>Gains</font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style='border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>(Losses)</font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan=4 valign=bottom style='border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>Fair Value</font></p> </td>
        <td valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="36%" VALIGN="TOP">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:36.65pt;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Corporate Bonds</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>15,156</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(193</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double white 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>14,963</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=bottom >
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Restricted Investment &#150; Money Market</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>5,659</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>5,659</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=2>June 30, 2007</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:36.65pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Auction Rate Certificates</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>36,100</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>36,100</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:36.65pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Corporate Bonds</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>74,882</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>27</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(6</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>74,903</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:36.65pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Certificates of Deposit</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>14,001</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>14,001</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="36%" valign=top >
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>124,983</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>28</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(7</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double white 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>125,004</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>8</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following schedule summarizes the contractual maturities of the Company&#146;s short-term investments (in thousands):</font></p>

<div>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="9" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="9" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>June 30, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Amortized</font><br> <font size=2>Cost</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Market</font><br> <font size=2>Value</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Amortized</font><br> <font size=2>Cost</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Market</font><br> <font size=2>Value</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="35%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Due in less than one year</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>2,700</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>2,698</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>43,692</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>43,696</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Due after one year through five years</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,456</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,265</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>45,191</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>45,208</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2pt;margin-bottom: 2.0pt'><font size=2>Due after five years</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>36,100</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>36,100</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>15,156</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>14,963</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>124,983</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>125,004</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

</div>


<p style=' margin-bottom:8pt; margin-top:16pt;text-align:justify;'><i><font size=2>Long-Term Investments</font></i></p>

<p style=' margin-bottom:5pt; margin-top:8pt;text-align:justify;'><i><font size=2>(In thousands)</font></i></p>
<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse" BORDER="0">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:5pt;margin-bottom:0in'><font size=2>Amortized</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="11" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:5.0pt;margin-bottom:0pt'><font size=2>Gross Unrealized</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:5.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:5.0pt;margin-bottom:0in'><font size=2>Estimated</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>Cost</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>Gains</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>(Losses)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom: 2.0pt'><font size=2>Fair Value</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <TD WIDTH="2.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:36.65pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Auction Rate Certificates*</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>34,300</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td colspan=2 valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>(1,543)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>32,757</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:2pt; margin-top:0pt;text-align:justify;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><font size=2>*&nbsp;&nbsp;Auction rate certificates mature in more than five years with interest rates resetting monthly.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Auction Rate Certificates &#150; Auction Rate Certificates (ARCs) represent securities with fixed maturity dates the interest rates of which reset monthly.  Our ARCs are Student Loan Asset-Backed Securities by the Federal Family Education Loan (FFEL) Program.  The payments of principal and interest on these student loans are guaranteed by the state or not-for-profit-guaranty agency and ultimately guaranteed by the U.S. Department of Education.  At the time of our initial investment and through the date of this filing, all of our ARCs are rated as AAA.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>At March 31, 2008, the Company&#146;s investment advisor has valued these securities using their pricing model which is not a market model, but which does reflect some discount due to the current lack of liquidity of the investments as a result of recently failed auctions.  This valuation results in an unrealized loss of $1,542,960 as of March 31, 2008.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company believes this to be a temporary impairment and intends to hold these securities until the market for these securities recovers, or until maturity, and has recorded this amount in its </font><i><font size=2>accumulated other comprehensive loss</font></i><font size=2> account on its balance sheet.</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>9</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt;text-indent:0.5in;text-align:justify;'><font size=2>Due to the recent temporary liquidity problems experienced with these securities, we have reclassified them as Long-Term Investments.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Capitalized Interest</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Interest on capitalized lease obligations and other interest expense is capitalized during active construction periods of equipment.  The Company incurred total interest costs of $695,000 and $585,000 during the three months ended March&nbsp;31, 2008 and 2007, and $1,865,000 and $1,531,000 during the nine months ended March&nbsp;31, 2008 and 2007, the majority of which were capitalized as part of the new solar cell manufacturing equipment currently under construction.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Impairment</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Upon the identification of an event indicating potential impairment, the Company compares the carrying value of its long-lived assets with the estimated undiscounted cash flows or fair value associated with these assets.  If the carrying value of the long-lived assets is more than the estimated undiscounted cash flows or fair value, then an impairment loss is recorded.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Financial Instruments</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Due to the short-term maturities of cash equivalents, short-term investments, long-term investments, accounts receivable and accounts payable, the Company believes that the carrying value of its financial instruments is a reasonable estimate of fair value.  The carrying values of the long-term investments have been adjusted to reflect their fair values.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Accounts Receivable</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company maintains an allowance for uncollectible accounts considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, the customer&#146;s current ability to pay its obligation, and the condition of the general economy and industry as a whole.</font></p>


<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>10</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Property, Plant, and Equipment</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>All properties are recorded at cost.  Plant and equipment are depreciated on the straight-line method over the estimated useful lives of the individual assets.  The estimated lives of the principal classes of assets are as follows:</font></p>


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            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD WIDTH="12%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:1.0pt'><font size=2>Years</font></p> </td>
        <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
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        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Buildings and improvements*</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0in;margin-right:.12in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>1 to 33</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
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        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Machinery and other equipment</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0in;margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>3 to 12.5</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 1.0pt'><font size=2>Assets under capitalized leases</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0in;margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 1.0pt'><font size=2>3 to 20</font></p> </td>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:.7in;text-align:justify;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


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<table border="0" cellspacing=0 cellpadding=0 width="90%" style='border-collapse:collapse'>
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        <td width="10%" valign=top style='padding:2.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:2.0pt;margin-bottom: 8.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4.2%" valign=top style='padding:2.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;&nbsp;&nbsp;*</font></p> </td>
        <td  valign=top style='padding:2.0pt 0in 8.0pt 0in'>
            <p style='margin-right:30pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Includes leasehold improvements which are amortized over the shorter of the balance of the lease term or the life of the improvement, ranging from one to 20 years.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Costs of machinery and other equipment acquired or constructed for a particular product development project, which have no alternative future use (in other product development projects or otherwise), are charged to product development and research costs as incurred.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Assets under capitalized leases are amortized over the shorter of the term of the lease or the life of the equipment or facility, usually three to 20 years.  Accumulated amortization on assets under capitalized leases as of March&nbsp;31, 2008 and 2007 was $6,480,000 and $4,802,000, respectively.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Expenditures for maintenance and repairs are charged to operations.  Expenditures for betterments or major renewals are capitalized and are depreciated over their estimated useful lives.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Litigation</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company is involved in certain legal actions and claims arising in the ordinary course of business, including, without limitation, commercial disputes, intellectual property matters, personal injury claims, tax claims and employment matters.  Although the outcome of any legal matter cannot be predicted with certainty, management does not believe that any of these legal proceedings or matters will have a material adverse effect on the consolidated financial position or results of operations.  See Note K, &#147;Litigation,&#148; for additional information.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Warranty Reserve</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>A warranty reserve is recorded at the time that the product is sold (for sales of photovoltaic products) or at the time that revenue is recognized (for machine-building and equipment sales).</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>11</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Product Development, Patents and Technology</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Product development and research costs are expensed as they are incurred and, as such, the Company&#146;s investments in its technologies and patents are recorded at zero in its financial statements, regardless of their values.  The technology investments are the bases by which the Company is able to enter into strategic alliances, joint ventures and license agreements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Product Sales</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Product sales include revenues related to photovoltaic products and nickel hydroxide.  Generally, product sales are recognized under Ex-Works shipping terms (buyer is informed that goods are available for shipment).  All intersegment sales are eliminated in consolidation.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Royalties</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Most license agreements provide for the Company to receive royalties from the sale of products which utilize the licensed technology.  Typically, the royalties are incremental to and distinct from the license fee and are recognized as revenue upon the sale of the respective licensed product.  In several instances, the Company has received cash payments for nonrefundable advance royalty payments which are creditable against future royalties under the licenses.  Advance royalty payments are deferred and recognized in revenues as the creditable sales occur, the underlying agreement expires, or when the Company has demonstrable evidence that no additional royalties will be creditable and, accordingly, the earnings process is completed.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Business Agreements</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues are also derived through business agreements for the development and/or commercialization of products based upon the Company's proprietary technologies.  The Company has two major types of business agreements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The first type of business agreement relates to licensing the Company's proprietary technology.  Licensing activities are tailored to provide each licensee with the right to use the Company's technology, most of which is patented, for a specific product application or, in some instances, for further exploration of new product applications of such technologies.  The terms of such licenses, accordingly, are tailored to address a number of circumstances relating to the use of such technology which have been negotiated between the Company and the licensee.  Such terms generally address whether the license will be exclusive or nonexclusive, whether the licensee is limited to very narrowly defined applications or to broader-based product manufacture or sale of products using such technologies, whether the license will provide royalties for products sold which employ such licensed technology and
how such royalties will be measured, as well as other factors specific to each negotiated arrangement.  In some cases, licenses relate directly to product development that the Company has undertaken pursuant to product development </font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>12</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>agreements; in other cases, they relate to product development and commercialization efforts of the licensee; and other agreements combine the efforts of the Company with those of the licensee.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>License agreement fees are generally recognized as revenue at the time the agreements are consummated, which is the completion of the earnings process.  Typically, such fees are nonrefundable, do not obligate the Company to incur any future costs or require future performance by the Company, and are not related to future production or earnings of the licensee. In some instances, a portion of such license fees is contingent upon the commencement of production or other uncertainties.  In these cases, license fee revenues are not recognized until commencement of production or the resolution of uncertainties.  Generally, there are no current or future direct costs associated with license fees.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In the second type of agreement, product development agreements, the Company conducts specified product development projects related to one of its principal technology specializations for an agreed-upon fee.  Some of these projects have stipulated performance criteria and deliverables whereas others require "best efforts" with no specified performance criteria.  Revenues from product development agreements that contain specific performance criteria are recognized on a percentage-of-completion basis which matches the contract revenues to the costs incurred on a project based on the relationship of costs incurred to estimated total project costs.  Revenues from product development agreements, where there are no specific performance terms, are recognized in amounts equal to the amounts expended on the programs.  Generally, the agreed-upon fees for product development agreements contemplate
reimbursing the Company, after its agreed-upon cost share, if any, for costs considered associated with project activities including expenses for direct product development and research, patents, operating, general and administrative expenses and depreciation.  Accordingly, expenses related to product development agreements are recorded as cost of revenues from product development agreements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Deferred Revenues</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Deferred revenues represent amounts received under business agreements in excess of amounts recognized as revenues.  </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Other Operating Revenues</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Other operating revenues consist principally of revenues related to services provided to certain related parties and third-party service revenue realized by certain of the Company&#146;s service departments.  Revenues related to services are recognized upon completion of performance of the applicable service.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>13</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:left;'><u><font size=2>Other Nonoperating Income (Expense)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Other nonoperating income consists of amortization of deferred gains, rental income, and other miscellaneous income.  Other nonoperating expense consists of losses on sales of investments and miscellaneous expenses.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Stock-Based Compensation</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:left;'><font size=2>ECD has common stock reserved for issuance as follows:</font></p>


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        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="7" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Number of Shares</font></p> </td> </tr>
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        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>June 30, 2007</font></p> </td> </tr>
    <tr >
        <TD WIDTH="41%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Stock options</font></p> </td>
        <TD WIDTH="4.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>2,029,140</font></p> </td>
        <TD WIDTH="4.7%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>2,568,747</font></p> </td>
        <TD WIDTH="4.7%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Warrants </font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>400,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>400,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Convertible Investment Certificates</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>5,210</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>5,210</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:29.25pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font SIZE=2>TOTAL RESERVED SHARES</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2,434,350</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:0pt'><font size=2>2,973,957</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:15pt; text-indent:0.5in;text-align:justify;'><font size=2>ECD records the fair value of stock-based compensation grants as an expense.  In order to determine the fair value of stock options on the date of grant, ECD applies the Black-Scholes option-pricing model.  Inherent in this model are assumptions related to expected stock-price volatility, option life, risk-free interest rate and dividend yield.  While the risk-free interest rate and dividend yield are less subjective assumptions, typically based on factual data derived from public sources, the expected stock-price volatility and option life assumptions require a greater level of judgment.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>ECD uses an expected stock-price volatility assumption that is based on historical implied volatilities of the underlying stock which is obtained from public data sources.  With regard to the weighted-average option life assumption, ECD considers the exercise behavior of past grants and models the pattern of aggregate exercises.  Patterns are determined on specific criteria of the aggregate pool of optionees.  Forfeiture rates are based on the Company&#146;s historical data for stock option forfeitures.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The weighted average fair value of the options granted during the three months and nine months ended March&nbsp;31, 2008 and 2007 is estimated based on the date of grant using the Black-Scholes option-pricing model with the following assumptions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>14</FONT></P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>


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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine months Ended</font><br> <font size=2>March 31,</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:2.0pt'><font size=2>2007<sup>(1)</sup></font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="11.5%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="11.5%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Dividend Yield</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>0%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&#150;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>0%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>0%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Volatility %</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>60.49%</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>&#150;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>61.65%</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>67.89%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Risk-Free Interest Rate</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>3.04%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>&#150;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>4.14%</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>4.62%</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:1.9pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Expected Life</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>6.59 years</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>&#150;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>6.45 years</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-right:.12in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>6.63 years</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:2pt; margin-top:1pt; margin-left:0.2in;text-align:justify;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=2>&nbsp;</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:8.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=top style='padding:0in 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td  valign=top style='padding:0in 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>No options were granted in the three months ended March 31, 2007.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>To determine expected volatility, ECD uses historical volatility based on daily closing prices of its common stock over periods that correlate with the expected terms of the options granted.  The risk-free rate is based on the United States Treasury seven-year Constant Maturity Rate.  The Company has not paid dividends in the past and does not plan to pay any dividends in the foreseeable future.  The expected term of stock options is based on the vesting term of the options and expected exercise behavior.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>ECD has three shareholder-approved plans: the 1995 Non-Qualified Stock Option Plan (the &#147;1995 Plan&#148;) pursuant to which 2,000,000 shares were reserved for grants, the 2000 Non-Qualified Stock Option Plan (the &#147;2000 Plan&#148;) pursuant to which 3,000,000 shares were reserved for grants, and the 2006 Stock Incentive Plan (the &#147;2006 Plan&#148;) pursuant to which 1,000,000 shares are reserved for grants.  ECD issues new shares to satisfy stock option exercises.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The 1995 Plan expired on January&nbsp;26, 2005 and no additional grants will be made under this Plan.  Effective November 14, 2006, the date ECD stockholders approved the 2006 Stock Incentive Plan, ECD will not grant any additional options under the 2000 Plan.  There are still outstanding options under each of these plans.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The 2006 Plan authorizes the grant of stock options, including nonqualified and incentive options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to officers, other employees, nonemployee directors, consultants, advisors, independent contractors and agents of ECD and its subsidiaries.  The Committee will determine the period during which an option may be exercised and the terms relating to the exercise or cancellation of an option upon a termination of employment or service, but no option shall fully vest in less than four years, with no more than 40% vesting in the first year following the award, no more than a total of 60% of the option vesting by the end of the second year following the award and no more than a total of 80% of the option vesting by the end of the third year following the award.  Each option will be
exercisable for no more than 10 years after its date of grant, except that an incentive option granted to a participant owning more than 10% of ECD&#146;s voting shares will be exercisable for no more than five years after its date of grant.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>15</FONT></P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Total net stock-based compensation expense is attributable to the granting of and the remaining requisite service periods of stock options previously granted.  </font></p>



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    <tr style='page-break-inside:avoid; '>
        <td colspan="25" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=2>Compensation Expense Attributable to Net Stock-Based Compensation</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" rowspan=2 valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Compensation</font><br> <font size=2>Expense</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="9" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Decrease in Earnings</font><br> <font size=2>Per Share</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="9" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Increase in Loss</font><br> <font size=2>Per Share</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Basic</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Diluted</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Basic</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>Diluted</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="22%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Three Months Ended:</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:35.3pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>615,000</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.02</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.02</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:35.3pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>290,000</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.01</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.01</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Nine Months Ended:</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:35.3pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,604,000</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.04</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.04</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:35.3pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,192,000</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.03</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="5%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>0.03</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:16pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March 31, 2008, the total unrecognized compensation cost related to nonvested stock options and grants was as follows:</font></p>



<div align=center>

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    <tr >
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="11%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
        <TD colspan=3 VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted average period</font><br> <font size=2>to be recognized</font></p> </td>

 </tr>

    <tr >
        <TD VALIGN="BOTTOM" WIDTH="40%">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Nonvested Stock Options</font></p> </td>
        <TD VALIGN="BOTTOM" WIDTH="1%">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" WIDTH="11%">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>1,652,274</font></p> </td>
        <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
        <TD VALIGN="BOTTOM" WIDTH="5%">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" WIDTH="10%">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>1.61 years</font></p> </td>
     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
 </tr>
    <tr >
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Nonvested Restricted Stock Grants</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>2,675,424</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>2.80 years</font></p> </td>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
 </tr>
    <tr >
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom:0pt'><font size=2>4,327,698</font></p> </td>
        <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
 </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2></font></p>

<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>16</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>


<p style=' margin-bottom:8pt; margin-top:0pt; margin-left:0.01in;text-indent:0.5in;text-align:justify;'><font size=2>A summary of the transactions during the three months ended March&nbsp;31, 2008, with respect to ECD&#146;s 1995, 2000 and 2006 Plans follows:</font></p>

<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="margin-left:1pt;border-collapse:collapse">
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Shares</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-</font><br> <font size=2>Average</font><br> <font size=2>Exercise</font><br> <font size=2>Price</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Aggregate</font><br> <font size=2>Intrinsic</font><br> <font size=2>Value<sup>(1)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-Average</font><br> <font size=2>Contractual Life</font><br> <font size=2>Remaining</font><br> <font size=2>in Years</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="37%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Outstanding at June 30, 2007</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>966,840</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>20.05</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>10,901,717</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>4.86</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Granted</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>110,000</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>27.88</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Exercised</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(103,277</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>20.09</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Forfeited</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1,200</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>50.16</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Expired</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(360</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>10.40</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Outstanding at December 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>972,003</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>20.90</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>12,781,228</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>5.21</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Granted</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>10,000</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>25.74</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Exercised</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(23,040</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>18.27</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Expired</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1,050</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>43.60</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font size=2>Outstanding at March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>957,913</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>20.99</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>9,143,059</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>5.12</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Exercisable at March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>813,698</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>19.52</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>8,689,339</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>4.38</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Exercisable at June 30, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>858,542</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>19.48</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>9,923,559</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:8.0pt;margin-bottom:0pt'><font size=2>4.46</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="99%" style='border-collapse:collapse'>
    <tr >
        <td width="29" valign=top style='padding:3.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The weighted average fair value of stock options granted and the total intrinsic value of stock options exercised during the three months and nine months ended March&nbsp;31, 2008 and 2007 were as follows:</font></p>


<div align=center>

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    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="40%" VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Weighted average fair value of <BR>options granted</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>154,843</font></p> </td>
        <TD WIDTH="3.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>2,054,034</font></p> </td>
        <TD WIDTH="3.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>330,417</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:21.3pt;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Total intrinsic value of stock <BR>options exercised</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>230,919</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>977,879</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>6,597,307</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>8,997,281</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following is a summary of the transactions during the nine months ended March&nbsp;31, 2008 with respect to Stock Option Agreements between ECD and Stanford R. Ovshinsky and Dr. Iris M. Ovshinsky dated November 18, 1993.  Upon the death of Dr. Ovshinsky in August 2006, and pursuant to the terms of the Stock Option Agreements and our stock option plans, options owned by Dr. Ovshinsky were transferred to her estate, of which Mr. Ovshinsky is the executor.</font></p>


<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>17</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<div align=left>

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    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Shares</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-</font><br> <font size=2>Average</font><br> <font size=2>Exercise</font><br> <font size=2>Price</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Aggregate</font><br> <font size=2>Intrinsic</font><br> <font size=2>Value<sup>(1)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-Average</font><br> <font size=2>Contractual Life</font><br> <font size=2>Remaining</font><br> <font size=2>in Years</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="37%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Outstanding and exercisable </font><br> <font size=2>at June 30, 2007</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>445,259</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>18.25</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>5,595,637</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>(2)</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Exercised</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(259,674</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>15.06</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Outstanding and exercisable </font><br> <font size=2>at March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>185,585</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="6%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>22.73</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>1,330,645</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:2pt; margin-top:0pt;text-align:left;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=2>&nbsp;</font></p>


<div align=left>

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        <TD WIDTH="29" VALIGN="TOP" STYLE="padding:3.0pt 0in 2.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:3.0pt 0in 2.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The intrinsic value of a stock option is the amount by which the market value as of the above dates for the underlying stock exceeds the exercise price of the option.</font></p> </td> </tr></table>
</div>



<div align=left>

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        <TD WIDTH="29" VALIGN="TOP" STYLE="padding:3.0pt 0in 8.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:3.0pt 0in 8.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Mr.&nbsp;Ovshinsky retired as an active employee and a director of ECD effective August&nbsp;31, 2007. The 171,713 shares owned by him are exercisable through August&nbsp;31, 2008. The 13,872 shares owned by the estate of Dr.&nbsp;Ovshinsky expire on August&nbsp;16, 2008.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following is a summary of the transactions during the nine months ended March&nbsp;31, 2008 with respect to a Stock Option Agreement between Robert C. Stempel and ECD entered into in January 1999:</font></p>
<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="margin-left:1pt;border-collapse:collapse">
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Shares</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-</font><br> <font size=2>Average</font><br> <font size=2>Exercise</font><br> <font size=2>Price</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Aggregate</font><br> <font size=2>Intrinsic</font><br> <font size=2>Value<sup>(1)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Weighted-Average</font><br> <font size=2>Contractual Life</font><br> <font size=2>Remaining</font><br> <font size=2>in Years</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="37%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Outstanding and exercisable </font><br> <font size=2>at June 30, 2007</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="8.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>180,000</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>10.688</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>3,623,760</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>1.55</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Exercised</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(60,000</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>10.688</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Outstanding and exercisable </font><br> <font size=2>at March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>120,000</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>10.688</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom:0pt'><font size=2>2,305,440</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:4.0pt;margin-bottom:0pt'><font size=2>0.79</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=2>&nbsp;</font></p>


<div align=left>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr >
        <TD WIDTH="29" VALIGN="TOP" STYLE="padding:2.0pt 0in 8.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:2.0pt 0in 8.0pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The intrinsic value of a stock option is the amount by which the market value as of the above dates for the underlying stock exceeds the exercise price of the option.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March 31, 2008 and June 30, 2007, there were 269,000 and 338,000, respectively, nonvested shares of restricted stock pursuant to a Restricted Stock Agreement dated January&nbsp;19, 1999, and amended as of September&nbsp;22, 2005, between Mr. Stempel and ECD with a weighted average grant date fair value of approximately $2,875,072 and $3,612,544, respectively. The vesting schedule provides for quarterly vesting of 23,000 shares at the beginning of each quarter
commencing July&nbsp;1, 2006 through October 1, 2010 with 16,000 shares vesting on December 31, 2010.</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>18</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>


<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>As part of the executive changes in August 2007, the vesting of certain stock options owned by Mr. Ovshinsky and Mr. Stempel was accelerated.  As a result of this acceleration of vesting, approximately $258,000 was recorded as a restructuring charge in the nine months ended March 31, 2008.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><i><font size=2>Restricted Stock Awards</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The fair value of restricted stock awards (RSAs) is determined on the date of grant based on the market price of ECD&#146;s common stock.  The fair value of the RSAs is recognized as compensation expense.  The value of RSAs granted to employees is amortized over their three-year vesting period; the value of restricted stocks granted to nonemployee directors is amortized over a two- to nine-year vesting period.  The following table provides information on the RSAs granted as of March 31, 2008:</font></p>

<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="margin-left:1pt;border-collapse:collapse">
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            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom:3.0pt'><font size=2>Grant Date</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="2" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=2>Shares</font><u></u></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=2>Grant Date</font><br> <font size=2>Fair Value</font><u></u></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:3.0pt'><font size=2>Total Valuation</font><u></u></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="34%" VALIGN="BOTTOM">
            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:5.0pt;margin-bottom: 3.0pt'><font size=2>May 2, 2007</font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 3.0pt'><font size=2>23,352</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=2><sup>(1)</sup></font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 3.0pt'><font size=2>35.92</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 3.0pt'><font size=2>838,804</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>September 1, 2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>60,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2><sup>(2)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>25.91</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>1,554,600</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>December 11, 2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>15,546</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2><sup>(3)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>29.82</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>463,582</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>December 24, 2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>10,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>35.45</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>354,500</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>February 5, 2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>3,720</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2><sup>(3)</sup></font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>24.20</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 3.0pt'><font size=2>90,024</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:3.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:20.0pt;text-indent:-.25in;text-align:left;margin-top:3.0pt;margin-bottom: 1.0pt'><font size=2>March 20, 2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 1.0pt'><font size=2>2,500</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 1.0pt'><font size=2>25.19</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 1.0pt'><font size=2>62,975</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.07in;text-align:left;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:4.0pt;margin-bottom: 5.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:4.0pt 0in 4.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td  valign=top style='padding:4.0pt 0in 4.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>In February 2008, one-third of the RSAs (2,784 shares) granted to James Metzger, former chief operating officer, in May 2007 were vested pursuant to the terms of his retirement agreement. </font></p> </td> </tr></table>
</div>

<div align=left>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:4.0pt;margin-bottom: 5.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:4.0pt 0in 4.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
        <td  valign=top style='padding:4.0pt 0in 4.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>RSA granted to Mark D. Morelli, the Company&#146;s President and CEO, 30,000 shares of which vest on the earlier of the third anniversary of the grant date or the twentieth consecutive trading day on which the average closing price of ECD&#146;s common stock on Nasdaq exceeds $50.00.</font></p> </td> </tr></table>
</div>

<div align=left>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:4.0pt;margin-bottom: 8.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:4.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(3)</font></p> </td>
        <td  valign=top style='padding:4.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>RSAs granted to nonemployee directors representing annual Compensation and Committee Chair fees. In August 2007, the Compensation Committee of ECD&#146;s Board of Directors restructured nonemployee compensation to closely align with the long-term interest of the Company and its stockholders. Effective December 11, 2007, the meeting fees were eliminated and the nonemployee directors were paid an annual retainer of $90,000 payable in restricted stock, with each director having the option to receive up to 40% of such amount in cash.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>19</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:left;'><i><font size=2>Warrants</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008, ECD had outstanding a warrant for the purchase of 400,000 shares of Common Stock granted pursuant to a Common Stock Warrant Agreement entered into in March&nbsp;2000.  This warrant is exercisable on or prior to March&nbsp;10, 2010 at $22.93 per share.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Basic and Diluted Net Income (Loss) Per Share</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding.  ECD uses the treasury stock method to calculate diluted earnings per share.  Potential dilution exists from stock options and warrants.  Weighted average number of shares outstanding and basic and diluted net income (loss) per share for the three months and nine months ended March&nbsp;31, 2008 and 2007 are computed as follows:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <TR STYLE="page-break-inside:avoid;">
        <TD WIDTH="40.7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Net income (loss)</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>6,974,139</font></p> </td>
        <TD WIDTH="5.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(6,871,270</font></p> </td>
        <TD WIDTH="7%" VALIGN="top">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(6,018,635</font></p> </td>
        <TD WIDTH="5.5%" VALIGN="top">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:2.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(12,085,998</font></p> </td>
        <TD WIDTH="1%" VALIGN="top">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.1in;text-indent:-.1in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Weighted average number of shares outstanding:</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:28.1pt;text-indent:-10.1pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>&#150;&nbsp;&nbsp;for basic net income (loss) </font><br> <font size=2>per share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>40,317,300</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>39,517,400</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>40,099,639</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>39,294,971</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:28.1pt;text-indent:-10.1pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>&#150;&nbsp;&nbsp;for diluted net income (loss)</font><br> <font size=2>per share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>40,719,346</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>39,517,400</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>40,099,639</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>39,294,971</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Basic net income (loss) per share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:1.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.17&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.27pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.17)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.7pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.15)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.7pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.31)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>Diluted net income (loss) per share</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:1.25pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.17&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.7pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.17)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.7pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.15)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:2.27pt;text-align:right;margin-top:4.0pt;margin-bottom: 1.0pt'><font size=2>&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(.31)&nbsp;&nbsp;&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:1.0pt'><font size=2>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:15pt; text-indent:0.5in;text-align:justify;'><font size=2>Due to the Company&#146;s net loss, the 2008 weighted average shares of potential dilutive securities of 529,806 shares for the nine months ended March&nbsp;31, 2008 were excluded from the calculations of diluted loss per share, as inclusion of these securities would have been antidilutive to the net loss per share.  Additionally, securities of 93,295 shares and 48,709 shares for the three and nine months ended March&nbsp;31, 2008, respectively, were excluded from the 2008 calculations, as these securities would have been antidilutive regardless of the Company&#146;s net income or loss.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Due to the Company&#146;s net losses, the 2007 weighted average shares of potential dilutive securities of 1,003,898 shares and 1,160,768 shares were excluded from the calculations of diluted loss per share for the three months and nine months ended March&nbsp;31, 2007, respectively, as inclusion of these securities would have been antidilutive to the net loss per share.  Additional securities of 13,684 shares and 10,531 shares for the three and nine months ended March&nbsp;31, </font></p>

<p style=' margin-bottom:0pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>20</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>


<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>2007, respectively, were excluded from the 2007 calculations, as these securities would have been antidilutive regardless of the Company&#146;s net income or loss.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Use of Estimates</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (&#147;U.S. GAAP&#148;) requires management to make estimates and assumptions that affect amounts reported therein.  Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Preproduction Costs</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company recognizes in its Consolidated Statements of Operations costs in preparation for its new manufacturing facilities and equipment as preproduction costs.  These costs include training of new employees, supplies and other costs for the new manufacturing facilities in advance of the commencement of manufacturing.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Recent Pronouncements</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In September 2006, the FASB issued SFAS No. 157, &#147;Fair Value Measurements,&#148; which defines fair value and establishes a framework for measuring fair value.  SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information.  This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007.  The Company is currently assessing the potential impact that the adoption of SFAS No. 157 will have on its financial statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In February 2007, the FASB issued SFAS No. 159, &#147;The Fair Value Option for Financial Assets and Financial Liabilities.&#148;  This statement permits entities to choose to measure many financial instruments and certain other items at fair value.  This statement is effective as of the beginning of an entity&#146;s first year that begins after November 15, 2007.  The Company is currently assessing the potential impact that the adoption of SFAS No. 159 will have on its financial statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In June 2007, the FASB Emerging Issues Task Force (&#147;EITF&#148;) reached a consensus that EITF Issue No.</font><b><font size=2> </font></b><font size=2>07-3, &#147;Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities&#148; is effective for financial statements issued for fiscal years beginning after December 15, 2007, and interim periods within those fiscal years.  Earlier application is not permitted.  EITF Issue No. 07-3 requires that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized.  Such amounts should be </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>21</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>recognized as an expense as the goods are delivered or the related services are performed.  This pronouncement is expected to have no impact on the Company&#146;s financial statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>On December 4, 2007, the FASB issued FASB Statement No. 160, &#147;Noncontrolling Interests in Consolidated Financial Statements &#150; An Amendment of ARB No. 51.&#148;  Statement 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent&#146;s equity.  The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement.  Statement 160 clarifies that changes in a parent&#146;s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest.  In
addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated.  Such gain or loss will be measured using the fair value of the noncontrolling equity investment on the deconsolidation date.  Statement 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest.  Statement 160 is effective for fiscal years, and interim periods with those fiscal years, beginning on or after December 15, 2008.  Earlier adoption is prohibited.  The Company is currently assessing the potential impact that the adoption of this Statement will have on its financial statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>Restructuring Charges and Assets Held for Sale</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Through March 31, 2008, pursuant to our restructuring plan, we have implemented the plan for consolidating the photovoltaics and machine-building activities into United Solar and reduced costs in both the Ovonic Materials segment and in Corporate Activities.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Given the reduced scope of our research and development activities as a result of our restructuring efforts, we are reviewing our current facilities infrastructure with a view to consolidate these facilities.  Once these decisions have been made, we may be recording additional restructuring charges.  We estimate that restructuring costs to be incurred in the three months ending June 30, 2008 will range between $2,000,000 and $3,000,000, depending on the results of our facilities review.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company recorded restructuring charges, representing expenses incurred in connection with its restructuring and succession plan, totaling $2,386,000 (or $.06 per share) and $7,457,000 (or $.19 per share) for the three and nine months ended March&nbsp;31, 2008, respectively.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In addition, as part of the restructuring, the Company will no longer be using its Wafer Lab equipment.  This equipment, with a net book value of approximately $1,539,000, is currently classified as </font><i><font size=2>Assets Held for Sale </font></i><font size=2>and the Company is in negotiations with interested parties for </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>22</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE A &#150; Summary of Accounting Policies (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>the sale of this equipment at a sale price of equal to, or more than, the net book value of this equipment.</font></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following summarizes activity in the Company&#146;s restructuring reserve through March&nbsp;31, 2008.</font></p>


<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="4" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Employee-Related</font><br> <font size=2>Expenses</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Other Expenses</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Total</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="40%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Balance July 1, 2007</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="11%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>2,883,734</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="11%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>746,900</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="11%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>3,630,634</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:26.65pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Charges</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,979,306</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,477,539</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,456,845</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:26.65pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Utilization or payment</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(4,812,269</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(4,103,658</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(8,915,927</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>March 31, 2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,050,771</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>120,781</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>2,171,552</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:26.65pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Less current portion</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(1,766,647</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Long-term portion</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>404,905</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<A name="tocf">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:16pt;text-align:left;'><u><font size=2>NOTE B &#150; Accounts Receivable</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Accounts Receivable consist of the following:</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>March 31,</font><br> <font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>June 30,</font><br> <font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD WIDTH="57%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=2>Billed</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="7%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Trade</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>37,485,879</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>27,827,263</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=2>Related parties</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>183,286</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>322,105</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=2>Other</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>3,681,779</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:97.2%'><font size=2>2,248,228</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:69.85pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Subtotal</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>41,350,944</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>30,397,596</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Unbilled</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Trade</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>266,876</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,544,162</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=2>Related parties</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>74,329</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>85,905</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:43.9pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt;line-height:97.2%'><font size=2>Other</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,386,133</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,007,912</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:69.85pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Subtotal</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,727,338</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>6,637,979</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Less allowance for uncollectible accounts</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(874,000</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>(538,000</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>44,204,282</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>36,497,575</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>23</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<A name="tocg">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE C &#150; Inventories</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Inventories of raw materials, work in process and finished goods for the manufacture of solar cells and nickel hydroxide are valued at the lower of cost (first in, first out) or market.  Cost elements included in inventory are materials, direct labor and manufacturing overhead.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Inventories (substantially all for United Solar) are as follows:</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" STYLE="border-collapse:collapse;">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>March 31,</font><br> <font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>June 30,</font><br> <font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="42%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:5.0pt;margin-bottom: 2.0pt'><font size=2>Finished products</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 2.0pt'><font size=2>2,766,232</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="12%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:5.0pt;margin-bottom: 2.0pt'><font size=2>16,399,784</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Work in process</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>13,550,924</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,495,945</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Raw materials</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>15,914,759</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>16,796,449</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>32,231,915</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>38,692,178</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The above amounts include an allowance for slow-moving inventory of $3,663,000 and $1,870,000 as of March&nbsp;31, 2008 and June 30, 2007, respectively.</font></p>

<A name="toch">&nbsp;</A>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE D &#150; Joint Ventures and Investments</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Joint Ventures</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><font size=2>Cobasys</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company recognized $238,000 and $714,000 as revenues from license agreements in each of the three and nine months ended March&nbsp;31, 2008 and 2007, respectively, in connection with the amortization of a license fee received in July 2004 from Panasonic EV Energy Co., Ltd. as part of a settlement of a certain patent infringement dispute.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company recorded revenues from Cobasys of $186,000 and $413,000 for the three and nine months ended March&nbsp;31, 2008, respectively, and $222,000 and $664,000 for the three and nine months ended March 31, 2007, respectively, for services performed on behalf of Cobasys (primarily for advanced product development testing and other services).</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>Ovonyx</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008, ECD owns 39.3% (or 30.7% on a fully diluted basis after giving effect to exercise of stock options and warrants) of Ovonyx, Mr. Tyler Lowrey and a colleague own 39.3%, and Intel Capital and other investors own the remainder of the shares outstanding.  In addition to its equity interest, ECD also receives 0.5% of the Ovonyx annual gross revenues which it recognizes as royalty revenue.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>24</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE D &#150; Joint Ventures and Investments (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>ECD recorded nonroyalty revenues from Ovonyx of $48,000 and $175,000 for the three and nine months ended March&nbsp;31, 2008, respectively, and $199,000 and $539,000 for the three and nine months ended March&nbsp;31, 2007, respectively, representing services provided to this joint venture.</font></p>


<A name="toci">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE E &#150; Liabilities</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Warranty Liability</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company estimates the liability for product warranty costs based upon its past experience and best estimate of future warranty claims.  The following is a summary of the changes in the product warranty liability during the nine months ended March&nbsp;31, 2008 and 2007:</font></p>

<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" STYLE="border-collapse:collapse; margin-left:1in;">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="60%" VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Liability at beginning of the period</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>1,325,452</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>1,835,136</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Amounts accrued for as warranty costs</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>343,468</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(369,505</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)<sup>(1)</sup></font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Warranty claims</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(175,973</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(171,072</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:19.0pt;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Liability at end of period</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,492,947</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,294,559</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:1pt; margin-top:0pt; margin-left:1in;text-align:justify;'><u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


<div align=left>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse; margin-left:1in;">
    <tr >
        <td width="25" valign=top style='padding:1.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td  width="510" valign=top style='padding:1.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>During the nine months ended March 31, 2007, the Company, based upon information available at the time, revised its estimate of the warranty accrual in connection with its Rare Earth Ovonic joint venture and recorded a $750,000 reduction in this accrual.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>Government Contracts, Reserves and Liabilities</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company&#146;s contracts with the U.S. Government and its agencies are subject to audits by the Defense Contract Audit Agency (&#147;DCAA&#148;).  DCAA has audited the Company&#146;s indirect rates, including its methodology of computing these rates, for the years through June&nbsp;30, 2004.  In its reports, DCAA questioned the allowability of and the allocability of certain costs as well as the Company&#146;s methodology for allocating independent research and development to its indirect cost pools.  The Company has a reserve of $1,787,000 and $1,899,000 at March&nbsp;31, 2008 and at June&nbsp;30, 2007, respectively.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In connection with a 1992 battery development contract with the United States Advanced Battery Consortium (&#147;USABC&#148;), partially funded by the Department of Energy (&#147;DOE&#148;), the Company has agreed to reimburse USABC and DOE for payments to the Company under the 1992 contract.  The agreed reimbursement includes a 15% share of royalty payments the </font></p>


<p style=' margin-bottom:0pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>25</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE E &#150; Liabilities (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2>Company receives through May&nbsp;3, 2012 where Ovonic NiMH batteries serve as the primary source of power for electric vehicles.  The Company has accrued as an expense 15% of such royalty payments.</font></p>


<A name="tocj">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>NOTE F &#150; Lines of Credit</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008, the Company had a line of credit with LaSalle Bank Midwest N.A. in the amount of $5,000,000.  This line of credit provides a mechanism for obtaining letters of credit and entering into foreign exchange transactions.  The line of credit, which expires on August&nbsp;31, 2008, requires maintaining a $5,000,000 minimum investment balance.  At March&nbsp;31, 2008, the Company had outstanding letters of credit of $2,161,000 against the line of credit.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Effective February 2008, ECD, as Loan Guarantor, and United Solar Ovonic LLC and United Solar Ovonic Corporation (collectively, the &#147;Borrowers&#148;), entered into a new secured credit facility, with an aggregate commitment of up to $55,000,000, pursuant to a Credit Agreement and a Fast Track Export Loan Agreement with JPMorgan Chase Bank, N.A.  The new credit facility is comprised of two separate lines of credit, a $30,000,000 line (the &#147;Asset Based Revolver&#148;) and a $25,000,000 line (the &#147;Ex-Im Revolver&#148;).  Both lines are secured by inventory and receivables of the Borrowers.  The credit facility has, among others, a financial covenant which requires the company to maintain a minimum liquidity of $10&nbsp;million at all times.  Liquidity is defined as the sum of (a) cash (b) the market value of cash equivalents, (c) liquid investment securities and (d) aggregate
borrowing availability under the facility.</font></p>

<A name="tock">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>NOTE G &#150; Commitments</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March 31, 2008, the Company had purchase commitments of approximately $49,642,000 related to its previously announced goal of expanding United Solar&#146;s manufacturing capacity to 300MW by 2010.  The Company presently intends to fund this additional expansion through existing funds and cash from operations.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><i><font size=2>Purchase Commitment</font></i><font size=2>.  In December 2007, the Company entered into a purchase agreement for germane gas totaling $8,458,000 for certain of its facilities.  The agreements are effective through December 2008.  The agreements require the Company to purchase a committed amount of germane gas at a monthly fixed price, which the Company believes it will consume in its normal course of operations during the period January through October 2008.</font></p>



<p style=' margin-bottom:0pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>26</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<A name="tocl">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><font size=2>NOTE H &#150; Royalties, Nonrefundable Advance Royalties and License Agreements</font></u></p>

<p style=' margin-bottom:6pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company has business agreements with third parties and with related parties for which royalties and revenues are included in its Consolidated Statements of Operations.  At each of March&nbsp;31, 2008 and June 30, 2007, the Company deferred recognition of revenue in the amount of $245,660 relating to nonrefundable advance royalty payments.</font></p>


<A name="tocm">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE I &#150; Business Segments</font></u></p>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table summarizes the financial data (in thousands) of the Company&#146;s operations by business segments:</font></p>

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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>United Solar</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Ovonic</font><br> <font size=2>Materials</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Corporate</font><br> <font size=2>Activities</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Consolidated</font></p> </td> </tr>
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            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Three months ended</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>66,736</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,178</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>253</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(185</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>69,982</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>23,841</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,442</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>291</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(145</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>27,429</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Nine months ended</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>160,343</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,840</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>797</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(507</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>173,473</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>66,895</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>10,263</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>890</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(489</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>77,559</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.15in;text-indent:-.15in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Income (Loss) from Operations</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Three months ended</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>13,735</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>940</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(9,175</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>72</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,572</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>518</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(4,185</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(6,796</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(517</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(10,980</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Nine months ended</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>15,352</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>639</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(27,983</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>154</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(11,838</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,870</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(10,957</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(16,527</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1,585</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(26,199</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Depreciation Expense</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Nine months ended</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>14,326</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>242</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>631</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(140</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>15,059</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>6,633</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,099</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>571</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(45</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>8,258</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Capital Expenditures</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.2in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=2>Nine months ended</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:3.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>88,251</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>515</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>88,768</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>139,421</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,537</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>127</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1,664</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>139,421</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Identifiable Assets</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2008</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>513,490</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,864</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>111,251</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(25,461</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>605,144</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.3in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>March 31, 2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>352,406</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,939</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>277,531</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(25,188</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>612,688</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>27</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE I &#150; Business Segments (Continued)</font></u></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table presents revenues (in thousands) by country based on the location of the customer:</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent: -.25in;text-align:justify;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="5" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0pt'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="27%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>United States</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>28,262</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>14,644</font></p> </td>
        <TD WIDTH="8%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>76,884</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>40,027</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>France</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>17,046</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>8</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>22,839</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>381</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Germany</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,458</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,210</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>24,702</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>20,247</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Italy</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>6,962</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,843</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>20,676</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,738</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>South Korea</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,305</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>11,595</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Japan</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,520</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>967</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,942</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,824</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Hong Kong</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>667</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>960</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,328</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,934</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>China</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>205</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>388</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,591</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>462</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:justify;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other Countries</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,557</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,407</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,916</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,944</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent: -.25in;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>69,982</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>27,429</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>173,473</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>77,559</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008 and June&nbsp;30, 2007, the composition of the Company's property, plant and equipment, net of accumulated depreciation, is principally in the United States.</font></p>

<A name="tocn">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:left;'><u><font size=2>NOTE J &#150; Income Taxes</font></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In the first quarter of fiscal 2008, the Company adopted FASB Interpretation No. 48 (&#147;FIN 48&#148;), &#147;Accounting for Uncertainty for Income Taxes &#150; an interpretation of FASB Statement No. 109&#148;.  FIN 48 prescribes a recognition threshold and measurement methodology for recording within the financial statements uncertain tax positions taken, or expected to be taken, in tax returns.  It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure related to uncertain tax positions.  The cumulative effect of implementing FIN 48 as of July&nbsp;1, 2007 was zero.  The Company has no unrecognized tax benefits at this time.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company files U.S. federal, state and foreign income tax returns.  Due to its net operating loss carryforwards, federal income tax returns from fiscal 1993 forward are still subject to examination.  In addition, open tax years related to various state and foreign jurisdictions remain subject to examination.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>28</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>
<A name="toco">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE K &#150; Litigation</font></u></p>


<p style=' margin-bottom:8pt; margin-top:8pt;text-indent:0.5in;text-align:justify;'><FONT SIZE="2"><I>Cobasys</I>.  As previously reported in our first and second quarter reports on Form 10-Q, on September 10, 2007, CTV issued a notice of
dispute and filed claims in arbitration against ECD and OBC relating to our Cobasys joint venture. CTV&#146;s original arbitration claim seeks damages and injunctive and other relief and alleges that ECD and OBC breached and anticipatorily repudiated obligations to
provide certain funding to Cobasys under the Amended and Restated Operating Agreement dated as of December 2, 2004 among us, OBC and CTV (the "Operating Agreement"), which governs Cobasys. CTV subsequently filed a supplemental notice of dispute amending its claims
to assert that ECD and OBC had dishonored CTV's preferred interest in Cobasys and that OBC had breached its obligation to use diligent efforts to approve a 2008 annual budget for Cobasys. We and OBC have denied CTV&#146;s allegations and filed a counterclaim,
seeking damages and injunctive and other relief on the ground that CTV has been acting unilaterally and in violation of the Operating Agreement and applicable Michigan law in regard to the funding and spending provisions of the Agreement.
</FONT></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>We and OBC dispute and have been vigorously defending the claims asserted by CTV and have pursued our counterclaim. In our
view, the Operating Agreement is clear that we and OBC have no present obligation to provide funding to Cobasys; OBC is not in default of the Operating Agreement; any future funding obligation would arise only upon unanimous approval by Cobasys&#146; members, OBC
and CTV, of (i) a 2008 budget and operating plan for Cobasys, and (ii) agreed capital contributions by the members; and CTV has no right unilaterally to provide funding or to authorize spending by Cobasys without an approved 2008 budget and operating plan, or
otherwise as approved by OBC. In our view, the Operating Agreement is also clear that we and OBC have not dishonored CTV&#146;s preferred interests; OBC has an unqualified right to refuse to sell its interests in Cobasys on terms that it does not consider appropriate;
and OBC may determine in its discretion whether to approve any sale of Cobasys or sale of CTV&#146;s interests in Cobasys.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The members of Cobasys have not approved a 2008 business plan and budget, and CTV and OBC have not been able to agree on a
solution to Cobasys&#146; business issues or whether Cobasys should continue as a going concern if it cannot be sold in the near future.  Cobasys had losses of approximately $76 million and obtained funding of approximately $84 million in 2007, and in January 2008
Cobasys management forecast losses of approximately $82-86 million and funding requirements of approximately $92-94 million for 2008. Until September 2007, CTV historically funded Cobasys&#146; loss-generating operations through the purchase of preferred interests.
From October 2007 through January 2008, CTV declined to purchase preferred interests and funded Cobasys in a manner that in OBC&#146;s view violated the Operating Agreement and applicable Michigan law. Since February 2008, Cobasys has received funding support from a
customer in the form of a loan for capital equipment purchases and a price increase on products sold to the customer. While Cobasys has been receiving this funding support from its customer, Cobasys management has not sought any funding from the members of
Cobasys. There is no assurance that this customer funding support will continue on these or other terms or otherwise be sufficient to permit Cobasys to continue as a going concern.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>29</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><font size=2>ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES</font></p>

<p style=' margin-bottom:4pt; margin-top:4pt;text-align:center;'><font size=2>Notes to Consolidated Financial Statements</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:left;'><u><font size=2>NOTE K &#150; Litigation (Continued)</font></u></p>



<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The arbitrator held a hearing in January 2008 on our and OBC&#146;s application for partial judgment on the pleadings seeking to
dismiss CTV&#146;s initial and amended claims and CTV&#146;s request for declaratory relief, seeking an order declaring that OBC and ECD must meet their alleged funding obligations and not block a sale of Cobasys by dishonoring CTV's preferred interest.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>After this hearing, but before receiving the arbitrator&#146;s ruling, on February 15, 2008 the parties entered into an interim
settlement agreement providing for a suspension of the arbitration, a deferral of the arbitrator&#146;s ruling, and a requirement of the parties to use their commercially reasonable best efforts to negotiate definitive agreements for the sale of Cobasys based on a
non-binding proposal received from a potential buyer. The terms of the interim settlement also provide for an agreed allocation of the proceeds of this sale, an agreed distribution of certain royalty rights, a restructuring of Cobasys&#146; intellectual property assets
with certain rights reverting to OBC, and require dismissal of the arbitration with prejudice and a settlement and mutual release of Cobasys-related claims in the event that the sale is completed prior to a mutually agreed deadline. Sale negotiations have been
ongoing among us, OBC, CTV and the potential buyer and, since the interim settlement agreement was entered into, the parties to the arbitration have on seven occasions during the negotiation process amended the agreement to extend the deadline for timely
consummation. There is no assurance that the sale will be completed or that the arbitration will be settled as contemplated by the interim settlement agreement. If the sale of Cobasys does not close by the current deadline and the interim settlement is not
extended, we, OBC or CTV could resume the arbitration and cause the arbitrator&#146;s ruling on our and OBC&#146;s application for partial judgment on the pleadings to be issued. There is no assurance that the arbitrator&#146;s ruling would be favorable to us and OBC.
</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>International Acquisitions Services, Inc. (&#147;IAS&#148;), Innovative Transportation Systems AG (&#147;ITS&#148;) and Neville Chamberlain filed suit against Energy Conversion Devices, Inc. (&#147;ECD&#148;) in Nassau County, New York on October 11, 2007, claiming, among other things, that ECD made fraudulent statements relating to the supply of battery products to ITS, an entity created to manufacture and sell an electric delivery vehicle known as the InnoVan.&nbsp; Chamberlain, a sophisticated investor, invested in ITS through IAS.  ECD also invested in ITS.  ECD disputes and is vigorously defending these claims.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>30</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<A name="tocq">&nbsp;</A>
<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="92%" style='border-collapse:collapse'>
    <tr >
        <td width="10%" valign=top style='padding:8.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Item 2.</font></b></u></p> </td>
        <td  width="90%" valign=top style='padding:8.0pt 0in 8.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</font></b></u></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>This section summarizes significant factors affecting the Company&#146;s consolidated operating results, financial condition and liquidity for the three months and nine months ended March&nbsp;31, 2008 and 2007. This section should be read in conjunction with the Company&#146;s Consolidated Financial Statements and related Notes appearing elsewhere in this report and the Company&#146;s filed Annual Report on Form 10-K for the year ended June&nbsp;30, 2007.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><b><font size=2>Overview</font></b></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>We commercialize materials, products and production processes for the alternative energy generation, energy storage and information technology markets.  We design, manufacture and market our </font><i><font size=2>UNI-SOLAR&reg; </font></i><font size=2>thin-film, lightweight, flexible photovoltaic (&#147;PV&#148;) laminates, which we believe offer differentiated value proposition to meet the needs of the global commercial rooftop market.  We also manufacture and sell positive electrode nickel hydroxide battery materials, and license our nickel metal hydride (&#147;NiMH&#148;) battery technology, which is used in commercial products.  Our principal joint ventures &#150; Cobasys LLC and Ovonyx, Inc. &#150; are commercializing our NiMH battery and Ovonic Universal Memory (&#147;OUM,&#148; also referred to as &#147;PRAM&#148;) technologies, respectively.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>For the three months ended March 31, 2008, we had consolidated net income of $7&nbsp;million, a significant corporate profitability milestone, due to the performance of our United Solar segment.  Revenues and production increased in this segment, and gross margin improved to over 30%, which the Company believes is sustainable.  Income was impacted by restructuring costs, which are included in Corporate Activities.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our business activities represent application of our overall business strategy to commercialize our materials, products and production processes internally and through third-party relationships, such as licenses and joint ventures.  Accordingly, our results reflect our approach to commercialization of a particular technology, as well as the commercial readiness of that technology, and consideration should be given to the following key factors when reviewing our results for the periods discussed:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>We are engaged in full-scale manufacturing and sale of our PV products through our United Solar segment, and our consolidated financial results are driven primarily by the performance of this segment</font></i><font size=2>.  Our United Solar segment accounted for 95% and 92% of our total revenue in the three and nine months ended March&nbsp;31, 2008, respectively, and accounted for 87% and 86% of our total revenue in the three and nine months ended March&nbsp;31, 2007, respectively.  Our United Solar segment generated operating income of $13.7&nbsp;million in the three months ended March 31, 2008 and $15.3 million for the nine months year to date, while our Ovonic Materials segment had an operating income of $0.9&nbsp;million and $0.6&nbsp;million in the three and nine months ended March&nbsp;31, 2008, respectively; our
Corporate Activities segment, which includes corporate operating, general and administrative expenses, had a net expense of $9.2&nbsp;million (including restructuring costs of $2.4&nbsp;million) for the three months and $28.0&nbsp;million </font></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; margin-left:0.75in;text-align:justify;'><font size=2>(including restructuring costs of $7.5&nbsp;million) for the nine months ended March&nbsp;31, 2008.  Given the expected growth of our photovoltaic business (as discussed below) relative to our other business activities, our overall success in the foreseeable future will be aligned primarily with the performance of our United Solar segment and subject to the risks of that business.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>We are expanding manufacturing capacity for our PV products to meet the rapid growth in the alternative energy generation market in general and the solar market in particular</font></i><font size=2>.  We are increasing our manufacturing capacity from the current 118MW by an additional 60MW in the first half of fiscal 2009.  The Company has also announced plans to increase nameplate manufacturing capacity by an additional 120MW, increasing future solar manufacturing capacity to approximately 300MW by 2010.  We presently intend to fund this additional expansion through existing funds and cash flow from operations.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>We are aggressively pursuing cost reduction and efficiency improvement initiatives to enhance our competitiveness, as competition grows, and pricing pressures increase, in the solar market</font></i><font size=2>.  We and other PV manufacturers are expanding PV manufacturing capacity, and new manufacturers are initiating production, to meet the rapidly increasing global demand for PV systems.  We are currently working on cost reductions for future machines.  In addition, we are continuing to implement our plans for cost reductions in our raw materials and a program to increase our yields. We have reorganized our sales and marketing functions and are focusing on the markets and customers best served by our differentiated products.  We are also expanding our sales and marketing teams in the United States and Europe to
increase our sales to match our expanding production capacity.  These initiatives are expected to offset the pricing pressures in the near term and attain cost competitiveness with traditional energy sources in the longer term.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>We are commercializing our NiMH battery and OUM technologies principally through unconsolidated joint ventures, and we account for our interests in these joint ventures under the accounting model based on the equity method of accounting</font></i><font size=2>.  Our principal joint ventures &#150; Cobasys and Ovonyx &#150; were founded upon technologies that we pioneered to further develop and commercialize these technologies. In each case, we participate in the business as equity holders but do not directly manage or have a controlling interest in the entity. We have not reported any earnings or losses from Cobasys because our only contributions to Cobasys have been noncash items, including intellectual property and know-how.  We do record royalties from Ovonyx representing 0.5% of their total revenues.  These royalties
were $17,000 and $47,000, respectively, for the three and nine months ended March&nbsp;31, 2008 and $8,000 and $40,000, respectively, for the three and nine months ended March&nbsp;31, 2007.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>The members of Cobasys have agreed to explore strategic alternatives regarding Cobasys</font></i>.&nbsp;&nbsp;<font size=2>In 2007, the members of Cobasys agreed to explore strategic alternatives regarding Cobasys.
At the same time, as previously reported, certain disputes relating to Cobasys are the subject of pending arbitration, and Cobasys and its members have
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>not agreed on a 2008 budget and/or business plan.  On February 15, 2008 the parties entered into an interim settlement agreement providing for a
suspension of the arbitration and a requirement of the parties to use their commercially reasonable best efforts to negotiate definitive agreements for the sale of Cobasys based on a non-binding proposal received from a potential buyer. These sale negotiations have been ongoing, but we cannot assure that the proposed sale will be completed by the current deadline under
our interim settlement agreement, if at all, or on terms favorable to us and OBC. If the proposed sale is not completed, without an agreed budget and business plan for 2008 and resolution of pending disputes subject to the arbitration between us and OBC and CTV, Cobasys may not be able to continue as a going concern. See Part II, Item 1 &#150; Legal Proceedings and Item 1A &#150; Risk Factors.
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>We are developing certain of our emerging technologies with the intent to bring these technologies to commercialization success or, alternatively, to monetization.  These development activities, which have historically generated losses, have been substantially reduced and balanced to sustainable levels as part of a restructuring plan</font></i><font size=2>.  We have successfully brought our PV and NiMH technologies from pioneering technologies to commercial products, and Ovonyx has been collaborating successfully with a number of semiconductor companies to commercialize OUM. We plan a similar strategy for our current emerging technologies.  As part of the restructuring plan (discussed below), these development activities have been substantially reduced and balanced with external sources of revenues, such as royalties, and
development agreements (principally government contracts) to realign development commercialization efforts at sustainable levels.  Additionally, we are seeking third-party investments and are re-evaluating our emerging technologies to ensure that they are properly prioritized with these goals.</font></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><i><font size=2>Key Indicators of Financial Condition and Operating Performance</font></i><font size=2>.  In evaluating our business, we use product sales, gross profit, pre-tax income, earnings per share, net income, cash flow from operations and other key performance metrics. We also use production, measured in megawatts (&#147;MW&#148;) per annum, and gross margins on product sales as key performance metrics for our United Solar segment, particularly in connection with the manufacturing expansion in this segment.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In April 2007, we began implementing an organizational restructuring to consolidate and realign our business activities and reduce costs, including consolidating the photovoltaics and machine-building activities into the United Solar segment and reducing costs in both the Ovonic Materials segment and in Corporate Activities.  We have incurred total restructuring costs of $12.8&nbsp;million through March 31, 2008.  We are presently evaluating our facilities infrastructure requirements based on our consolidated and realigned business activities to identify additional cost savings opportunities and may undertake additional restructuring activities, and record additional restructuring charges, as a result.</font></p>

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<p style=' margin-bottom:8pt; margin-top:0pt;text-align:left;'><b><font size=2>Results of Operations</font></b></p>

<p style=' margin-bottom:8pt; margin-top:8pt; margin-left:0.01in;text-align:justify;'><i><font size=2>Three Months ended March</font></i><font size=2>&nbsp;</font><i><font size=2>31, 2008 Compared to Three Months ended March</font></i><font size=2>&nbsp;</font><i><font size=2>31, 2007</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table summarizes each of our segment&#146;s operating results (in thousands) for the three months ended March&nbsp;31, 2008 and 2007, together with the revenue and expenses related to Corporate Activities that are not allocated to the business segments during these periods:</font></p>


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            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>66,736</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>23,841</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>13,735</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>518</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Ovonic Materials</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,178</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,442</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>940</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(4,185</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Corporate Activities</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>253</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>291</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(9,175</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(6,796</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Consolidating Entries</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(185</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(145</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>72</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(517</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Consolidated</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>69,982</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>27,429</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>5,572</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(10,980</font></p> </td>
        <td width="1%" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:15pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues increased to $70.0&nbsp;million in 2008 from $27.4&nbsp;million in the corresponding quarter in 2007 due to increased product sales in 2008 in the United Solar segment.  The Company reversed $11.0&nbsp;million loss from operations in 2007 to  a $5.6&nbsp;million income from operations in 2008 due to improved operating income at United Solar and Ovonic Materials, partially offset by higher costs in our Corporate Activities, including restructuring costs of $2.4&nbsp;million (see Note A, &#147;Summary of Accounting Policies,&#148; of the Notes to our Consolidated Financial Statements).  </font></p>


<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>34</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><u><i><font size=2>United Solar Segment</font></i></u></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid; '>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="72%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product sales</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>64,941</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>22,143</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from product development agreements</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,795</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,696</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other operating revenues</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>66,736</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>23,841</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of product sales</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>45,021</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>18,303</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of revenues from product development agreements</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,254</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>744</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product development and research</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>689</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,201</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Preproduction costs</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>751</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>491</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Operating, selling, general and administrative and patent expenses</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,286</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,584</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>53,001</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>23,323</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid; '>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>INCOME FROM OPERATIONS</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>13,735</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>518</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues at the United Solar segment increased by $42,895,000 (180%) as we continued to expand our manufacturing capacity and increase product sales.  Product sales increased by 14.1MW to 21.5MW in the three months ended March 31, 2008.  Operating profit increased by $13,217,000, primarily due to increased product sales and gross profit margin, partially offset by increases to operating, selling, general and administrative expenses to support the increased volume.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Product sales increased by $42,798,000 (193%) in 2008 primarily due to high demand for our products and higher production, as well as increased selling prices and product mix.  The Company is expanding its production capacity to meet the high demand and doubled its capacity when it placed the first of its new 30MW production lines in its new Greenville, Michigan plant in November 2007 and the second line in January 2008.  The Greenville plant makes a semi-finished product and corresponding product assembly capacity was placed in service in the Company&#146;s new Tijuana, Mexico facility at the same time.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Gross profit margin on product sales increased to 30.7% in 2008 from 17.3% in 2007 primarily due to reduced manufacturing costs that improved margins by 14%.  Production at our new Greenville and Tijuana manufacturing facilities had a significant, positive contribution to our financial performance given better-than-expected ramp up of our operations at these two facilities. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>35</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>We continue to invest in product development and research to improve the throughput of our PV cell manufacturing equipment, reduce the cost of production and increase the sunlight-to-electricity conversion efficiency of our PV laminates.  Combined product development and research expenses were basically at the same level in 2008 and 2007.  Substantially all of our combined product development and research expenses are funded by government programs under contracts from the U.S. Air Force and the DOE&#146;s Solar America Initiative.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Preproduction costs increased by $260,000 due to costs associated with the training of new employees, facilities, set-up materials and supplies as we continue the expansion of our new Greenville, Michigan ($239,000) and Tijuana, Mexico ($510,000) facilities.  We will continue to incur preproduction costs with each of the new manufacturing facilities until such facilities commence production.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Consistent with our sales growth, our operating, selling, general and administrative expenses increased due to higher sales and marketing costs ($580,000), particularly in Europe, additional employee costs ($1,506,000) and increased facilities and other costs ($495,000) for expansion activities associated with our new Greenville manufacturing facilities.  Selling, general and administrative expenses in the 2008 quarter were 8% of revenues compared to 11% in 2007.  As production and sales grow in future periods, operating, selling, general and administrative expenses are expected to increase to support this expansion; but, these expenses are expected to decrease as a percentage of revenue.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>36</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><u><i><font size=2>Ovonic Materials Segment</font></i></u></p>


<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="70%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="0.5%" VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>425</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,063</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Royalties</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,537</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>769</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>896</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,194</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from license agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>264</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>238</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other operating revenues</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>56</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>178</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,178</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,442</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>356</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,098</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:102.6%'><font size=2>Cost of revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=2>609</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=2>1,270</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product development and research</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>964</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,470</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Operating, general and administrative and patent expenses</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>309</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>789</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,238</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,627</font></p> </td>
        <TD VALIGN="bottom">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 1pt'><font SIZE=2>INCOME (LOSS) FROM OPERATIONS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:1pt'><font size=2>940</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:1pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:1pt'><font size=2>$</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:1pt'><font size=2>(4,185</font></p> </td>
        <TD VALIGN="top">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:1pt'><font size=2>)&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:15pt; text-indent:0.5in;text-align:justify;'><font size=2>Our Ovonic Materials segment had income from operations in 2008 compared to a loss from operations in 2007 due principally to increased royalties (both transportation and consumer) and the benefits of our restructuring activities, which have substantially reduced our product development and research and operating, general and administrative expenses.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Product sales, representing sales of our positive electrode nickel hydroxide materials, decreased in 2008 versus 2007 due primarily to a change in our principal customer&#146;s material requirements in 2008, which resulted in a one-time acceleration of product sales in the prior quarter and a reduction in product sales in the current quarter.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Royalties increased in 2008 compared to 2007 resulting from the improving market for our NiMH battery technology for both consumer and transportation applications.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>37</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="65%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Royalties</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-27.05pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Transportation &#150; NiMH Battery</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>463</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>338</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-27.05pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Consumer &#150; NiMH Battery</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>998</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>367</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-27.05pt;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Ovonyx</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>17</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>8</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-27.05pt;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>59</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>56</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Total Royalties</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,537</font></p> </td>
        <td width="6%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>769</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:16pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues from license agreements include $238,000 in each of the three months ended March&nbsp;31, 2008 and 2007, representing amortization of a $10,000,000 payment received in a July 2004 settlement of certain patent infringement disputes (see Note  D, &#147;Joint Ventures and Investments,&#148; of the Notes to our Consolidated Financial Statements).</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The combined product development and research expenses decreased to $1,573,000 in the three months ended March&nbsp;31, 2008 from $5,740,000 in 2007 due to savings achieved under the first phase of our restructuring plan. </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Operating, general and administrative expenses decreased in the three months ended March&nbsp;31, 2008 primarily due to reduced patent costs ($305,000) plus savings achieved from our restructuring plan.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><i><font size=2>Corporate Activities</font></i></u></p>

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            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="6" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Three Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="2" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="2" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD COLSPAN="6" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>

    <tr style='page-break-inside:avoid'>
        <TD WIDTH="65%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>

        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>253</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>291</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>Operating, general and administrative expenses</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>7,050</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=2>7,087</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Restructuring costs</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,386</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Gain on disposal of property, plant and equipment</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(8</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>9,428</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,087</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>LOSS FROM OPERATIONS</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(9,175</font></p> </td>
        <TD VALIGN="middle">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(6,796</font></p> </td>
        <TD VALIGN="middle">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:16pt; text-indent:0.5in;text-align:justify;'><font size=2>Operating, general and administrative expenses, which reflect corporate operations, including human resources, legal, finance, information technology, business development, purchasing and corporate governance were basically the same in 2008 and 2007.  Savings achieved in the current quarter were offset by additional legal, incentive and other costs.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>38</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><u><i><font size=2>Other Income/Expense</font></i></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Other income (net) decreased to $1,439,000 in the three months ended March&nbsp;31, 2008 from $4,109,000 in the three months ended March&nbsp;31, 2007, due to lower interest income as a result of lower interest rates and a lower level of investments in 2008.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><i><font size=2>Income Taxes</font></i></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Income tax expense for 2008 represents taxes paid by the Company in Mexico and Germany.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Nine Months ended March</font></i><font size=2>&nbsp;</font><i><font size=2>31, 2008 Compared to Nine Months ended March</font></i><font size=2>&nbsp;</font><i><font size=2>31, 2007</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table summarizes each of our segment&#146;s operating results (in thousands) for the nine months ended March&nbsp;31, 2008 and 2007, together with the revenue and expenses related to Corporate Activities that are not allocated to the business segments during these periods:</font></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="9" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Revenues</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="10" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:2.0pt'><font size=2>Income (Loss) from Operations</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2008</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:2.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="29%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>United Solar</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>160,343</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>66,895</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>15,352</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="3%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="2%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="9%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>2,870</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Ovonic Materials</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,840</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>10,263</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>639</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(10,957</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Corporate Activities</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>797</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>890</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(27,983</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(16,527</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Consolidating Entries</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(507</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(489</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>154</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(1,585</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Consolidated</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>173,473</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>77,559</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(11,838</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0in'><font size=2>)</font></p> </td>
        <td width="3%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="2%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(26,199</font></p> </td>
        <td width="1%" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:16pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues increased to $173.5 million in 2008 from $77.6 million in the corresponding period in 2007 due to increased product sales in 2008 in the United Solar segment.  The Company reduced its loss from operations from $26.2 million in 2007 to $11.8 million in 2008 due to improved operating income in the United Solar and Ovonic Materials segments, partially offset by higher costs in our Corporate Activities, including restructuring costs of $7.5&nbsp;million (see Note A, &#147;Summary of Accounting Policies,&#148; of the Notes to our Consolidated Financial Statements).</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>39</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><u><i><font size=2>United Solar Segment</font></i></u></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="99%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid; '>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="72%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>154,538</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>61,715</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,805</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,174</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other operating revenues</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>6</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>160,343</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>66,895</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>117,846</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>50,298</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,591</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,107</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product development and research</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,723</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,686</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Preproduction costs</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>5,574</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,595</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Operating, selling, general and administrative and patent expenses</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>15,257</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,339</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>144,991</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>64,025</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid; '>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>INCOME FROM OPERATIONS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>15,352</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>2,870</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues at the United Solar segment increased $93,448,000 (140%) as we continued to expand our manufacturing capacity and product sales.  Income from operations increased by $12,482,000 primarily due to increased product sales and increased gross profit margin, partially offset by increases to operating, selling, general and administrative expenses to support the increased volume.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Product sales increased by $92,823,000 (150%) in 2008 due to high demand for our products.  This increase in volume includes the $10,301,000 impact of reduced selling prices and the mix of products sold.  The Company is expanding its production capacity to meet the high demand and doubled its capacity when it placed the first of its new 30MW production lines in its new Greenville, Michigan plant in November 2007 and the second line in January 2008.  The Greenville plant makes a semi-finished product and corresponding product assembly capacity was placed in service in the Company&#146;s new Tijuana, Mexico facility at the same time.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The increased margins on product sales (23.7% in 2008 and 18.5% in 2007) were due to lower manufacturing costs that improved margins by 10%, partially offset by lower prices.  Production at our new Greenville and Tijuana manufacturing facilities had a significant, positive contribution to our financial performance from faster ramp up of our operations at these two facilities.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>40</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
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<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>In the nine months ended March&nbsp;31, 2008, there was an increase of $1,793,000 in the allowance for slow-moving inventory.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>We continue to invest in product development and research to improve the throughput of our PV cell manufacturing equipment, reduce the cost of production and increase the sunlight-to-electricity conversion efficiency of our PV laminates.  Combined product development and research expenses increased by $1,521,000 in 2008, partially offset by increased ($631,000) revenues from product development agreements.  Substantially all of our combined product development and research expenses are funded by government programs under contracts from the U.S. Air Force and the DOE&#146;s Solar America Initiative.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Preproduction costs increased due to costs associated with the training of new employees, facilities, set-up materials and supplies as we continue the expansion of our new Greenville, Michigan ($3,114,000) and Tijuana, Mexico ($2,458,000) facilities.  We will continue to incur preproduction costs with each new manufacturing facility until we commence production.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Consistent with our sales growth, our operating, selling, general and administrative expenses increased due to higher sales and marketing costs ($2,563,000), particularly in Europe;  additional employee costs ($3,470,000), and increased facilities and other costs ($1,965,000) for expansion activities associated with our new Greenville manufacturing facilities.  As our sales grow in future periods, operating, selling, general and administrative expenses, such as sales and marketing, are expected to increase to support these sales.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>41</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
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<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><u><i><font size=2>Ovonic Materials Segment</font></i></u></p>


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            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="70%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="9.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,872</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,016</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Royalties</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,044</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,397</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,684</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>3,596</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Revenues from license agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,015</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>734</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other operating revenues</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>225</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>520</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,840</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>10,263</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Cost of product sales</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,519</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,674</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt;line-height:102.6%'><font size=2>Cost of revenues from product development agreements</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=2>1,801</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt;line-height:102.6%'><font size=2>3,638</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Product development and research</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>4,975</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,651</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Operating, general and administrative expenses</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>906</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,257</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>12,201</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>21,220</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>INCOME (LOSS) FROM OPERATIONS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>639</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(10,957</font></p> </td>
        <td width="1%" valign=middle >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:8pt; margin-top:15pt; text-indent:0.5in;text-align:justify;'><font size=2>Product sales, representing sales of our positive electrode nickel hydroxide materials, increased in 2008 versus 2007 due primarily to an increase in demand in 2007 from our principal customer.  Cost of sales of these products increased to $4,519,000 in 2008, reflecting the higher sales volume. </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our Ovonic Materials segment had income from operations in 2008 compared to a loss from operations in 2007 due principally to increased royalties (both transportation and consumer) and the savings from our restructuring activities, which have substantially reduced our product development and research and operating, general and administrative expenses.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Royalties increased in 2008 compared to 2007 resulting from the improving market for our NiMH battery technology for both consumer and transportation applications.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><font size=2></font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>42</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 8pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="67%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>Royalties</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Transportation &#150; NiMH Battery</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,426</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,018</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Consumer &#150; NiMH Battery</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>2,443</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>1,306</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Ovonyx</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>47</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>40</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:47.0pt;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Other</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>128</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>33</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Total Royalties</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4,044</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,397</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Revenues from license agreements include $714,000 in each of the nine months ended March&nbsp;31, 2008 and 2007, representing amortization of a $10,000,000 payment received in a July 2004 settlement of certain patent infringement disputes (see Note D, &#147;Joint Ventures and Investments,&#148; of the Notes to our Consolidated Financial Statements).  Revenues from license agreements for 2007 also include an increase in license fees for an existing licensee. </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The combined product development and research expenses decreased to $6,776,000 in the nine months ended March&nbsp;31, 2008 from $16,289,000 in the nine months ended March 31, 2007, due to savings achieved under our restructuring activities.  Revenues from product development agreements decreased principally due to previous completion of certain PV and optical memory contracts ($707,000) and reduced activity in 2008 ($1,387,000) on existing contracts, partially offset by new contracts in 2008 ($1,182,000) relating to our Ovonic metal hydride fuel cell and Ovonic solid hydrogen storage technologies.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Operating, general and administrative expenses decreased in the nine months ended March&nbsp;31, 2008 primarily due to reduced employee costs ($900,000), together with other cost savings ($450,000) achieved from our restructuring plan.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><i><font size=2>Corporate Activities</font></i></u></p>

<div align=center>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" STYLE="border-collapse:collapse">
    <tr style='page-break-inside:avoid'>
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            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:8.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:8.0pt;margin-bottom:0in'><font size=2>Nine Months Ended</font><br> <font size=2>March 31,</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0in;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2008</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="2" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:1.0pt'><font size=2>2007</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 1.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td colspan="6" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:2.0pt'><font size=2>(in thousands)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="70%" VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:4.0pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL REVENUES</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>797</font></p> </td>
        <TD WIDTH="6.5%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:4.0pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:4.0pt;margin-bottom: 2.0pt'><font size=2>890</font></p> </td>
        <TD WIDTH="1%" VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:6.0pt;margin-bottom: 2.0pt'><font SIZE=2>EXPENSES</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:6.0pt;margin-bottom: 2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Operating, general and administrative expenses</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>21,537</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>17,417</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:2.0pt;margin-bottom: 2.0pt'><font size=2>Restructuring costs</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>7,457</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.45in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 2.0pt'><font size=2>Gain on disposal of property, plant and equipment</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>(214</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2.0pt;margin-bottom:2.0pt'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:2pt;margin-bottom:2.0pt'><font size=2>&#151;</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 2.0pt'><font SIZE=2>TOTAL EXPENSES</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>28,780</font></p> </td>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:2pt;margin-bottom:2.0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:2.0pt'><font size=2>17,417</font></p> </td>
        <td width="1%" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:2.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <TD VALIGN="BOTTOM">
            <p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font SIZE=2>LOSS FROM OPERATIONS</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(27,983</font></p> </td>
        <TD VALIGN="middle">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)</font></p> </td>
        <td width="1%" valign=bottom style='border-bottom: double black 2.25pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;">
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:right;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(16,527</font></p> </td>
        <td width="1%" valign=middle >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>)</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>43</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Operating, general and administrative expenses, which reflect corporate operations, including human resources, legal, finance, information technology, business development, purchasing and corporate governance, increased in 2008 due to restructuring costs.  The Company has incurred certain additional costs, including legal costs associated with the Chevron arbitration ($2,791,000) and incentive costs ($1,760,000).  In 2007, the Company recorded a $750,000 reduction in product warranty accrued expenses in connection with the Rare Earth Ovonic joint venture.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><i><font size=2>Other Income/Expense</font></i></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Other income (net) decreased to $5,914,000 in the nine months ended March&nbsp;31, 2008 from $14,113,000 in the nine months ended March&nbsp;31, 2007, due to lower interest income due to lower interest rates and a lower level of investments in 2008.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><u><i><font size=2>Income Taxes</font></i></u></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Income tax expense for 2008 represents taxes paid by the Company in Mexico and Germany.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><b><font size=2>Liquidity and Capital Resources</font></b></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our primary liquidity needs are to fund capital expenditures associated with expansion of our United Solar segment&#146;s manufacturing capacity and support our working capital requirements. Our principal sources of liquidity are cash, cash equivalents and short-term investments (which principally represent the proceeds from our March 2006 offering of common stock), cash flow from operations, and borrowing available under our new credit facility.  We believe that cash, cash equivalents and investments, cash flows from operations and borrowing under our credit facility will be
sufficient to meet our liquidity needs for current operations and expansion for the foreseeable future.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March 31, 2008, the Company had purchase commitments of approximately $49,642,000 related to its previously announced goal of expanding United Solar&#146;s manufacturing capacity to 300MW by 2010.  The Company presently intends to fund this additional expansion through existing funds and cash from operations.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008, we had $134,070,000 in consolidated cash, cash equivalents, and short-term and long-term investments consisting of variable rate corporate bonds (&#147;VRCB&#146;s&#148;), auction rate certificates (&#147;ARC&#146;s&#148;), corporate notes and money market funds.  All short-term investments are classified as &#147;available-for-sale.&#148;  There were $5,659,000 in restricted investments as of March 31, 2008.  In addition, the Company has $32,757,000 in ARC&#146;s classified as long-term investments at March&nbsp;31, 2008.  These short-term investments have maturities up to 20 months, except for the ARC&#146;s which have maturities from 26 to 38 years.  Both the VRCB&#146;s and ARC&#146;s
resemble short-term instruments due to the periodic interest rate reset and put options.  At March&nbsp;31, 2008, we had consolidated working capital of $135,828,000.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>44</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>


<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>An adverse ruling in the pending Cobasys arbitration could adversely affect our liquidity position, while a successful completion of a strategic transaction involving Cobasys could favorably affect our liquidity position.  See Part II, Item I &#150; Legal Proceedings and Item 1A &#150; Risk Factors.  </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Cash Flows</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Net cash provided by our operating activities was $12,669,000 in 2008 versus $1,332,000 used in 2007.  The operating cash flows in our United Solar segment are being impacted by the change in working capital as we expand sales and production.  While inventory levels decreased at March&nbsp;31, 2008, we anticipate that future accounts receivable and inventory balances will increase as we continue to expand our manufacturing and sales activities.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Net cash used in investing activities was $18,656,000 in 2008 as compared to $118,116,000 used in investing activities in the corresponding period in 2007.  This decrease was principally due to reduced purchase of investments in 2008.  There was a decrease in capital spending ($88,768,000 in 2008 compared to $139,421,000 in 2007), principally associated with the timing of the increased 2007 expansion of our United Solar segment&#146;s manufacturing capacity. As we further expand United Solar&#146;s manufacturing capacity, we will be increasing our cash flow for our investing activities.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Net cash provided by our financing activities was $5,971,000 in 2008 as compared to $8,308,000 in 2007, primarily as a result of proceeds from the exercise of stock options.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Restructuring Reserve</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In 2008, the Company incurred additional restructuring costs of $7,457,000 and utilized or paid $8,916,000 out of this reserve.  The Company has a balance of $2,172,000 in this reserve at March&nbsp;31, 2008, of which $1,767,000 will be utilized or paid in the next year.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>For details of our cash flows, see the Consolidated Statements of Cash Flows in our Consolidated Financial Statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Short-term Borrowings</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>On February 4, 2008, our subsidiaries United Solar Ovonic LLC and United Solar Ovonic Corporation entered into Secured Credit Facility Agreements consisting of a $30&nbsp;million revolving line of credit to finance domestic activities and a separate $25&nbsp;million revolving line of credit provided under the United States Export-Import Bank&#146;s fast track working capital guarantee program to finance foreign activities.  Availability of financing under the lines of credit will be determined by reference to a borrowing base comprised of domestic inventory and receivables and foreign inventory and receivables, respectively.  The facilities also contain an aggregate
$10&nbsp;million sub-limit for standby letters of credit.  At March 31, 2008, there were no amounts under this sub-limit.</font></p>




<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>45</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<BR>
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<P style="PAGE-BREAK-BEFORE: always"></P>
<FONT face="Times New Roman, Times, Serif" size=1><U><I>
<A href="#tocmain">Table of Contents</A></I></U> </FONT>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>

<p style=' margin-bottom:8pt; margin-top:0pt;text-indent:0.5in;text-align:justify;'><font size=2>As of March&nbsp;31, 2008, we had a line of credit with LaSalle Bank Midwest N.A. in the amount of $5,000,000.  This line of credit provides a mechanism for obtaining letters of credit and
entering into foreign exchange transactions.  The line of credit, which expires on August&nbsp;31, 2008, requires maintaining a $5,000,000 minimum investment balance.  At March&nbsp;31, 2008, we had outstanding letters of credit of $2,161,000 against the line of credit.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Joint Ventures</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Through September 2007, CTV funded Cobasys&#146; operations by acquiring a preferred interest in Cobasys for which it is entitled to a priority right of repayment in certain situations. From October 2007 through
January 2008, CTV declined to purchase preferred interests and funded Cobasys in a manner that in OBC&#146;s view violated the Operating Agreement and applicable Michigan law. Since February 2008, Cobasys has received funding support from a customer, during which time Cobasys management has not sought any funding from the members of Cobasys. Further, Cobasys and its members have not agreed on a 2008 budget and/or business plan.
In 2007, CTV and OBC agreed to explore strategic alternatives regarding Cobasys, which has resulted in us, OBC and CTV commencing negotiations for the sale of Cobasys with a potential buyer in early 2008. These sale negotiations have been ongoing, but we cannot assure you that the proposed sale will be completed by the current deadline under our interim settlement agreement or on terms favorable to us and OBC, or if it will be
completed at all. If the proposed sale is not completed, without an agreed budget and business plan and resolution of pending disputes subject to the arbitration between us and OBC and CTV, Cobasys may not be able to continue as a going concern. See Part II, Item I &#150; Legal Proceedings and Item 1A &#150; Risk Factors.
</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Contractual Obligations</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company announced expansion plans for an additional capacity of 120MW, increasing future solar nameplate manufacturing capacity to approximately 300MW by 2010.  As of March 31, 2008, the Company had purchase commitments of approximately $49,642,000 for its announced expansion, and the Company presently intends to fund this additional expansion through existing funds and cash from operations. </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company, in the ordinary course of business, enters into purchase commitments for raw materials.  The Company also enters into purchase commitments for capital equipment, including subcontracts for the purchase of components for the new solar manufacturing equipment being installed in Greenville, Michigan.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The increase in purchase commitments is primarily due to the aforementioned expansion plan, additional commitments to purchase steel for the new Auburn Hills facility and construction and equipment commitments for the new Greenville facilities.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>In December 2007, the Company entered into a gas purchase agreement totaling $8,458,000 for certain of its facilities.  The agreements are effective through December 2008.  The agreements require the Company to purchase a committed amount of germane gas at a monthly fixed price, which the Company believes it will consume in its normal course of operations during the period January through October 2008.</font></p>

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<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><b><font size=2>Significant Accounting Policies</font></b></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our significant accounting policies are more fully described in Note&nbsp;A, &#147;Summary of Accounting Policies,&#148; of the Notes to our Consolidated Financial Statements.  Certain of our accounting policies require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other outside sources, as appropriate.  However, they are subject to an
inherent degree of uncertainty.  As a result, actual results in these areas may differ significantly from our estimates. </font></p>

<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>We consider an accounting estimate to be critical if it requires us to make assumptions about matters that were uncertain at the time the estimate was made and changes in the estimate would have had a significant impact on our consolidated financial position or results of operations.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><i><font size=2>Warranty Liability</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>We generally provide a 20-year product warranty on power output on all Uni-Solar products installed as part of pre-engineered solutions.  Our accrued warranty liability also includes warranties previously provided on our machine-building and equipment products.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Allowance for Uncollectible Accounts</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company maintains an allowance for uncollectible accounts considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, the customer&#146;s current ability to pay its obligation, and the condition of the general economy and industry as a whole. </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Federal Taxes on Income</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company accounts for income taxes using the asset and liability approach.  Deferred income taxes are provided for the differences between the tax bases of assets and liabilities and their reported amounts in the financial statements.  This method also requires the recognition of future tax benefits, such as net operating loss carryforwards, to the extent that the realization of such benefits is more likely than not.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>At June 30, 2007, the Company had net operating loss carryforward of $329,990,000 expiring in 2008 through 2027 and an alternative tax minimum credit carryforward of $1,363,000, which do not expire.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>A valuation allowance has been recorded for all of the above tax benefits.</font></p>



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<p style=' margin-bottom:8pt; margin-top:0pt;text-align:justify;'><i><font size=2>Inventory Reserves</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.4in;text-align:justify;'><font size=2>The Company maintains an allowance for slow-moving inventory for certain inventory items for which it does not expect to sell within the next twelve months.  </font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><i><font size=2>Government Contracts, Reserves and Liabilities</font></i></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our reserves and liabilities for government contracts reflects  amounts questioned in an audit of certain government contracts by the Defense Contract Audit Agency and a reserve to reflect our residual royalty obligations under an advanced development agreement.  See Note&nbsp;E, &#147;Liabilities,&#148; of the Notes to our Consolidated Financial Statements.</font></p>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>See Note&nbsp;A, &#147;Summary of Accounting Policies &#150; Recent Pronouncements,&#148; of the Notes to our Consolidated Financial Statements for a description of recent accounting pronouncements and the impact on the Company&#146;s financial statements.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt;text-align:justify;'><b><font size=2>Forward-Looking Statements</font></b></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including in particular statements about our financial condition, results of operations, plans, objectives, expectations, future performance and business prospects.  These statements are identified by forward-looking words such as &#147;may,&#148; &#147;will,&#148; &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;seek&#148; and similar expressions.  We have based these forward-looking statements on our current expectations with respect to future events and occurrences, but our actual results in the future may differ materially from the expected results reflected in our forward-looking statements.  Important factors that could cause our actual results to differ
materially from the results anticipated by the forward-looking statements include general economic and industry conditions in the markets in which we operate, risks associated with conducting business in foreign countries, and the risks discussed in Item 1A, &#147;Risk Factors,&#148; of our Annual Report on Form 10-K for fiscal year ended June&nbsp;30, 2007, and in other filings with the SEC from time to time.  Any or all of these factors could cause our actual results and financial or legal status for future periods to differ materially from those expressed or referred to in any forward-looking statement.  All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.  Forward-looking statements speak only as of the date on which they are made.  Except as required by law, we undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Quantitative and Qualitative Disclosures About Market Risk</font></b></u></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The following discussion about our exposure to market risk of financial instruments contains forward-looking statements.  Actual results may differ materially from those described.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Our holdings of financial instruments are comprised of debt securities and time deposits.  All such instruments are classified as securities available-for-sale.  We do not invest in portfolio equity securities, or commodities, or use financial derivatives for trading purposes.  Our debt security portfolio represents funds held temporarily, pending use in our business and operations.  The Company had $100,917,000 (excluding long-term investments) and $205,282,000 of these investments (including cash equivalents) on March&nbsp;31, 2008 and June&nbsp;30, 2007, respectively.  At March&nbsp;31, 2008, there were restricted investments of $5,659,000.  It is the Company&#146;s policy that investments (including cash equivalents) shall be rated &#147;A&#148; or higher by Moody's or Standard and Poor&#146;s, no single investment (excluding cash equivalents) shall represent more than 10% of the
portfolio and at least 10% of the total portfolio shall have maturities of 90 days or less.  Our market risk primarily relates to the risks of changes in the credit quality of issuers.  An interest rate change of 1% would result in a change in the value of our March&nbsp;31, 2008, portfolio of approximately $56,000.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The Company invests in auction rate certificates.  Recent market conditions have resulted in failures of certain auctions; however, the Company&#146;s securities have not experienced such failures.  Due to the recent temporary liquidation problems experience with certain securities, we have reclassified them as long-term investments.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Controls and Procedures</font></b></u></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b)&nbsp;as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>There were no changes in our internal control over financial reporting during the quarter ended March&nbsp;31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. </font></p>


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<p style=' margin-bottom:8pt; margin-top:8pt;text-align:center;'><u><font size=2>PART II &#150; OTHER INFORMATION</font></u></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Legal Proceedings</font></b></u></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>As previously reported in our first and second quarter reports on Form 10-Q, on September 10, 2007, CTV issued a notice of dispute and filed claims in arbitration against ECD and OBC relating to our Cobasys joint venture. CTV&#146;s original arbitration claim seeks damages and injunctive and other relief and alleges that
ECD and OBC breached and anticipatorily repudiated obligations to provide certain funding to Cobasys under the Amended and Restated Operating Agreement dated as of December 2, 2004 among us, OBC and CTV (the "Operating Agreement"), which governs Cobasys. CTV subsequently filed a supplemental notice of dispute amending its claims to assert that ECD and OBC had dishonored CTV's preferred interest in Cobasys and that OBC had breached its
obligation to use diligent efforts to approve a 2008 annual budget for Cobasys. We and OBC have denied CTV&#146;s allegations and filed a counterclaim, seeking damages and injunctive and other relief on the ground that CTV has been acting unilaterally and in violation of the Operating Agreement and applicable Michigan law in regard to the funding and spending provisions of the Agreement.
</font></p>


<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>We and OBC dispute and have been vigorously defending the claims asserted by CTV and have pursued our counterclaim. In our view, the Operating Agreement is clear that we and OBC have no present obligation to provide funding to Cobasys; OBC is not in default of the Operating Agreement; any future funding obligation
would arise only upon unanimous approval by Cobasys&#146; members, OBC and CTV, of (i) a 2008 budget and operating plan for Cobasys, and (ii) agreed capital contributions by the members; and CTV has no right unilaterally to provide funding or to authorize spending by Cobasys without an approved 2008 budget and operating plan, or otherwise as approved by OBC. In our view, the Operating Agreement is also clear that we and OBC have not
dishonored CTV&#146;s preferred interests; OBC has an unqualified right to refuse to sell its interests in Cobasys on terms that it does not consider appropriate; and OBC may determine in its discretion whether to approve any sale of Cobasys or sale of CTV&#146;s interests in Cobasys.
</font></p>




<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The members of Cobasys have not approved a 2008 business plan and budget, and CTV and OBC have not been able to agree on a solution to Cobasys&#146; business issues or whether Cobasys should continue as a going concern if it cannot be sold in the near future. Cobasys had losses of approximately $76 million and obtained
funding of approximately $84 million in 2007, and in January 2008 Cobasys management forecast losses of approximately $82-86 million and funding requirements of approximately $92-94 million for 2008. Until September 2007, CTV historically funded Cobasys&#146; loss-generating operations through the purchase of preferred interests.&nbsp;&nbsp;From October 2007 through January 2008, CTV declined to purchase preferred interests and funded Cobasys in a
manner that in OBC&#146;s view violated the Operating Agreement and applicable Michigan law. Since February 2008, Cobasys has received funding support from a customer in the form of a loan for capital equipment purchases and a price increase on products sold to the customer. While Cobasys has been receiving this funding support from its customer, Cobasys management has not sought any funding from the members of Cobasys. There is no assurance
that this customer funding support will continue on these or other terms or otherwise be sufficient to permit Cobasys to continue as a going concern.
</font></p>

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<p style=' margin-bottom:8pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The arbitrator held a hearing in January 2008 on our and OBC&#146;s application for partial judgment on the pleadings seeking to dismiss CTV&#146;s initial and amended claims and CTV&#146;s request for declaratory relief, seeking an order declaring that OBC and ECD must meet their alleged funding obligations and not block a sale of Cobasys
by dishonoring CTV's preferred interest.
</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2> After this hearing, but before receiving the arbitrator&#146;s ruling, on February 15, 2008 the parties entered into an interim settlement agreement providing for a suspension of the arbitration, a deferral of the arbitrator&#146;s ruling, and a requirement of the parties to use their commercially reasonable best efforts to negotiate definitive agreements for the sale of Cobasys based on a non-binding proposal received from a potential buyer. The terms of the interim settlement also provide for an agreed allocation of the proceeds of this sale, an agreed distribution of certain royalty rights, a restructuring of Cobasys&#146; intellectual property
assets with certain rights reverting to OBC, and require dismissal of the arbitration with prejudice and a settlement and mutual release of Cobasys-related claims in the event that the sale is completed prior to a mutually agreed deadline. Sale negotiations have been ongoing among us, OBC, CTV and the potential buyer and, since the interim settlement agreement was entered into, the parties to the arbitration have on seven occasions during the negotiation process amended the agreement to extend the deadline for timely consummation. There is no assurance that the sale will be completed or that the arbitration will be settled as contemplated by the interim settlement agreement. If the sale of Cobasys does not close by the current deadline and the interim settlement is not extended, we, OBC or CTV could resume the arbitration and cause the arbitrator&#146;s ruling on
our and OBC&#146;s application for partial judgment on the pleadings to be issued. There is no assurance that the arbitrator&#146;s ruling would be favorable to us and OBC.
</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>International Acquisitions Services, Inc. (&#147;IAS&#148;), Innovative Transportation Systems AG (&#147;ITS&#148;) and Neville Chamberlain filed suit against Energy Conversion Devices, Inc. (&#147;ECD&#148;) in Nassau County, New York on October 11, 2007, claiming, among other things, that ECD made fraudulent statements relating to the supply of battery products to ITS, an entity created to manufacture and sell an electric delivery vehicle known as the InnoVan.&nbsp; Chamberlain, a sophisticated investor, invested in ITS through IAS.  ECD also invested in ITS.  ECD disputes and is vigorously defending these claims.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Risk Factors</font></b></u></p> </td> </tr></table>
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<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><FONT SIZE="2"><I>Our Cobasys joint venture faces uncertain prospects and is the subject of a pending arbitration</I>. </FONT></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>The members of Cobasys have not approved a 2008 business plan and budget, and CTV and OBC have not been able to agree on a solution to Cobasys&#146; business issues or whether Cobasys should continue as a going
concern if it cannot be sold in the near future. Cobasys had losses of approximately $76 million and obtained funding of approximately $84 million in 2007, and in January 2008 Cobasys management forecast losses of approximately $82-86 million and funding requirements of approximately $92-94 million for 2008. Until September 2007, CTV historically funded Cobasys&#146; loss-generating operations through the purchase of preferred interests.&nbsp;&nbsp;From October 2007 through January 2008, CTV declined to purchase preferred
</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>51</FONT></P>
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<p style=' margin-bottom:8pt; margin-top:0pt; text-align:justify;'><font size=2>interests and funded Cobasys in a manner that in OBC&#146;s view violated the Operating Agreement and applicable Michigan law. Since February 2008, Cobasys has received funding support from a customer in the form of a loan for capital equipment purchases and
a price increase on products sold to the customer. While Cobasys has been receiving this funding support from its customer, Cobasys management has not sought any funding from the members of Cobasys. There is no assurance that this customer funding support will continue on these or other terms or otherwise be sufficient to permit Cobasys to continue as a going concern.</font></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:0.5in;text-align:justify;'><font size=2>Certain disputes relating to Cobasys are the subject of the arbitration described under Part II, Item 1 &#150; Legal Proceedings in this report. The parties have temporarily suspended the arbitration pursuant to an
interim settlement agreement among us, OBC and CTV in order to pursue the potential sale of Cobasys to a third party. Since the interim settlement agreement was entered into, the parties to the arbitration have on seven occasions during the sale process amended the agreement to extend the deadline for timely consummation. If the sale of Cobasys is not consummated timely and any of OBC, CTV or us determine not to further extend our interim
settlement agreement, we, OBC or CTV could resume the arbitration and cause the arbitrator&#146;s ruling on our and OBC&#146;s application for partial judgment on the pleadings to be issued. We cannot assure you that a sale will be timely consummated or consummated at all. If not timely consummated, we cannot assure you that the arbitrator&#146;s ruling would be favorable to us and OBC or that we and OBC ultimately would prevail in the arbitration.
</font></p>


<div align=left>
<A name="tocv">&nbsp;</A>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Item 6</font></b></u><b><font size=2>.</font></b></p> </td>
        <td width="90%" nowrap valign=top style='padding:14.0pt 0in 8.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Exhibits</font></b></u></p> </td> </tr> </table>
</div>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="50" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:10pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>10.1</font></p> </td>
        <td  nowrap colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:5pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>Revised Separation Agreement with executive officer effective December 31, 2007.</font></p> </td> </tr>
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        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="70" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:10pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>10.2</font></p> </td>
        <td  nowrap colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:5pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>Revised Separation Agreement with executive officer effective March 31, 2008.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="70" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:10pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>31.1</font><u></u></p> </td>
        <td  nowrap colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:5pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font><u></u></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="70" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:10pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>31.2</font><u></u></p> </td>
        <td  nowrap colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:5pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font><u></u></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="70" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:10pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>32</font><u></u></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:5pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=2>Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.<BR>&nbsp;&nbsp; Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="70" nowrap valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=1>&nbsp;</font></p> </td>
        <td  nowrap colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:8.0pt;margin-bottom: 8.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD WIDTH="10"></td>

        <TD WIDTH="15"></td>

        <TD WIDTH="70"></td>

        <TD WIDTH="12"></td>

        <TD WIDTH="76"></td>

        <TD WIDTH="491"></td> </tr> </table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<P style="MARGIN-TOP: 8pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 19.69%; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>52</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
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<P style="PAGE-BREAK-BEFORE: always"></P>
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<A name="tocw">&nbsp;</A>
<p style=' margin-bottom:8pt; margin-top:0pt;text-align:center;'><U><font SIZE=2>SIGNATURES</font></U></p>

<p style=' margin-bottom:8pt; margin-top:8pt; text-indent:7.81%;text-align:justify;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</font></p>


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            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font SIZE=2>ENERGY CONVERSION DEVICES, INC. </font></p> </td> </tr>

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            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1pt;margin-bottom: 44.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD WIDTH="6%" VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1pt;margin-bottom: 44.0pt'><font size=2>&nbsp;</font></p> </td>
        <TD WIDTH="44%" VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; ">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1pt;margin-bottom: 44.0pt'><font SIZE=2>(Registrant)</font></p> </td> </tr>

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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>Date: May 8, 2008</font><u></u></p> </td>
        <TD VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>By:</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE='padding:0in 5.4pt 0in 5.4pt;  BORDER-bottom: black 1pt solid' >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom: 0pt'><font size=2>/s/ Sanjeev Kumar</font></p> </td> </tr>

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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>&nbsp;</font><u></u></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom: 44.0pt'><font size=2>Sanjeev Kumar</font><br> <font size=2>Vice President and Chief Financial Officer</font><br> <font size=2>(Principal Financial and Accounting Officer)</font></p> </td> </tr>

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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>Date: May 8, 2008</font><u></u></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>By:</font></p> </td>
        <TD VALIGN="BOTTOM" STYLE='padding:0in 5.4pt 0in 5.4pt;  BORDER-bottom: black 1pt solid' >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom: 0pt'><font size=2>/s/ Mark D. Morelli</font></p> </td> </tr>

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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>&nbsp;</font><u></u></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:8.0pt;margin-bottom: 0pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom: 44.0pt'><font size=2>Mark D. Morelli</font><br> <font size=2>President and Chief Executive Officer</font></p> </td> </tr>

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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT face="Times New Roman, Times, Serif" size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT face="Times New Roman, Times, Serif" size=2>53</FONT></P>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10p1-executiveseparation.htm
<DESCRIPTION>SEPARATION AGREEMENT EFFECTIVE 12.31.2007
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            <p align="right"><font face="Times New Roman, Times, Serif" size="2">Exhibit
            10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><font SIZE=2>REVISED SEPARATION AGREEMENT AND COMPLETE RELEASE OF LIABILITY</font></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>PARTIES</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>JAMES METZGER (&#147;METZGER&#148;), and Energy Conversion Devices, Inc., Ovonic Battery Company and United Solar Ovonic, LLC and their subsidiaries, divisions, affiliates and joint ventures (collectively referred to as &#147;ECD&#148;), have mutually agreed to change their employment relationship and to provide certain benefits when employment is to be terminated at a future date.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>CONSIDERATION</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>ECD will provide the following benefits as a result of the resignation of METZGER from his position of Executive Vice President of ECD, effective December 31, 2007.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>A.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>MANAGEMENT REPRESENTATIVE TO COBASYS:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>METZGER will continue to provide services on behalf of ECD in the capacity as an ECD representative to the Management Committee of COBASYS LLC (&#147;COBASYS&#148;) and to assist management in connection with the potential sale or dissolution of COBASYS (in such capacity as the &#147;ECD Representative&#148;).  This representative position shall be without further compensation beyond the terms of this Agreement and METZGER will serve at the pleasure of the President and CEO of ECD.  METZGER will work out of his home in Connecticut and will be reimbursed for ordinary and necessary business expenses within the guidelines of ECD, including travel expenses.  Ordinary business expenses do not include home office expenses, cell phone expenses or first class travel expenses.  All expenses must be approved and reimbursement sought through submission of business expenses with required documentation to
ECD.  METZGER will resign his position of Executive Vice President with ECD effective December 31, 2007.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>B.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>STOCK OPTIONS AND STOCK AWARDS: </font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>Attached as Schedule A is a complete list of the stock options and stock awards granted to METZGER and outstanding as of the date hereof.   Subject to the vesting set forth below, such stock options and stock awards will continue in effect and be exercisable from and after December&nbsp;31, 2007 and for so long as METZGER continues to serve as an ECD Representative, and such service shall be counted towards the vesting schedule of such stock options and stock awards, as provided in and pursuant to the terms of such stock options and stock awards; provided, however, that there is no guarantee that the vesting requirements will be met with continued service through the vesting </font></p>


<p style=' margin-bottom:10pt; margin-top:5pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>period.  METZGER&#146;s right to exercise his options shall expire 90 days following his termination as the ECD representative on the COBASYS Management Committee.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>The parties acknowledge that on May 2, 2007 ECD awarded METZGER 8,352 shares of restricted stock under the Energy Conversion Devices, Inc. 2006 Stock Incentive Plan (the &#147;2007 Restricted Stock Award&#148;).  ECD will vest 2,784 shares of the 2007 Restricted Stock Award effective as of the date of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>C.</font></p> </td>
        <td width="396" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>TERMINATION OF OTHER EMPLOYEE BENEFITS:</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>All other benefits, including but not limited to, Company-paid life insurance, supplemental life insurance, dependent life insurance, Company-paid accidental death and dismemberment insurance, short-term and long-term disability plans, vacation accrual, etc., cease on December 31, 2007.  The supplemental life insurance benefit may be subject to conversion rights.  These policies may be converted to individual policies.  Conversion forms will be sent to METZGER&#146;S home by the insurance carrier if METZGER meets the eligibility requirements.  </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>D.</font></p> </td>
        <td width="187" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VACATION ACCRUAL:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>METZGER will be paid accrued but unused vacation pay in the first payroll period in January 2008.  METZGER will not be eligible for further vacation pay during the period of his service as an ECD Representative.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="188" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>RELEASE OF CLAIMS</font></U><font size=2>:</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>In consideration of the terms set forth in this Agreement, METZGER agrees to release ECD, including Ovonic Battery Company and United Solar Ovonic, LLC and all of their subsidiaries, divisions, affiliates, joint ventures, shareholders, officers, directors, employees, insurers and agents of </font><U><font SIZE=2>AL</font></U><font size=2>L* liability in connection with METZGER&#146;S employment, change in position or separation, including, but not limited to, any and all claims under federal or state laws for discrimination or wrongful discharge, including the Age Discrimination in Employment Act, (&#147;ADEA&#148;), the Worker Adjustment and Retraining Notification Act (&#147;WARN&#148;) (even if the WARN Act is triggered following METZGER&#146;S termination).  METZGER waives all rights to file a Complaint under the ECD Mandatory Complaint Procedure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_________________________</font></p>
<sup>&nbsp;</sup>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2><sup>*</sup></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2><sup>A&nbsp;</sup>representative listing of potential laws governing the employment relationship which are being released by the employee is attached as Exhibit "A."  This is not intended to be an exhaustive list, but rather the types of claims and the extent to which they are being released.</font></p> </td> </tr></table>
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<sup>&nbsp;</sup>

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<font size=2>4.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><U><font SIZE=2>CONFIDENTIAL AND PROPRIETARY INFORMATION</font></U><font size=2>:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER acknowledges that during the course of his employment, he has been entrusted with certain business, financial, technical, personnel and other proprietary information and materials that are the property of ECD.  METZGER agrees not to communicate or disclose to any third party or use for his own account, without written consent of ECD, any of the aforementioned information or material, except as required by law, unless and until such information or material becomes generally available to the public through sources other than METZGER.  METZGER will return to ECD the originals and all copies of any business records of ECD which are or were subject to his custody or control, regardless of the sources from which such records were obtained.  METZGER will certify that to the best of his knowledge and belief and after diligent search and inquiry, he has done so.  In addition, all business
equipment shall be returned unless specifically agreed in writing otherwise by ECD.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>NON-DISPARAGEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER will not disparage, discredit or otherwise treat in any detrimental manner, ECD or any of its division, subsidiaries, affiliates, joint ventures, officers, directors and employees.  METZGER will forfeit any right to receive the benefits described above if METZGER engages in deliberate conduct or makes public statements detrimental to the business or reputation of ECD.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>REFERENCE REQUESTS</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Upon receipt of a reference request directed to the Human Resources Department, ECD will only release dates of employment, job positions held and salary if requested.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>NON-SOLICITATION</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER agrees that during the period he serves as an ECD Representative and for a period of twelve (12) months thereafter, METZGER will not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written approval of ECD directly or indirectly (i) induce any person or entity to leave his or her employment with ECD, terminate an independent contractor relationship with ECD or terminate or reduce any contractual relationship with ECD; or (ii) induce or influence any customer, supplier or other person that has a business relationship with ECD or any subsidiary, division, affiliate or joint venture of ECD to discontinue or reduce the extent of such relationship.  The Parties agree that the determination of the amount of damages to ECD would be difficult to determine and, therefore, the Parties agree that should METZGER violate this Paragraph, METZGER will
pay as liquidated damages 33% of the solicited METZGER&#146;S annualized base pay in a lump sum irrespective of the amount of time solicitated METZGER remains employed.  This provision for liquidated damages shall not preclude the right of ECD to seek equitable relief </font></p>

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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>through the issuance of an injunction prohibiting employment of the solicited employee or further action by METZGER to interfere with the business relationship with any customer or supplier.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td width="176" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>NON-COMPETITION</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER agrees that for the period during the period in which he serves as an ECD Representative and for a period of twelve (12) months thereafter, he will not, directly or indirectly, on his behalf or any other person or entity, without the prior written approval of ECD, own, manage, operate, join, control, be employed by, assist, consult or participate in the ownership, management, operation or control of, or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner or investor ( other than an investment of not more than five percent (5%) of the stock or equity of any corporation the capital stock of which is publicly traded or 5% of any limited partnership or other entity), with any Competing Enterprise without first getting prior written consent from ECD.  &#147;Competing
Enterprise&#148; means any person, corporation, partnership or other entity engaged in whole or in part in a business which is in competition with ECD and its divisions, subsidiaries, affiliates and joint ventures as of the date that employment with ECD terminates.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>The restrictions in this Paragraph shall apply to the following geographic areas:  North America including the United States, Canada and Mexico.  METZGER agrees that the restrictions in this Paragraph are reasonable.  METZGER also agrees to provide any prospective employer with a copy of the non-competition paragraph of this Agreement.  In addition, the Parties agree that ECD shall be entitled to recover, as liquidated damages, all after-tax earnings of METZGER derived from violation of this Paragraph.  This provision for liquidated damages shall not preclude the right of ECD to seek equitable relief through the issuance of an injunction prohibiting employment of METZGER in violation of this Agreement.  In addition, the time period specified in this Non-competition paragraph shall be extended for the period of violation.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>INDIVIDUAL AGREEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER acknowledges that the consideration he is receiving pursuant to this Agreement is not part of a plan or program and has been individually negotiated between the Parties and that he is not entitled to additional severance pay beyond the terms of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td width="365" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>TIME PERIOD FOR REVIEW OF AGREEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER will have an opportunity of forty-five (45) calendar days to review this Agreement and is advised to consult with an attorney of METZGER&#146;S choosing at his own expense.  If this Agreement is not signed by the end of the forty-five (45) day review period, the offer will expire.  No benefits provided by this </font></p>

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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Agreement will be made until the Agreement is signed and the seven (7) day revocation period has expired.  </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>UNDERSTANDING OF AGREEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>METZGER acknowledges that he has read this entire Agreement, that he has had the opportunity to consult with counsel at his own expense, and that he understands all of its terms and knowingly and freely enters into the Agreement.  METZGER further acknowledges that he has been afforded forty-five (45) calendar days to consider this Agreement from the date of receipt of this Agreement, has been advised to seek review of this Agreement by an attorney at METZGER&#146;S own expense, and that he has seven (7) calendar days after its execution to revoke the Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>ENTIRE AGREEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>This Revised Separation Agreement and Complete Release of Liability, together with any previously signed confidentiality, non-solicitation, patent and non-compete agreements, constitutes the complete and entire Agreements between the Parties relating to the termination of the employment relationship and supersedes any and all previous agreements, representations or understandings regarding termination of benefits.  These Agreements may not be changed, modified or terminated unless such changes are made in writing and signed by both Parties.  Any previously signed confidentiality, non-solicitation, patent, or non-compete agreement shall remain in effect following termination of the employment relationship and execution of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>SEVERABILITY</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Should any portion of this Agreement be ruled invalid, it shall not affect the remaining provisions of this Agreement, which shall remain in full force and effect.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>REAFFIRMATION OF AGREEMENT</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>In order to receive the benefits of this Agreement METZGER will be required to re-sign the Agreement, including the full and complete release of liability, following his termination as an ECD Representative.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>GOVERNING LAW</font></U><font size=2>:</font></p> </td> </tr></table>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>The Parties agree that any disputes regarding this Revised Separation Agreement shall be governed by the laws of the State of Michigan.</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td width="243" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><U><font SIZE=2>ARBITRATION OF DISPUTES</font></U><font size=2>:</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>The Parties agree that any dispute over the terms of this Agreement or its enforcement shall be resolved exclusively by final and binding arbitration pursuant to the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association.  The award of the arbitrator may be filed in the appropriate federal or circuit court in the state in which the employee was employed.  ECD and METZGER retain the right to seek equitable relief pending the outcome of the arbitration proceedings with jurisdiction and venue agreed to by the Parties in Oakland County Circuit Court.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>IN WITNESS WHEREOF, we have set our hands the day and year first written below.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="620" STYLE="border-collapse:collapse">
    <tr >
        <TD WIDTH="280" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'>                                                                                                </p> </td>
        <TD WIDTH="30" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="310" VALIGN="TOP" STYLE="border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ James Metzger</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=2>Dated: 2/4/2008</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font SIZE=2>JAMES METZGER</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td> </tr>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:17pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:17pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:17pt;margin-bottom:0pt'><font SIZE=2>ENERGY CONVERSION DEVICES, INC.</font></p> </td> </tr>

    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <TD VALIGN="TOP" STYLE="border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Art Roger</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dated: 24 Jan. 2008</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Art Rogers</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Its:</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>V.P., Human Resources &amp; Administration</font></p> </td> </tr>
    <tr >
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'>                                                                                                </p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td>
        <TD VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12.0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ex10p2-executiveseparation.htm
<DESCRIPTION>SEPARATION AGREEMENT EFFECTIVE 3.31.2008
<TEXT>
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            <p align="right"><font face="Times New Roman, Times, Serif" size="2">Exhibit
            10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <p align="center">
            <font face="Times New Roman, Times, Serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
            <u>REVISED SEPARATION AGREEMENT AND COMPLETE RELEASE OF LIABILITY</u></i></font></p>
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                    <td width="5%">
                    <font face="Times New Roman, Times, serif" size="2">1.</font></td>

                    <td width="95%">
                        <p>
                        <font size="2"><font face="Times New Roman, Times, serif"><u>PARTIES</u>:</font></font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">NANCY BACON
                        (&ldquo;MS. BACON&rdquo;), and ENERGY CONVERSION DEVICES, INC., Ovonic
                        Battery Company and United Solar Ovonic, LLC and their subsidiaries,
                        divisions, affiliates and joint ventures (collectively referred to as
                        &ldquo;ECD&rdquo;), have mutually agreed to terminate their employment
                        relationship effective Monday, March 31, 2008 and to provide benefits to
                        MS. BACON to assist her in her transition away from ECD.</font></p>
                    </td>
                </tr>
            </table>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, serif"><font size="2">2.</font></font>
                    </td>

                    <td width="95%">
                        <p>
                        <font size="2"><font face="Times New Roman, Times, serif"><u>CONSIDERATION</u>:</font></font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">ECD will provide the
                        following benefits as a result of the separation of MS. BACON from her
                        employment with ECD effective Monday, March 31, 2008.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, serif" size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;
                        SEPARATION PAY:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">Upon signing of this
                        Agreement, and after the seven (7) day revocation period has expired, MS.
                        BACON shall be eligible for up to Fifty-Two (52) Weeks&rsquo; base pay.
                        Severance, including any retroactive payment back to March 31, 2008, will
                        begin to be paid in the first full payroll period following expiration of
                        the seven (7) day revocation period explained below. ECD will deduct from
                        the separation pay payments: (1) all amounts owed to ECD by MS. BACON; (2)
                        all taxes to be withheld according to applicable federal, state and local
                        laws; (3) garnishments; (4) all support orders; (5) all tax liens; and (6)
                        any other court order directing deduction from an employee&rsquo;s
                        paycheck. There will be no lump sum payment. Since employment is
                        terminated, there will be no additional vacation, sick and/or holiday pay
                        during the severance period. Severance payments shall not be considered
                        wages under the terms of the ECD 401-K Plan.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, serif" size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;
                        MEDICAL &amp; DENTAL INSURANCE:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">If MS. BACON, at the
                        time of separation, was not a participant in ECD&rsquo;s group medical or
                        dental plans, MS. BACON will not be eligible for COBRA coverage under these
                        programs upon termination of employment.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para Flush Level 2" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%"><font face="Times New Roman, Times, Serif" size="2">If MS.
                    BACON is a participant in ECD&rsquo;s group medical or dental plans
                    <u>prior</u> to the time of separation, then MS. BACON regular group medical or
                    dental insurance will remain in effect through the termination date. In
                    accordance with federal law (COBRA), MS. BACON may, however, elect to continue
                    to participate in the group medical and dental plans of the</font> </td>
                </tr>
            </table>

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
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            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">1</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%"><font face="Times New Roman, Times, Serif" size="2">Company
                    generally until eighteen (18) months from the date of termination, or under
                    COBRA rules, until MS. BACON is covered under another group insurance plan,
                    whichever occurs first. A more detailed COBRA notice will be provided to MS.
                    BACON in a separate COBRA notification.</font> </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para Flush Level 2" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%"><font face="Times New Roman, Times, Serif" size="2">In
                    addition, upon signing this Revised Separation Agreement and upon receipt by
                    ECD of MS. BACON&rsquo;s COBRA election, ECD will continue to pay ECD&rsquo;s
                    pre-termination portion of the COBRA premium for medical and dental insurance
                    for the period of severance, unless MS. BACON obtains other medical or dental
                    group insurance under COBRA rules. MS. BACON&rsquo;s contribution to the COBRA
                    insurance premium will be deducted from the severance payments. In order to
                    receive this benefit, MS. BACON <u>must</u> elect COBRA coverage in a timely
                    manner. ECD will pay for its portion of the COBRA cost after a COBRA election
                    is made by MS. BACON and after seven (7) calendar days have elapsed since the
                    signing of this Agreement. After the period of severance, MS. BACON will be
                    responsible for entire COBRA premium.</font> </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, serif" size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;
                        TERMINATION OF OTHER EMPLOYEE BENEFITS:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">All other benefits,
                        including but not limited to, Company-paid life insurance, supplemental
                        life insurance, dependent life insurance, Company-paid accidental death and
                        dismemberment insurance, short-term and long-term disability plans,
                        vacation accrual, etc., cease on March 31, 2008. The supplemental life
                        insurance benefit may be subject to conversion rights. These policies may
                        be converted to individual policies. Conversion forms will be sent to MS.
                        BACON&rsquo;s home by the insurance carrier if MS. BACON meets the
                        eligibility requirements.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;
                        VACATION ACCRUAL:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">All accrued but
                        unused vacation days will be paid in the first payroll following
                        termination of employment in accordance with Company policy. It is
                        estimated that as of the date of termination there are 810 hours in MS.
                        BACON&rsquo;s vacation bank.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td align="right" width="5%">&nbsp;</td>

                    <td align="left" width="94%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2">E.&nbsp;&nbsp;&nbsp;&nbsp;
                        CONSULTING:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON will
                        provide consulting and funding services to ECD for business advice and
                        government relations and to support Ovonic Battery Company&rsquo;s (OBC)
                        activities to finalize the strategic alternatives for COBASYS and to
                        cooperate with ECD and OBC in the CTV arbitration on an &ldquo;as
                        needed&rdquo; basis. The Consulting Agreement and Funding Agreement have
                        been separately negotiated between the Parties and this</font></p>
                    </td>
                </tr>
            </table>

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
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            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">2</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="left">&nbsp;</p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td align="right" width="5%">&nbsp;</td>

                    <td align="left" width="94%">
                    <font face="Times New Roman, Times, Serif" size="2">Agreement is not dependent
                    on reaching an agreement on the Consulting and Funding Agreements. The amount
                    received by MS. BACON under the Consulting and Funding Agreements will not be
                    deducted from the severance pay set forth in this Agreement.</font> </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2">F.&nbsp;&nbsp;&nbsp;&nbsp;
                        Bonus:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">Contingent upon her
                        re-signing this Agreement following the last day of employment, MS. BACON
                        will receive a bonus of $50,000.00, minus normal payroll deductions payable
                        in the first payroll check following the expiration of the 7-day revocation
                        period. This payment is in lieu of any claim for payment under the proposed
                        AIP Plan. Should this Agreement be signed by MS. BACON prior to the date of
                        her employment separation, in order to receive this bonus payment, MS.
                        BACON will be required to re-sign this Agreement releasing all claims
                        between the date of signing this Agreement and her separation
                        date.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="90%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2">G.&nbsp;&nbsp;&nbsp;&nbsp;
                        OUTPLACEMENT ASSISTANCE:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">ECD will provide MS.
                        BACON with outplacement assistance, with the firm and program to be
                        determined by ECD. Outplacement must be elected by MS. BACON no later than
                        May 31, 2008.</font></p>
                    </td>
                </tr>
            </table>
            <br>
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            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">3.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>RELEASE OF
                        CLAIMS</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">In consideration of
                        the terms set forth in this Agreement, MS. BACON agrees to release ECD,
                        including Ovonic Battery Company and United Solar Ovonic, LLC and all of
                        their subsidiaries, divisions, affiliates, joint ventures, shareholders,
                        officers, directors, employees, insurers and agents of
                        <u>ALL</u><sup>*</sup> liability in connection with MS. BACON&rsquo;s
                        employment termination, including, but not limited to, any and all claims
                        under federal or state laws for discrimination or wrongful discharge,
                        including the Age Discrimination in Employment Act, (&ldquo;ADEA&rdquo;),
                        the Worker Adjustment and Retraining Notification Act (&ldquo;WARN&rdquo;)
                        (even if the WARN Act is triggered following MS. BACON&rsquo;s
                        termination).</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">4.</font>&nbsp;</p>
                    </td>

                    <td align="left" width="97%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>CONFIDENTIAL AND
                        PROPRIETARY INFORMATION</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS. BACON
                        acknowledges that during the course of her employment, she has been
                        entrusted with certain business, financial, technical, personnel and other
                        proprietary information and materials that are the property of ECD. MS.
                        BACON agrees not to communicate or disclose to any third party or use for
                        her own account, without written consent of ECD, any of the aforementioned
                        information</font></p>
                    </td>
                </tr>
            </table>

            <p></p>
            <hr align="left" width="25%" color="gray" noshade size="1">

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="38">
                        <p align="right">
                        <font face="Times New Roman, Times, Serif" size="2"><sup>*</sup></font></p>
                    </td>

                    <td width="11">
                    <font face="Times New Roman, Times, serif" size="2">&nbsp;</font> </td>

                    <td width="95%"><font face="Times New Roman, Times, Serif" size="2">A
                    representative listing of potential laws governing the employment relationship
                    which are being released by the employee is attached as Exhibit
                    &ldquo;A.<b>&rdquo;</b> This is not intended to be an exhaustive list, but
                    rather the types of claims and the extent to which they are being
                    released.</font> </td>
                </tr>
            </table>
            <br>
            <br>

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
            <!-- EEDocs PBStart-->
            <hr align="center" width="100%" noshade>
            <!-- EEDocs PBEnd-->

            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">3</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td align="right" width="5%">&nbsp;</td>

                    <td align="left" width="97%">
                    <font face="Times New Roman, Times, Serif" size="2">or material, except as
                    required by law, unless and until such information or material is necessary for
                    her use in connection with her consultancy agreement with ECD or such
                    information becomes generally available to the public through sources other
                    than MS. BACON. MS. BACON will return to ECD the originals and all copies of
                    any business records of ECD which are or were subject to her custody or
                    control, regardless of the sources from which such records were obtained
                    following the completion of her consultancy arrangement with ECD. MS. BACON
                    will certify that to the best of her knowledge and belief and after diligent
                    search and inquiry, she has done so following the end of the consultancy
                    arrangement with ECD. In addition, all business equipment shall be returned
                    following the end of the consultancy arrangement with ECD unless specifically
                    agreed in writing otherwise by ECD.</font> </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">5.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2"><u>NON-DISPARAGEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON will
                        not disparage, discredit or otherwise treat in any detrimental manner, ECD
                        or any of its division, subsidiaries, affiliates, joint ventures, officers,
                        directors and employees. MS. BACON will forfeit any right to receive the
                        benefits described above if MS. BACON engages in deliberate conduct or
                        makes public statements detrimental to the business or reputation of
                        ECD.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">6.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>REFERENCE
                        REQUESTS</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">Upon receipt of a
                        reference request directed to the Human Resources Department, ECD will only
                        release dates of employment, job positions held and salary if
                        requested.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">7.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2"><u>NON-SOLICITATION</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON
                        agrees that during the period of twelve (12) months from the date of her
                        termination, MS. BACON will not, directly or indirectly, on behalf of
                        herself or any other person or entity, without the prior written approval
                        of ECD, directly or indirectly: (i) induce any person or entity to leave
                        her or her employment with ECD, terminate an independent contractor
                        relationship with ECD or terminate or reduce any contractual relationship
                        with ECD; or (ii) induce or influence any customer, supplier or other
                        person that has a business relationship with ECD or any subsidiary,
                        division, affiliate or joint venture of ECD to discontinue or reduce the
                        extent of such relationship. The Parties agree that the determination of
                        the amount of damages to ECD would be difficult to determine and,
                        therefore, the Parties agree that should MS. BACON violate this Paragraph,
                        MS. BACON will pay as liquidated damages 33% of the solicited MS.
                        BACON&rsquo;s annualized base pay in a lump sum. This provision for
                        liquidated damages shall not preclude the right of ECD to seek equitable
                        relief through the issuance of an injunction prohibiting employment of the
                        solicited employee or further action by MS. BACON to interfere with the
                        business relationship with any customer or supplier.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
            <!-- EEDocs PBStart-->
            <hr align="center" width="100%" noshade>
            <!-- EEDocs PBEnd-->

            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">4</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush Level 1" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">8.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2"><u>NON-COMPETITION</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON
                        agrees that for the period of twelve (12) months from the date of the
                        termination of her employment or consultancy, whichever is greater, she
                        will not, directly or indirectly, on her behalf or any other person or
                        entity, without the prior written approval of ECD, own, manage, operate,
                        join, control, be employed by, assist, consult or participate in the
                        ownership, management, operation or control of, or be connected in any
                        manner, including but not limited to holding the positions of shareholder,
                        director, officer, consultant, independent contractor, employee, partner or
                        investor, with any Competing Enterprise. &ldquo;Competing Enterprise&rdquo;
                        means any person, corporation, partnership or other entity engaged in whole
                        or in part in a business which is in competition with ECD and its
                        divisions, subsidiaries, affiliates and joint ventures as of the date that
                        employment with ECD terminates.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para Flush Level 1" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td width="95%"><font face="Times New Roman, Times, Serif" size="2">The
                    restrictions in this Paragraph shall apply to the following geographic areas:
                    North America including the United States, Canada and Mexico. MS. BACON agrees
                    that the restrictions in this Paragraph are reasonable. MS. BACON also agrees
                    to provide any prospective employer with a copy of the non-competition
                    paragraph of this Agreement. In addition, the Parties agree that ECD shall be
                    entitled to recover, as liquidated damages, all after-tax earnings of MS. BACON
                    derived from violation of this Paragraph. This provision for liquidated damages
                    shall not preclude the right of ECD to seek equitable relief through the
                    issuance of an injunction prohibiting employment of MS. BACON in violation of
                    this Agreement. In addition, the time period specified in this Non-competition
                    paragraph shall be extended for the period of violation.</font> </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">9.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>INDIVIDUAL
                        AGREEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON
                        acknowledges that the consideration she is receiving pursuant to this
                        Agreement is not part of a plan or program and has been individually
                        negotiated between the Parties and that she is not entitled to additional
                        severance pay or benefits beyond the terms of this Agreement.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">10.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>TIME PERIOD FOR
                        REVIEW OF AGREEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON was
                        provided with a copy of the Separation Agreement on February 9, 2008 and
                        was provided with an opportunity of forty-five (45) calendar days to review
                        the Agreement and she was advised to consult with an attorney of MS.
                        BACON&rsquo;S choosing at her own expense. MS. BACON agrees that as a
                        result of negotiations for changes to the Agreement in the form of enhanced
                        benefits, she is waiving the restarting of the 45-day review period even if
                        the changes to this Agreement are deemed to be material. No benefits
                        provided by this Agreement will be made until the Agreement is signed and
                        the seven (7) day revocation period has expired.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
            <!-- EEDocs PBStart-->
            <hr align="center" width="100%" noshade>
            <!-- EEDocs PBEnd-->

            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">5</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush Level 1" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                        <p align="left"><font size="2">11.</font></p>
                    </td>

                    <td align="left" width="97%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>UNDERSTANDING OF
                        AGREEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">MS.&nbsp;BACON
                        acknowledges that she has read this entire Agreement, that she has had the
                        opportunity to consult with counsel at her own expense, and that she
                        understands all of its terms and knowingly and freely enters into the
                        Agreement. MS. BACON further acknowledges that she has been afforded
                        forty-five (45) calendar days to consider this Agreement from the date of
                        the original receipt of this Agreement, has been advised to seek review of
                        this Agreement by an attorney at MS. BACON&rsquo;s own expense, and that
                        she has seven (7) calendar days after its execution to revoke the
                        Agreement.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">12.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>ENTIRE
                        AGREEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">This Revised
                        Separation Agreement and Complete Release of Liability, together with any
                        previously signed confidentiality, non-solicitation, patent and non-compete
                        agreements, constitute the complete and entire Agreements between the
                        Parties relating to the termination of the employment relationship and
                        supersedes any and all previous agreements, representations or
                        understandings regarding termination of benefits. These Agreements may not
                        be changed, modified or terminated unless such changes are made in writing
                        and signed by both Parties. Any previously signed confidentiality,
                        non-solicitation, patent, or non-compete agreement shall remain in effect
                        following termination of the employment relationship and execution of this
                        Agreement.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">13.&nbsp;</font> </td>

                    <td width="95%">
                        <p>
                        <font face="Times New Roman, Times, Serif" size="2"><u>SEVERABILITY</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">Should any portion
                        of this Agreement be ruled invalid, it shall not affect the remaining
                        provisions of this Agreement, which shall remain in full force and
                        effect.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">14.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>GOVERNING
                        LAW</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">The Parties agree
                        that any disputes regarding this Revised Separation Agreement shall be
                        governed by the laws of the State of Michigan.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" --><br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">15.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>ARBITRATION OF
                        DISPUTES</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">The Parties agree
                        that any dispute over the terms of this Agreement or its enforcement shall
                        be resolved exclusively by final and binding arbitration pursuant to the
                        Employment Arbitration Rules and Mediation Procedures of the American
                        Arbitration Association. The award of the arbitrator may be filed in the
                        appropriate federal or circuit court in the state in which the employee was
                        employed. ECD and MS. BACON retain the right to seek equitable relief
                        pending the outcome of the arbitration proceedings with jurisdiction and
                        venue agreed to by the Parties in Oakland County Circuit Court.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p><!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" --></p>
            <!-- EEDocs PBStart-->
            <hr align="center" width="100%" noshade>
            <!-- EEDocs PBEnd-->

            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">6</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
            <!-- MARKER FORMAT-SHEET="Para Flush Level 1" FSL="Default" -->

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="top">
                    <td width="5%">
                    <font face="Times New Roman, Times, Serif" size="2">16.&nbsp;</font> </td>

                    <td width="95%">
                        <p><font face="Times New Roman, Times, Serif" size="2"><u>RE-SIGNING
                        AGREEMENT</u>:</font></p>

                        <p><font face="Times New Roman, Times, Serif" size="2">If this Revised
                        Separation Agreement is signed by MS. BACON prior to her last day of work
                        on March 31, 2008, MS. BACON will be required to re-sign this Agreement
                        releasing all claims between the date of signing this agreement and her
                        last day of employment as a condition for receipt of the $50,000.00
                        bonus.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->

            <p><font face="Times New Roman, Times, Serif" size="2">IN WITNESS WHEREOF, we have set
            our hands the day and year first written below.</font></p>

            <table cellspacing="0" cellpadding="0" width="600">
                <tr>
                    <td width="291"><font size="2">Dated: March 13, 2008</font></td>

                    <td width="22"><font size="2">/S/</font> </td>

                    <td>
                    </td>

                    <td width="287"><font size="2">&nbsp;Nancy&nbsp;M. Bacon</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td style="BORDER-TOP: black 1px solid" width="22" colspan="3">
                    <font size="2">NANCY&nbsp;BACON</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td width="22" colspan="2">
                    </td>

                    <td width="287">
                    </td>
                </tr>

                <tr style="PADDING-BOTTOM: 1.3em; PADDING-TOP: 1.3em">
                    <td width="291">&nbsp;</td>

                    <td colspan="3"><font size="2">ENERGY CONVERSION DEVICES, INC.</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td width="22" colspan="2">
                    </td>

                    <td width="287">
                    </td>
                </tr>

                <tr>
                    <td width="291">&nbsp;</td>

                    <td width="22" style="BORDER-BOTTOM: black 1px solid" colspan="2"><font size="2">/S/</font></td>

                    <td width="287" style="BORDER-BOTTOM: black 1px solid" ><font face="Times New Roman, Times, serif" size="2">&nbsp;Art
                    Rogers</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td width="22" colspan="2">
                    <font face="Times New Roman, Times, serif" size="2">By:</font></td>

                    <td width="287"><font size="2">Art
                    Rogers</font></td>
                </tr>

                <tr>
                    <td width="291"><font size="2">Dated: March 13, 2008</font> </td>

                    <td width="22" colspan="2"><font size="2">Its:</font> </td>

                    <td width="287"><font size="2">V.P., Human Resources &amp;
                    Administration</font></td>
                </tr>
            </table>
            <br>
            &nbsp; <!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" -->&nbsp;
            <font face="Times New Roman, Times, Serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</i></font>
            <!-- MARKER FORMAT-SHEET="Head Center Underline" FSL="Default" -->

            <p align="center"><font face="Times New Roman, Times, Serif" size="2"><u>RE-SIGNING OF
            REVISED SEPARATION AGREEMENT</u></font></p>
            <!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->

            <p><font face="Times New Roman, Times, Serif" size="2">I signed the Revised Separation
            Agreement on March __, 2008 and understand that the terms of the Agreement are now
            final and are not affected by my decision to re-sign the agreement. I am now re-signing
            this agreement following my employment separation date as a condition for receipt of
            the $50,000.00 bonus and I understand that I am releasing all claims specified in
            Paragraph 2 (F), as a condition for the receipt of this additional benefit beteen the
            date I signed the Agreement and my separation date. I understand that I have seven (7)
            days to revoke my Re-signing of the Agreement.</font></p>

            <p></p>

            <table cellspacing="0" cellpadding="0" width="600">
                <tr>
                    <td width="291"><font face="Times New Roman, Times, serif" size="2">Dated:
                    March 31, 2008</font></td>

                    <td colspan="2"><font size="2">&nbsp;/S/ Nancy&nbsp;M. Bacon</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td style="BORDER-TOP: black 1px solid" colspan="2"><font size="2">&nbsp;NANCY
                    BACON</font></td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td width="22">
                    </td>

                    <td width="287">
                    </td>
                </tr>

                <tr>
                    <td width="291">
                    </td>

                    <td width="22">
                    </td>

                    <td width="287">
                    </td>
                </tr>
            </table>
            <br>
            <br>

            <p></p>
            <hr align="center" width="100%" noshade>
            <!-- EEDocs PBEnd--><br>
            <br>

            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">7</font></p>
            <!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->

            <div style="PAGE-BREAK-AFTER: always">
            </div>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">ENERGY CONVERSION
            DEVICES, INC.</font></p>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">EXHIBIT
            &ldquo;A&rdquo;</font></p>
            <!-- MARKER FORMAT-SHEET="Head Center Underline" FSL="Default" -->

            <p align="center"><font face="Times New Roman, Times, Serif" size="2"><u>SCOPE OF
            RELEASE</u></font></p>
            <!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
            Release of all claims by the employee, as part of this Revised Separation Agreement, is
            intended and understood by all parties to release <u>all</u> claims by employee,
            without limitation, relating to the employment relationship. The list set forth below
            is a representative sample of the types of employment-related claims being released by
            the employee and is <u>not</u> intended to be a complete list.</font></p>
            <!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
            <u>Federal Law</u>: Title VII of the Civil Rights Act of 1964 (race, color, religion,
            national origin or sex); the 1991 Civil Rights Act; the Age Discrimination in
            Employment Act of 1967 (age); the Older Workers Benefit Protection Act
            (&ldquo;OWBPA&rdquo;) (age); the Vocational Rehabilitation Act of 1973 (handicap); The
            Americans with Disabilities Act of 1990 (Handicap); 42 U.S.C. Section 1981, 1986 and
            1988 (race); the Sarbanes-Oxley Act of 2002; the Employee Retirement Income Security
            Act (ERISA) (Pension and employee benefits); the Equal Pay Act of 1963 (prohibits pay
            differentials based on sex); the Immigration Reform and Control Act of 1986; Executive
            Order 11246 (race, color, religion, sex or national origin); Executive Order 11141
            (age); Vietnam Era Veterans Readjustment Assistance Act of 1974 (Vietnam era veterans
            and disabled veterans); the Federal Railroad Safety Act (45 U.S.C. Section 421 <i>et.
            seq.</i>); Section 301 of the Labor Management Relations Act, 29 U.S.C. Section 185
            <u>et</u>. <u>seq</u>. (suits for breach of the Collective Bargaining Agreement); the
            Fair Labor Standards Act (minimum wage and overtime pay); the Labor Management
            Relations Act (rights protected by the National Labor Relations Board); the
            Occupational Safety and Health Act (safety matters); the Worker Adjustment and
            Retraining Notification Act (&ldquo;WARN&rdquo;) (notification requirements for
            employers who are curtailing or closing an operation), the Consolidated Omnibus Budget
            Reconciliation Act of 1985 (COBRA) (which provides health insurance continuation
            coverage for eligible employees), the Family and Medical Leave Act of 1993
            (&ldquo;FMLA&rdquo;), and Federal Common Law.</font></p>
            <!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
            <u>Michigan Law</u>: The Elliott-Larsen Civil Rights Act (race, color, religion,
            national origin, age, sex, marital status, height and weight) and any and all
            derivative claims; the Michigan Persons With Disabilities Act (handicap); the Michigan
            Wage Payment Act (MCLA 408.471) (wages and benefits); AIDS Testing and Confidentiality
            Act; Equal Pay; the Polygraph Protection Act of 1981 (restrictions on the use of
            polygraphs); Whistleblower Protection; Jury Service; Subpoenaed Victim; Job Reference
            Immunity; all as amended, and the common law of the State of Michigan; tort; breach of
            express or implied employment contract; wrongful discharge; workers&rsquo; compensation
            retaliation; tortious interference with contractual relations and loss of consortium,
            constructive discharge or any other law applicable to the employment
            relationship.</font></p>
            <!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->

            <p>
            <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
            <u>NOTICE</u>: Should you have any questions regarding the scope of this Release, it is
            strongly recommended that you seek the advice of an attorney of your choosing, and at
            your own expense, <u>before</u> signing this Agreement.</font></p>
            <!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" --><br>

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            <!-- EEDocs PBStart-->
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            <p><br>
            <!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --></p>

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">8</font></p>
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>ex31p1_ceo-certif.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER
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<p style=' margin-bottom:6pt; margin-top:6pt; text-indent:0.5in;text-align:right;'><font size=1></font><font size=2>Exhibit 31.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CERTIFICATION OF CEO PURSUANT TO </font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</font></B></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:6pt;text-align:justify;'><font size=2>I, Mark D. Morelli, Chief Executive Officer of Energy Conversion Devices, Inc., certify that:</font></p>




<p style=' margin-bottom:6pt; margin-top:12pt;text-align:justify;'><font size=2>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Energy Conversion Devices, Inc.;</font></p>


<p style=' margin-bottom:6pt; margin-top:12pt;text-align:justify;'><font size=2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</font></p>

<p style=' margin-bottom:6pt; margin-top:12pt;text-align:justify;'><font size=2>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</font></p>

<p style=' margin-bottom:6pt; margin-top:12pt;text-align:justify;'><font size=2>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</font></p> </td> </tr></table>
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        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;</font></p> </td> </tr></table>
</div>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and </font></p> </td> </tr></table>
</div>



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<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>d)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting. </font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:6pt; margin-top:12pt;text-align:justify;'><font size=2>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of registrant&#146;s Board of Directors (or persons performing the equivalent functions):</font></p>


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        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>
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        <td width="36" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b)</font></p> </td>
        <td  valign=top style='padding:6.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date: May 8, 2008</font></p> </td>
        <td width="45%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt; border-bottom: solid black 1px;'><font size=2>/S/ Mark D. Morelli</font></p> </td> </tr>

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        <td nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mark D. Morelli</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Executive Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>ex31p2_cfo-certif.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER
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            <p align="right"><font face="Times New Roman, Times, Serif" size="2">Exhibit
            31.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
            <!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->

            <p align="center"><font face="Times New Roman, Times, Serif" size="2">CERTIFICATION OF
            CFO PURSUANT TO<br>
            SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</font></p>

            <p align="justify"><font face="Times New Roman, Times, Serif" size="2">I, Sanjeev
            Kumar, Chief Financial Officer of Energy Conversion Devices, Inc., certify
            that:</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p align="justify">
            <font face="Times New Roman, Times, Serif" size="2">1.&nbsp;&nbsp;&nbsp;&nbsp; I have
            reviewed this quarterly report on Form 10-Q of Energy Conversion Devices,
            Inc.;</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p align="justify">
            <font face="Times New Roman, Times, Serif" size="2">2.&nbsp;&nbsp;&nbsp;&nbsp; Based on
            my knowledge, this report does not contain any untrue statement of a material fact or
            omit to state a material fact necessary to make the statements made, in light of the
            circumstances under which such statements were made, not misleading with respect to the
            period covered by this report;</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p align="justify">
            <font face="Times New Roman, Times, Serif" size="2">3.&nbsp;&nbsp;&nbsp;&nbsp; Based on
            my knowledge, the financial statements, and other financial information included in
            this report, fairly present in all material respects the financial condition, results
            of operations and cash flows of the registrant as of, and for, the periods presented in
            this report;</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p align="justify">
            <font face="Times New Roman, Times, Serif" size="2">4.&nbsp;&nbsp;&nbsp;&nbsp; The
            registrant&rsquo;s other certifying officer and I are responsible for establishing and
            maintaining disclosure controls and procedures (as defined in Exchange Act Rules
            13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
            Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush Level 1" FSL="Default" -->

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                <tr valign="top">
                    <td width="4%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td align="JUSTIFY" width="3%">
                    <font face="Times New Roman, Times, Serif" size="2">a)</font> </td>

                    <td align="JUSTIFY" width="93%">
                        <p align="justify">
                        <font face="Times New Roman, Times, Serif" size="2">Designed such
                        disclosure controls and procedures, or caused such disclosure controls and
                        procedures to be designed under our supervision, to ensure that material
                        information relating to the registrant, including its consolidated
                        subsidiaries, is made known to us by others within those entities,
                        particularly during the period in which this report is being
                        prepared;</font></p>
                    </td>
                </tr>

                <tr valign="top">
                    <td>
                    </td>

                    <td align="JUSTIFY">
                    <font face="Times New Roman, Times, Serif" size="2">b)</font> </td>

                    <td align="JUSTIFY">
                        <p align="justify">
                        <font face="Times New Roman, Times, Serif" size="2">Designed such internal
                        control over financial reporting, or caused such internal control over
                        financial reporting to be designed under our supervision, 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;</font></p>
                    </td>
                </tr>

                <tr valign="top">
                    <td>
                    </td>

                    <td align="JUSTIFY">
                    <font face="Times New Roman, Times, Serif" size="2">c)</font> </td>

                    <td align="JUSTIFY">
                        <p align="justify">
                        <font face="Times New Roman, Times, Serif" size="2">Evaluated the
                        effectiveness of the registrant&rsquo;s disclosure controls and procedures
                        and presented in this report our conclusions about the effectiveness of the
                        disclosure controls and procedures, as of the end of the period covered by
                        this report based on such evaluation; and</font></p>
                    </td>
                </tr>

                <tr valign="top">
                    <td>
                    </td>

                    <td align="JUSTIFY">
                    <font face="Times New Roman, Times, Serif" size="2">d)</font> </td>

                    <td align="JUSTIFY">
                        <p align="justify">
                        <font face="Times New Roman, Times, Serif" size="2">Disclosed in this
                        report any change in the registrant&rsquo;s internal control over financial
                        reporting that occurred during the registrant&rsquo;s most recent fiscal
                        quarter (the registrant&rsquo;s fourth fiscal quarter in the case of an
                        annual report) that has materially affected, or is reasonably likely to
                        materially affect, the registrant&rsquo;s internal control over financial
                        reporting.</font></p>
                    </td>
                </tr>
            </table>
            <br>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->

            <p align="justify">
            <font face="Times New Roman, Times, Serif" size="2">5.&nbsp;&nbsp;&nbsp;&nbsp; The
            registrant&rsquo;s other certifying officer and I have disclosed, based on our most
            recent evaluation of internal control over financial reporting, to the
            registrant&rsquo;s auditors and the audit committee of registrant&rsquo;s Board of
            Directors (or persons performing the equivalent functions):</font></p>
            <!-- MARKER FORMAT-SHEET="Para (List) Flush Level 1" FSL="Default" -->

            <table cellspacing="0" cellpadding="7" width="100%">
                <tr valign="top">
                    <td width="4%">
                    </td>

                    <td align="JUSTIFY" width="3%">
                    <font face="Times New Roman, Times, Serif" size="2">a)</font> </td>

                    <td align="JUSTIFY" width="93%">
                        <p align="justify"><font face="Times New Roman, Times, Serif" size="2">All
                        significant deficiencies and material weaknesses in the design or operation
                        of internal control over financial reporting which are reasonably likely to
                        adversely affect the registrant&rsquo;s ability to record, process,
                        summarize and report financial information; and</font></p>
                    </td>
                </tr>

                <tr valign="top">
                    <td>
                    </td>

                    <td align="JUSTIFY">
                    <font face="Times New Roman, Times, Serif" size="2">b)</font> </td>

                    <td align="JUSTIFY">
                        <p align="justify"><font face="Times New Roman, Times, Serif" size="2">Any
                        fraud, whether or not material, that involves management or other employees
                        who have a significant role in the registrant&rsquo;s internal control over
                        financial reporting.</font></p>
                    </td>
                </tr>
            </table>
            <br>

            <table cellspacing="0" cellpadding="0" width="100%">
                <tr valign="bottom">
                    <th>
                    </th>

                    <th>
                    </th>
                </tr>

                <tr valign="top">
                    <td width="55%"><font face="Times New Roman, Times, Serif" size="2">Date: May
                    8, 2008</font></td>

                    <td width="45%">
                    <font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>
                </tr>

                <tr valign="top">
                    <td><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td style="BORDER-BOTTOM: black 1px solid">
                    <font face="Times New Roman, Times, Serif" size="2">/S/ Sanjeev Kumar</font>
                    </td>
                </tr>

                <tr valign="top">
                    <td><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font> </td>

                    <td><font face="Times New Roman, Times, Serif" size="2">Sanjeev Kumar<br>
                    Chief Financial Officer</font> </td>
                </tr>
            </table>


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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>ex32-sec906.htm
<DESCRIPTION>SECTION 1350 CERTIFICATIONS
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<P ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<p>&nbsp;</p>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATIONS PURSUANT
TO SECTION <BR>906 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></P>

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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18
U.S.C. SECTION 1350) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the Quarterly
Report of Energy Conversion Devices, Inc. (the &#147;Company&#148;) on Form 10-Q for the
quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), Mark D. Morelli, Chief Executive Officer of the
Company, and Sanjeev Kumar, Chief Financial Officer of the Company, respectively, do each
hereby certify, pursuant to &sect; 906 of the <I>Sarbanes-Oxley</I> Act of 2002 (18 U.S.C.
&sect; 1350), that based on his knowledge: </FONT></P>

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               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The Report fully complies with the requirements of Section 13(a) or 15(d) of the
               Securities Exchange Act of 1934; and </FONT></P></TD>
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               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The information contained in the Report fairly presents, in all material
               respects, the financial condition and results of operations of the Company. </FONT></P></TD>
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     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/S/ Mark D. Morelli</FONT></TD></TR>
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     <TD STYLE="border-top:black solid 1px"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Mark D. Morelli<BR>Chief Executive Officer<BR>May 8, 2008</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/S/ Sanjeev Kumar</FONT></TD></TR>
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     <TD STYLE="border-top:black solid 1px"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Sanjeev Kumar<BR>Chief Financial Officer<BR>May 8, 2008</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
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