32878--8/29/2007--ENERGY_CONVERSION_DEVICES

related topics

{product, market, service}

{product, candidate, development}

{property, intellectual, protect}

{customer, product, revenue}

{acquisition, growth, future}

{operation, international, foreign}

{cost, contract, operation}

{condition, economic, financial}

{financial, litigation, operation}

{cost, regulation, environmental}

{personnel, key, retain}

{control, financial, internal}

{regulation, government, change}

We have a history of losses and our future profitability is uncertain. We expect that we will need to obtain significant additional financing to continue to operate our business, including significant capital expenditures to increase our production capacity, and financing may be unavailable or available only on disadvantageous terms. We are rapidly expanding our manufacturing capacity for PV products in order to meet expected demand, and our revenues and profits will depend upon our ability to successfully complete this expansion and then to sell our PV products at higher volumes to match our expanded capacity. We have international operations, which we are expanding, that are vulnerable to risks associated with doing business in foreign countries. A portion of our revenues and profits are dependent upon licensing arrangements and joint ventures, and our licensees and joint venture partners may be unwilling or unable to devote their financial resources and manufacturing and marketing capabilities to commercialize products based on our technologies. Additional research and development efforts will be required before certain products based on our technologies can be manufactured and sold commercially, and there can be no assurance that such efforts will be successful. It is uncertain that the market will accept our products once the technology has been developed and commercial-scale manufacturing has been achieved. We and our joint ventures and licensees may not be able to manufacture products based on our technologies successfully on a commercial scale. We and our joint ventures and licensees may experience performance problems with key suppliers or subcontractors. Other companies, many of which have greater resources than we have, may develop competing products or technologies which cause products based on our technologies to become obsolete or noncompetitive. We receive a significant portion of our revenues from a small number of customers. Adverse business or financial conditions affecting the automotive industry may have a material adverse effect on our Cobasys joint venture and our NiMH battery business. Our Cobasys joint venture continues to require substantial additional funding, which we may be required to provide beginning in January 2008. Our government product development and research contracts may be terminated by unilateral government action, or we may be unsuccessful in obtaining new government contracts to replace those which have been terminated or completed. The reduction or elimination of government incentives related to solar power could cause our revenues to decline. We may suffer the loss of key personnel or may be unable to attract and retain qualified personnel to maintain and expand our business. High raw material costs could impact our profitability and our ability to successfully develop our emerging technologies. We may become subject to legal or regulatory proceedings which may reach unfavorable resolutions. We are subject to a variety of federal, state and local laws, rules and regulations related to the discharge or disposal of toxic, volatile or other hazardous chemicals. Our success depends in part upon our ability to protect our intellectual property and our proprietary technology including our trade secrets and other confidential information. We may be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming. Third parties may own or control patents or patent applications that are infringed by our products or technologies.

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32878--8/29/2007--ENERGY_CONVERSION_DEVICES_INC