1176193--9/15/2008--OPEN_ENERGY

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{product, market, service}

{acquisition, growth, future}

{customer, product, revenue}

{property, intellectual, protect}

{regulation, government, change}

{control, financial, internal}

{interest, director, officer}

{stock, price, operating}

{debt, indebtedness, cash}

{condition, economic, financial}

{provision, law, control}

{personnel, key, retain}

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The execution of our business plan will require substantial funds. If we are unable to acquire additional financing, we may be forced to discontinue our operations. Depending on our method of raising funds, now and in the future, your shares may be diluted. New home construction in the U.S. is currently slowing, and doing so fairly dramatically in several areas where the Company s products are offered. This building slow-down could negatively impact our sales. Our auditors have expressed substantial doubt regarding our ability to continue as a going concern. We expect our operating results to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline. Evaluating our business and future prospects may be difficult due to the rapidly changing technological and market landscape. We face intense competition from other companies producing solar power and other energy generation products. If we fail to compete effectively, we may be unable to increase our market share and sales. There is a shortage of semi-conductor grade silicon and the PV cells made from this material, upon which our products depend, that may constrain our revenue growth. Additionally, we may not have sufficient financial resources to take advantage of supply opportunities as they may arise. We depend on a limited number of suppliers for the laminates and cells necessary to manufacture our products, and the loss or interruption of supply would negatively impact sales and damage our reputation with our customers. Our products may not gain market acceptance, which would prevent us from achieving sales and market share. Technological changes in the solar power industry could render our products uncompetitive or obsolete, which could prevent us from achieving market share and sales. The reduction or elimination of government economic incentives could prevent us from achieving sales and market share. Existing regulations and changes to such regulations may present technical, regulatory and economic barriers to the purchase and use of solar power products, which may significantly reduce demand for our products. Problems with product quality or product performance may cause us to incur warranty expenses and prevent us from achieving sales and market share, particularly if we introduce new technologies. If solar power technology is not suitable for widespread adoption or sufficient demand for solar power products does not develop or takes longer to develop than we anticipate, we would be unable to achieve sales and market share. If we are unable to protect our intellectual property adequately, we could lose our competitive advantage in the solar power market. Failure to adequately protect our trademark rights could cause us to lose market share and cause our sales to decline. Material weaknesses in our disclosure controls and procedures and our internal control over financial reporting, if not remedied effectively, could prevent us from reporting our financial results on a timely and accurate basis and result in a decrease in the trading price of our common stock and otherwise seriously harm our business. There are a large number of shares underlying our convertible debentures and warrants that may be available for future sale. Our existing stockholders may experience immediate and substantial dilution resulting from the issuance of these shares and the sale of these shares may depress the future market price of our common stock. Our senior lender has a general security interest in our inventory, specified accounts receivable and our cash accounts, which collectively represent substantially all of our liquid assets. If we were to default under the terms of our loan agreement, our lender would have the right to foreclose on these assets. Our failure to withhold for or pay federal and state employment and income taxes associated with the vesting or issuance of shares of restricted stock granted to our employees may result in significant liabilities for which we may not have sufficient cash to satisfy. Nevada law may have the effect of deterring hostile takeovers or delaying changes in control of our management, which could depress the market price of our common stock. Our success depends on our ability to retain our key personnel. Our growth may not be manageable and our business could suffer as a result. We may not address successfully the problems encountered in connection with any recent and potential future acquisitions. We have not paid dividends on our common stock in the past and do not anticipate paying dividends on our common stock in the foreseeable future. We are subject to significant corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing and future requirements, could adversely affect our business. Our common stock is subject to penny stock rules. If a letter agreement with one of our investors were held to be in violation of Section 5 of the Securities Act of 1933, we could be required to repurchase certain securities sold in a previous offering.

Full 10-K form ▸

1176193--9/15/2008--OPEN_ENERGY_CORP