Solar Energy Initiatives, Inc. - FORM 10-Q

Attached files

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EX-31.2 - EXHIBIT 31.2 - Solar Energy Initiatives, Inc.	ex312.htm
EX-31.1 - EXHIBIT 31.1 - Solar Energy Initiatives, Inc.	ex311.htm
EX-32.1 - EXHIBIT 32.1 - Solar Energy Initiatives, Inc.	ex321.htm
EX-32.2 - EXHIBIT 32.2 - Solar Energy Initiatives, Inc.	ex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

-------------------------

FORM 10-Q

(MARK ONE)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended April 30, 2011

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to ___________

http://www.solarenergyinitiatives.com/index.html

Solar Energy Initiatives, Inc.

(Exact name of registrant as specified in its charter)

Delaware	333-148155	20-5241121
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

818 A1A North

Suite 202

Ponte Vedra Beach, Florida 32082

(Address of principal executive offices including zip code)

(904) 644-6090

Registrant’s telephone number, including area code:

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. Yes [X] No [ ]

Indicate by a check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [ ]

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

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: as of June 16, 2011 the Company had 545,549,132 shares of its common stock, par value per share $0.001, issued and outstanding.

SOLAR ENERGY INITIATIVES, INC.

FORM 10−Q FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2011

		Page No.

PART I	FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)	F-1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	8
Item 4.	Controls and Procedures	8

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	9
Item 1A.	Risk Factors	9
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	19
Item 4.	[Removed and Reserved]	19
Item 5.	Other Information	19
Item 6.	Exhibits	20

SIGNATURES		21

Cautionary Statement Regarding Forward-Looking Statements

This Report on Form 10-Q contains forward-looking statements. Forward-looking statements are statements that do not represent historical facts. We use words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “continue” and similar expressions to identify forward-looking statements. Forward-looking statements in this Report on Form 10-Q include, but are not limited to, those discussed in the section entitled "Management's Discussion and Analysis or Plan of Operation”, our plans and expectations regarding future financial results, operating results, business strategies, projected costs, products, competitive positions, management’s plans and objectives for future operations, and industry trends. These forward-looking statements are based on information available to us as of the date of this Report on Form 10-Q and current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks and uncertainties include a variety of factors, some of which are beyond our control. Please see “Item 1A: Risk Factors” and our other filings with the Securities and Exchange Commission for additional information on risks and uncertainties that could cause actual results to differ. These forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we are under no obligation to, and expressly disclaim any responsibility to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Estimates of future financial results are inherently unreliable.

From time to time, representatives of Solar Energy Initiatives, Inc. (f/k/a NP Capital Corp.) ("NP Capital,” "Solar Energy,” the ”Company," “we,” “our,” or “us”) may make public predictions or forecasts regarding the Company's future results, including estimates regarding future revenues, expense levels, earnings or earnings from operations. Any forecast regarding the Company's future performance reflects various assumptions. These assumptions are subject to significant uncertainties, and, as a matter of course, many of them will prove to be incorrect. Further, the achievement of any forecast depends on numerous factors (including those described in this discussion), many of which are beyond the Company's control. As a result, there can be no assurance that the Company's performance will be consistent with any management forecasts or that the variation from such forecasts will not be material and adverse. Investors are cautioned not to base their entire analysis of the Company's business and prospects upon isolated predictions, but instead are encouraged to utilize the entire available mix of historical and forward-looking information made available by the Company, and other information affecting the Company and its products, when evaluating the Company's prospective results of operations. In addition, representatives of the Company may occasionally comment publicly on the perceived reasonableness of published reports by independent analysts regarding the Company's projected future performance. Such comments should not be interpreted as an endorsement or adoption of any given estimate or range of estimates or the assumptions and methodologies upon which such estimates are based. Undue reliance should not be placed on any comments regarding the conformity, or lack thereof, of any independent estimates with the Company's own present expectations regarding its future results of operations. The methodologies employed by the Company in arriving at its own internal projections and the approaches taken by independent analysts in making their estimates are likely different in many significant respects. Although the Company may presently perceive a given estimate to be reasonable, changes in the Company's business, market conditions or the general economic climate may have varying effects on the results obtained through the use of differing analyses and assumptions. The Company expressly disclaims any continuing responsibility to advise analysts or the public markets of its view regarding the current accuracy of the published estimates of outside analysts. Persons relying on such estimates should pursue their own independent investigation and analysis of their accuracy and the reasonableness of the assumptions on which they are based.

The following information should be read in conjunction with the Financial Statements filed on Form 10K as of July 31, 2010 and the condensed consolidated Financial Statements and the accompanying Notes to condensed consolidated Financial Statements included in this Report on Form 10-Q. Our fiscal year ends on July 31 of the applicable calendar year. All references to fiscal periods apply to our fiscal quarters or year which ends on the last day of the calendar month end.

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

Solar Energy Initiatives, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)			(Audited)
	April 30, 2011			July 31, 2010
ASSETS

Current assets
Cash and cash equivalents	$	20,659		$	30,153
Accounts receivable, net		15,950			26,124
Other receivable from equity method investee		-			530,274
Inventory		30,872			208,417
Prepaid and other current assets		4,451			2,789
Total current assets		71,932			797,757


Investment in equity method investee		-			30,000
Fixed assets, net		19,474			25,369
Deposits		-			3,598
Total assets	$	91,406		$	856,726

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$	997,576		$	1,158,588
Accounts payable, related parties		-			20,352
Commissions payable		-			1,882
Due to related parties		76,735			280,638
Accrued expenses		25,451			242,309
Deferred revenue		-			79,230
Convertible debentures, net		104,937			144,310
Total current liabilities		1,204,699			1,927,309

Commitments and contingencies
Stockholders' deficit
Preferred stock, $0.001 par; 10,000,000 authorized
0 and 0 issued and outstanding, respectively		-			-
Common stock, $0.001 par; 750,000,000 authorized
160,016,426 and 35,405,535 issued and outstanding,
respectively		160,017			35,406
Common stock payable		206,141			-
Paid-in capital		13,679,938			10,564,804
Deferred compensation		(205,608	)		(582,535	)
Common stock subscription		-			(20,000	)
Accumulated deficit		(14,953,781	)		(11,002,334	)
Total Solar Energy Initiative Inc shareholder's deficit		(1,113,293	)		(1,004,659	)
Non-controlling interest		-			(65,923	)
Total stockholders' deficit		(1,113,293	)		(1,070,583	)
Total liabilities and stockholders' deficit	$	91,406		$	856,726

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-1

Solar Energy Initiatives, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended			For the Three Months Ended
	April 30, 2011			April 30, 2010

Revenues, net	$	520,865		$	732,199
Cost of sales		492,282			600,978
Gross profit		28,583			131,221

Operating expenses
Selling, general and administrative		543,064			1,631,219
Total operating expenses		543,064			1,631,219

Loss from operations		(514,481	)		(1,499,998	)

Other income (expense)		(1,182,976	)		(431,310	)
Interest expense		(31,602	)		(48,225	)
Total other income (expense)		(1,214,578	)		(479,535	)

Loss before provision for income taxes		(1,729,059	)		(1,979,533	)
Provision for income taxes		-			-
Net loss		(1,729,059	)		(1,979,533	)

Loss attributable to non-controlling interest		-			(165,990	)
Loss attributable to Solar Energy Initiatives, Inc.	$	(1,729,059	)	$	(1,813,543	)

Net loss attributable to Solar Energy Iniatives, Inc.` per share – basic and diluted	$	(0.02	)	$	(0.06	)

Weighted average shares outstanding – basic and diluted		96,406,617			28,633,156

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

Solar Energy Initiatives, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Nine Months Ended			For the Nine Months Ended
	April 30, 2011			April 30, 2010

Revenues, net	$	1,285,770		$	3,017,656
Cost of sales		1,049,613			2,325,515
Gross profit		236,157			692,141

Operating expenses
Selling, general and administrative		2,952,320			4,126,215
Total operating expenses		2,952,320			4,126,215

Loss from operations		(2,716,163	)		(3,434,074	)

Other income (expense)		(1,182,976	)		(433,458	)
Interest expense		(217,991	)		(110,044	)
Total other income (expense)		(1,400,967	)		(543,502	)

Loss before provision for income taxes		(4,117,130	)		(3,977,576	)
Provision for income taxes		-			-
Net loss		(4,117,130	)		(3,977,576	)

Loss attributable to non-controlling interest		(165,683	)		(245,944	)
Loss attributable to Solar Energy Initiatives, Inc.	$	(3,951,447	)	$	(3,731,632	)

Net loss attributable to Solar Energy Iniatives, Inc.` per share – basic and diluted	$	(0.07	)	$	(0.14	)

Weighted average shares outstanding – basic and diluted		58,772,103			25,838,174

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

Solar Energy Initiatives, Inc.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

	Common Stock						Additional Paid-in			Deferred			Stock		Common Stock			Accumulated			Non-Controlling			Total Stockholders
	Shares			Amount			Capital			Comp			Payable		Subscription			Deficit			Interest			Equity

Balances, July 31, 2010		35,405,535		$	35,406		$	10,564,804		$	(582,535	)	$	-	$	(20,000	)	$	(11,002,334	)	$	(65,923	)	$	(1,070,583	)

Shares issued for cashless warrants		154,320			154			(154	)																-

Shares issued for payment of services, including accoutns payable of $30,333		477,778			478			99,855																	100,333

Shares issued for retroactive treatment of share price		1,495,744			1,496			177,994																	179,490

Shares cancelled		(90,000	)		(90	)		(19,910	)							20,000									-

Shares issued for employee compensation		500,000			500			77,500																	78,000

Shares issued for deferred compensation		800,000			800			103,200			(104,000	)													-

Amortization of deferred compensation expense											296,627														296,627

Shares issued for private placement, net of offering costs		3,482,027			3,482			321,518																	325,000

Discount on notes due to beneficial conversion feature								43,360																	43,360

Acquisition and ownership changes in subsidiary								485,294			(307,040	)										94,678			272,932

Net loss																			(1,274,311	)		(78,585	)		(1,352,896	)

Balances, October 31, 2010		42,225,404		$	42,225		$	11,853,461		$	(696,948	)	$	-	$	-		$	(12,276,645	)	$	(49,830	)	$	(1,127,736	)

Shares issued for convertible debt		3,830,386			3,830			125,170																	129,000

Shares issued for payment of services		917,600			918			37,276			(28,544	)		50											9,700

Amortization of deferred compensation expense											353,999														353,999

Shares cancelled		(434,615	)		(434	)		434																	-

Discount on notes due to beneficial conversion feature								34,672																	34,672

Acquisition and ownership changes in subsidiary								(49,042	)		106,954											136,928			194,840

Net loss																			(948,077	)		(87,098	)		(1,035,175	)

Balances, January 31, 2011		46,538,775		$	46,539		$	12,001,971		$	(264,539	)	$	50	$	-		$	(13,224,722	)	$	-		$	(1,440,701	)

Shares issued for convertible debt		50,794,147			50,794			275,923																	326,717

Shares issued for payment of services		51,774,414			51,774			257,698			(70,325	)		1,900											241,048

Amortization of deferred compensation expense											177,896														177,896

Discount on notes due to beneficial conversion feature								38,586																	38,586

Rachet provisions and settlement with shareholders		10,909,090			10,909			1,105,760			(48,640	)		204,191											1,272,220

Net loss																			(1,729,059	)					(1,729,059	)

Balances, April 30, 2011		160,016,426		$	160,016		$	13,679,938		$	(205,608	)	$	206,141	$	-		$	(14,953,781	)	$	-		$	(1,113,294	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-4

Solar Energy Initiatives, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended			For the Nine Months Ended
	April 30, 2011			April 30, 2010


CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,117,130	)		(3,977,576	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		5,904			6,502
Stock based compensation		1,551,130			882,250
Stock issued for retroactive treatment of common stock		179,490			-
Ratchet provisions		1,260,000			-
Convertible Debenture Amortization		339,962			-
Impairment of intangible assets		-			310,000
Subsidiary stock-based compensation		-			303,491
Stock issued for loan fees		-			71,000
Changes in operating assets and liabilities:
Accounts receivable		10,174			(446,891	)
Other receivables		30,000			120,532
Other receivables - Investee		530,274			-
Inventory		177,545			(1,233,659	)
Prepaid expenses and other current assets		(1,662	)		(128,146	)
Deposits and other assets		3,598			1,091
Accounts payable		(59,939	)		1,473,973
Accounts payable, related party		(20,352	)		-
Commissions payable		(1,882	)		-
Accrued expenses		(163,781	)		92,781
Deferred revenue		(79,230	)		(5,112	)
Due to related party		(155,804	)		94,948
Net cash used by operating activities		(511,702	)		(2,434,816	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		(8,187	)		(8,008	)
Investment in subsidiary assets		(995,859	)		-
Net cash used by investing activities		(1,004,046	)		(8,008	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from private placements		325,000			614,952
Proceeds from warrant call		-			774,605
Proceeds received from subsidiary stock sales		-			300,000
Proceeds from notes		190,000			-
Proceeds from subsidiary loan		991,255			-
Net cash provided by financing activities		1,506,255			1,689,557

Net increase (decrease) in cash and cash equivalents		(9,493	)		(753,267	)
Net cash provided from non-controlling interest		-			-
Cash and cash equivalents at beginning of year		30,153			1,005,628

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	20,660		$	252,361

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-5

Supplemental schedule of non-cash investing and financing activities:

	For the Nine Months Ended			For the Nine Months Ended
	April 30, 2011			April 30, 2010
SUPPLEMENTAL DISCLOSURES
Cash operating activities:
Interest paid	$	217,991		$	15,310
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued for deferred compensation	$	-		$	517,500
Shares cancelled related to subscription	$	-		$	-
Stock payable for services	$	-		$	15
Common stock issued for loan fees	$	-		$	71,000
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Spin off of Solar Park:
Cash	$	4,604			-
Other assets		40,204			-
Property and equipment		8,178			-
Accounts payable		(64,738	)		-
Accrued expenses		(53,077	)		-
Due to Solar Park		51,901			-
Notes payable		(97,000	)		-
Deferred compensation		488,251			-
Stock payable		(268	)		-
Additional paid in capital		(378,056	)		-
Total Spin -Off	$	-		$	-

Stock issued for deferred compensation	$	923,549		$	493,111
Discounts from warrants and beneficial conversion feature	$	116,618		$	-
Subsidiary options granted for other assets	$	40,204		$	-
Stock issued for accounts payable	$	36,333		$	-
Stock issued for conversion of notes payable	$	455,717		$	-
Common stock subscription cancelled	$	(20,000	)	$	-
Due to related parties purchased by third parties	$	100,000		$	-
Stock payable for services	$	(206,141	)	$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-6

Solar Energy Initiatives, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF APRIL 30, 2011

(UNAUDITED)

1.	NATURE OF OPERATIONS

Company Overview

Solar Energy Initiatives, Inc. (the “Company”) was formed on June 20, 2006 and is a Delaware Corporation. On August 20, 2008, Solar Energy, Inc., a Florida corporation, was formed as a wholly owned subsidiary of the Company to operate acquired solar assets, and the relationship management of an independent solar equipment dealer network. On September 25, 2009, Solar Energy Initiatives, Inc. formed a wholly owned subsidiary Solar Park Initiatives, Inc. (SPI), a Nevada corporation, to develop large utility-scale solar projects. On January 19, 2011 the Company completed a distribution of 21,326,912 shares it held with Solar Park Initiatives, Inc. (SPI) to the Company’s shareholders, reducing its ownership in SPI to 22.5%. In March 2010, Solar Energy Initiatives, Inc. formed SNRY Power, Inc. During the second quarter and continuing through the third quarter, the Company experienced and continues to experience operational difficulties that were exacerbated by the lack of capital. As a result, the Company curtailed a significant portion of its operations although it continues to pursue its business plan. If the Company is not able to locate financing by August 2011 and negotiate the settlement of its outstanding debt, we will be forced to cease operations, which will result in the complete loss of your investment. Throughout this Report, Solar Energy Initiatives, Inc. Solar Energy, Inc.. and SNRY Power, Inc. may be individually and collectively hereafter referred to as: the “Company”, “Solar Energy”, “we”, or “us”.

Business Description

Solar Energy Initiatives, Inc. (OTCBB: SNRY), is a developer of solar photovoltaic installations. These services are provided through its wholly owned subsidiary, SNRY Power, who is a developer and manager of municipal and commercial scale solar projects.

The SNRY-Power business unit is a developer and manager of municipal and commercial scale solar projects. We will sell most of our projects and earn a developer fee. When it makes economic sense and we can find a financial institution that will provide adequate construction and long term financing, we will build the development and become an owner/operator of the solar array.

We work with global suppliers and manufacturers of solar products to establish pricing and delivery parameters. We have identified and will continue to seek solar technologies that have industry leading performance, are of high quality, offer competitive pricing and have strong warranties. We are selling solar power products including; solar panels and inverters which convert sun energy into electricity compatible with the utility network and solar thermal technologies that use the sun’s radiation for hot water applications. Our solar sales efforts are primarily focused on commercial applications, where our selected solar energy products and systems offer customers economic benefits utilizing federal, state and local incentives and compared with the locally supplied electricity.

We are primarily focusing our sales efforts in regions where electricity prices and government incentives are attractive and have accelerated solar power adoption. The business segments we have identified to pursue can require a significant level of expertise and capital. Currently, the Company is pursuing a business model, working with many states and counties that understand how to make the solar projects successful. The executive management has currently been focusing on this working business model to improve profit margins, identify viable and bankable projects of significant size, and to install using all efforts towards those financially viable projects. We have obtained the expertise, and continue to seek the necessary capital to further develop our plan and focus on this improved business model. Our management has found the necessary expertise focusing on these strategies, however if we are unable to continue to acquire or develop such expertise or capital, we may not be able to fully develop our planned business and ultimately may be required to cease operations. We anticipate that the end customers of our sales processes will be homeowners, owners of large commercial and industrial buildings and facilities, municipalities and owners of large tracts of undeveloped land.

F-7

2.	GOING CONCERN

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred losses from operations since our inception, and at the present time will need additional capital to maintain operations and execute our business plan. As such, our ability to continue as a going concern is contingent upon us being able to secure an adequate amount of debt or equity capital to enable us to meet our cash requirements. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets, the competitive environment in which we operate and the current credit shortage facing worldwide markets.

Since inception, our operations have primarily been funded through private equity financing, and we expect to continue to seek additional funding through private or public equity and debt financing.

However, there can be no assurance that our plans discussed above will materialize and/or that we will be successful in funding our estimated cash shortfalls through additional debt or equity capital and/or any cash generated by our operations. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

We have reduced our operations and we are not sure that our operations will be sufficient to provide adequate operating revenue to maintain the business. Adding at least $1,000,000 in funds will allow us to quickly move forward with projects in hand which, if successful, should provide cash flow allowing for advantageous inventory purchases and the securing of additional projects, potentially increasing our growth and profitability. With more capital, we would also add additional staff and start development of other projects. Currently we have approximately $4,000 in cash on hand. The current level of cash is not enough to cover the fixed and variable obligations of the Company, so increased sales performance and the addition of more capital are critical to our success. We currently have a severe liquidity problem with a negative working capital in excess of $1.1 million. Without additional investment in the Company by third parties, the Company may need to reorganize by either settling its obligations through the issuance of a substantial number of shares (causing immediate and significant dilution) or file for bankruptcy.

There is no guarantee that we will be able to raise additional funds or to do so at an advantageous price.

Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

3.	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information. They should be read in conjunction with the financial statements and related notes to the financial statements of Solar Energy Initiatives, Inc. for the years ended July 31, 2010 and 2009 appearing in the Company’s Form 10-K. The April 30, 2011 unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in the annual financial statements filed with the Annual Report on Form 10-K have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The consolidated financial statements include the accounts of Solar Energy Initiatives, Inc. and its wholly owned subsidiaries Solar Energy, Inc., SNRY Power, Inc., Solar Park Initiatives, Inc.; which we had controlling interest through January 19, 2011 and Martins Creek NC, LLC, in which we had variable interest from September 28, 2010 through February 2, 2011. All significant intercompany transactions and balances have been eliminated in consolidation.

F-8

Financial Instruments

The Company's financial instruments consist primarily of cash, accounts receivable, accounts payable, and notes receivable and payable. These financial instruments are stated at their respective carrying values, which approximate their fair values.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. Estimates that are critical to the accompanying financial statements arise from our belief that we will secure an adequate amount of cash to continue as a going concern, that our allowance for doubtful accounts is adequate to cover potential losses in our receivable portfolio, that all long-lived assets are recoverable. The markets for our products are characterized by intense competition, rapid technological development, evolving standards, short product life cycles and price competition, all of which could impact the future realization of our assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. It is at least reasonably possible that our estimates could change in the near term with respect to these matters.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

Revenue Recognition

The Company recognizes revenue in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition”. The Company generates revenue from the sale of training, photovoltaic panels, photovoltaic roofing systems, solar thermal products, balance of system products, and management system products to our dealer network or other parties, as well as, from the development, construction and sale of solar energy generation projects. The Company anticipates it will not perform any residential solar installations. SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the seller's price to the buyer is fixed and determinable; and (4) collectability is reasonably assured. Amounts billed or received from customers in advance of performance are recorded as deferred revenue.

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. Management believes there were $28,573 of uncollectible amounts as of April 30, 2011.

Warranty Reserves

The Company purchases its products for sale from third parties. The manufacturer warrants or guarantees the operating integrity, and performance of photovoltaic solar products at certain levels of conversion efficiency for extended periods, up to 25 years. The manufacturer also warrants or guarantees the functionality of inverters and balance of systems up to 10 years. Therefore, the Company does not recognize warranty expense as it is not responsible for warranty claims that manufacturers do not cover.

Shipping and Handling Fees and Costs

Shipping and handling fees, if billed to customers, are included in net sales. Shipping and handling costs associated with inbound freight are expensed as incurred. Shipping and handling costs associated with outbound freight are classified as cost of sales.

F-9

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash on deposit, and money market accounts that are readily convertible into cash.

Investments in Companies with less than controlling interest

Investments in equity method investees are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. Investments of this nature are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of the net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. When an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company’s proportionate interest in the investee is reflected in income as a deemed dilution gain proportionate interest in or loss on disposition. The Company evaluates its investments in companies accounted for the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary.

The Company began accounting for its investment in Solar Park Initiatives, Inc. under the equity method beginning January 19, 2011 at which time its interest fell from controlling interest to 22% (See Note 11). As of April 30, 2011, all investments in SPI had been reduced to $0. Prior to that time SPI was consolidated with the Company.

The Company’s 16% interest in Martins Creek NC, LLC was accounted for under the equity method due to the Company’s ability to exercise significant control as of July 31, 2010 and through September 28, 2010. As further discussed below, the Company began consolidating Martins Creek NC, LLC as a variable interest entity.

ASC 810-10 requires a variable interest entity (VIE) to be consolidated by a company, if that company is subject to a majority risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns, or both. ASC 810-10 also requires disclosures about variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest.

On September 28, 2010, certain officers and directors, along with the Company’s wholly owned subsidiary SNRY Power, Inc. guaranteed a loan to Martins Creek NC, LLC. Accordingly, the Company became subject to a majority of the risk of loss from Martins Creek NC, LLC at that time. In February 2011 the Company completed the sale of Martins Creek NC, LLC at which time the note was paid in full (See Note 14).

Business Combinations and Consolidation

On January 31, 2010, the Company adopted new accounting guidance on business combinations and non-controlling interests in consolidated financial statements. The guidance on business combinations impacts the accounting for any business combinations completed after January 31, 2010. The nature and extent of the impact will depend upon the terms and conditions of any such transaction. The guidance on non-controlling interests changes the accounting and reporting for minority interests, which have been re-characterized as non-controlling interests and classified as a component of equity. Prior period financial statements and disclosures for existing minority interests have been restated in accordance with this guidance. All other requirements of this guidance will be applied prospectively. The adoption of the guidance on non-controlling interests did not have a material impact on the Company’s financial statements.

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. This amendment removes the concept of a qualifying special-purpose entity and requires that a transferor recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. This amendment also requires additional disclosures about any transfers of financial assets and a transferor’s continuing involvement with transferred financial assets. This amendment is effective for fiscal years beginning after November 15, 2009, and interim periods within those fiscal years.

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for variable interest entities. This amendment changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the purpose and design of the other entity and the reporting entity’s ability to direct the activities of the other entity that most significantly impact its economic performance. The amendment also requires additional disclosures about a reporting entity’s involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. This amendment is effective for fiscal years beginning after November 15, 2009, and interim periods within those fiscal years.

F-10

Inventory

Inventories consist of photovoltaic solar panels, solar thermal panels and components, other component materials for specific customer orders and spare parts, and are valued at lower of cost (first-in, first-out) or market. Management may provide a reserve to reduce inventory to its net realizable value. Certain factors could impact the realizable value of inventory, so management continually evaluates the recoverability based on assumptions about customer demand and market conditions. The evaluation may take into consideration expected demand, new product development; the effect new products might have on the sale of existing products, product obsolescence, and other factors. A reserve or write - down is equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required.

Fixed Assets

Equipment and improvements will be stated at cost less accumulated depreciation and amortization. Depreciation and amortization of equipment and improvements are provided over the estimated useful lives of the assets, or the related lease terms if shorter, by the straight-line method. Useful lives range as follows:

Category	Useful Lives
Computers and networks	3 years
Machinery and equipment	5-7 years
Furniture and fixtures	5-7 years
Office equipment	3-10 years
Website development costs	3 years
Leasehold improvements	Lesser of lease term or useful life of asset

Maintenance and repairs are expensed as incurred. Expenditures for significant renewals or betterments are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in current operations.

Long-Lived Assets and Impairment

Statement of Financial Accounting Standards (SFAS) 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" requires that long-lived assets, including certain identifiable intangibles, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets in question may not be recoverable. As of April 30, 2011 and July 31, 2010, there were no long lived assets.

Stock-Based Compensation

We recognize stock-based compensation net of an estimated forfeiture rate and only recognize compensation cost for those shares expected to vest over the requisite service period of the award. The Company issues stock as compensation for services at the current market fair value.

We account for equity instruments issued for services based on the fair value of the consideration received or the fair value of the equity instruments, whichever is more reliably measurable. Stock based compensation was determined using the fair value of the services performed due to the lack of historical fair value of the equity instruments.

Determining the appropriate fair value model and calculating the fair value of share-based payment awards require the input of highly subjective assumptions, including the expected life of the share-based payment awards and stock price volatility. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If our actual forfeiture rate is materially different from our estimate, the stock-based compensation expense could be significantly different from what we have recorded in the current period.

F-11

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. We must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to our subjective assumptions and judgments which can materially affect amounts recognized in our consolidated financial statements.

Foreign Currency

Gains and losses from foreign exchange transactions will be included in the statements of operations. Currently there are none.

Basic and Diluted Net Loss per Share

Basic net loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding for the period. Fully diluted loss per share reflects the potential dilution of securities by including other potential issuances of common stock, including shares to be issued upon exercise of stock options and warrants, in the weighted average number of shares of common stock outstanding for a period and is not presented where the effect is anti-dilutive.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade accounts receivable. The Company maintains cash balances at a financial institution in Dallas Texas. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation up to $250,000. At times, balances may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Stock Options

The Company has estimated the fair value of its option awards granted after January 1, 2008 using a Black-Scholes option valuation model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

4.	RECENT ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU, however, management does not expect the adoption of this ASU to have a material impact on the financial statements.

In July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or dass of financing receivables, certain existing disdosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. This ASU is effective for interim and annual reporting periods ending on or after December 15, 2010. The Company is currently evaluating the impact of this ASU, however, management does not expect the adoption of this ASU to have a material impact on the financial statements.

On December 21, 2010, the FASB issued Accounting Standards Update ("ASU") 2010-29, which impacts any public entity that enters into business combinations that are material on an individual or aggregate basis. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose revenues and earnings of the combined entity as though the business combination(s) that occurred during the year had occurred at the beginning of the prior annual period when preparing the pro forma financial information for both the current and prior reporting periods. The guidance also requires that pro forma disclosures be accompanied by a narrative description regarding the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenues and earnings. This guidance is effective for business combinations consummated in periods beginning after December 15, 2010. The Company is currently evaluating the impact of this ASU, however, management does not expect the adoption of this ASU to have a material impact on the financial statements.

F-12

INVENTORY

Inventory consisted of the following as of April 30, 2011 and July 31, 2010:

	(Unaudited)		(Audited)
	April 30, 2011		July 31, 2010

Photovoltaic Solar panels and components	$	21,273	$	166,024
Thermal Solar panels and components		9,599		42,393
Total Inventory	$	30,872	$	208,417

6.	NOTE RECEIVABLE RELATED PARTY

On February 15, 2011, the Company entered into and closed an Asset Purchase Agreement (the “APA”) with Solar Park Initiatives, Inc. (“SPI”) pursuant to which the Company sold to SPI certain assets relating to the Solar EOS program including course and instructional materials, vendor contract information, funding information for state programs and a rental agreement in Kingstree, South Carolina (collectively, the “SPI Assets”). Further, SPI has agreed to pay the Company 10% of the adjusted gross profit derived from the operation of the education program for a period of three years ending February 14, 2014.

In consideration for the purchase and sale of the SPI Assets, SPI assumed a liability in the amount of approximately $25,000, made a cash payment of $10,000 at closing and issued the Company a Promissory Note in the principal amount of $165,244 with 7.5% interest that is payable over a period of 36 months payable in three equal installments annually. During the period SPI has paid down the note leaving a balance of $88,883. The Company has recognized a valuation allowance for the whole amount of $88,883 due to the inability of SPI to pay the note. The remaining balance is $0 as of April 30, 2011.

7.	FIXED ASSETS

Fixed assets consisted of the following as of April 30, 2011 and July 31, 2010:

	(Unaudited)			(Audited)
	April 30, 2011			July 31, 2010

Furniture and Fixtures	$	21,279		$	39,414
Equipment		18,135			-
Accumulated Depreciation		(19,940	)		(14,045	)
Fixed assets, net	$	19,474		$	25,369

During the three month period ended April 30, 2011 and April 30, 2010 depreciation expenses, totaling $3,930 and $1,862, respectively, were charged to selling, general and administrative expenses.

8.	COMMITMENTS AND CONTINGENCIES

Operating Leases

On December 15, 2011, we entered into a renegotiated lease agreement for the corporate offices. Our corporate headquarters is located at 818 A1A, Suite 202, and Ponte Vedra Beach, FL 32082. The annual least cost for the 2,800 square feet of office space is $33,600. We have entered into a19 month lease.

In March, 2010 the Company signed a 3-year lease agreement, with option to purchase, with the Williamsburg County Development Corporation for the use of a building in Kingstree, SC. Approximately 6,000 sq. ft. of the building will be used for technical and dealer training of solar applicants. The remaining 230,000 sq. ft. of building space will be used as a distribution and light manufacturing facility. The annual lease rate for the building is $5.00 per year. If the Company creates 200 or more permanent jobs as a result of its activities in South Carolina, it will be able to purchase the building for $1.00 at the end of the 3-year lease term.

Rent expense was $10,234 and $33,024 for the three month period ending April 30, 2011 and 2010, respectively.

F-13

9.	ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following at April 30, 2011 and July 31, 2010:

	(Unaudited)		(Audited)
	April 30, 2011		July 31, 2010

Accounts payable	$	997,576	$	1,158,588
Accounts payable, related parties		-		20,352
Commissions payable		-		1,882
Due to related parties		76,735		280,638
Accrued expenses		25,451		242,309
Total	$	1,099,762	$	1,703,769

10.	CONVERTIBLE NOTES

The Company transferred and assigned related party debt to new lenders and changed the terms to convertible debt on $200,000 with 8% annual interest and beneficial conversion feature totaling $73,258.

During the period an additional $100,000 of converted debt was transferred, with an amount of $38,586 representing a discount on the debt. During the period $39,141 of total discount was amortized on all of the convertible debt leaving a discount balance of $28,756 as of April 30, 2011.

During February 2011, the Company also took on an additional $54,000 of debt with 8% annual interest to be paid within 12 months.

Total Loans as of April 30, 2011:

Convertible Debt	$	79,693
Notes		54,000
Total		133,693
Discount		(28,756	)
Net Debt	$	104,937

The Company received notice of conversion during the period totaling 50,794,147 shares for conversion prices ranging from $0.0019 to $0.019 per share, for the convertible notes. Total value of the conversion was $326,717.

11.	DISTRIBUTION OF SHARES AND SPIN-OFF OF SOLAR PARK INITIATIVES, INC.

The Company announced a distribution of shares of common stock (the “Distribution”) of Solar Park Initiatives, a partially owned subsidiary of the Company (“Solar Park”). The Company held 34,996,769 shares of common stock of Solar Park, representing an estimated 66.8% of Solar Park. Following the Distribution, the Company retained 13,669,857 shares of common stock of Solar Park representing approximately 22.5% of Solar Park.

As of January 26, 2011, the Company initiated distribution of 21,326,911 shares of common stock, par value $0.001 (the “Shares”) of Solar Park and the S-1/A Registration Statement for distribution of shares from the spin-off has been declared effective. All Solar Energy Initiatives (SNRY.OB) shareholders of record as of December 1, 2010 received one share of Solar Park for every two shares they own of Solar Energy Initiatives. The Company no longer accounts for SPI as a controlling interest due to the distribution of shares and ownership control. The Company accounts for SPI as an Equity Method Investee.

12.	NET LOSS PER SHARE

In calculating basic loss per share, net loss is divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the assumed exercise or conversion of all dilutive securities, such as options and warrants. No such exercise or conversion is assumed where the effect is anti-dilutive, such as when there is a net loss from operations or when the exercise price of the potentially dilutive securities is greater than the market value of the Company’s stock. Stock options to purchase 576,014 shares of common stock and stock warrants to purchase 250,000 shares of common stock that were outstanding at April 30, 2011 were not included in the computation of diluted earnings per share for the three and nine month periods ended April 30, 2011 and April 30, 2011 because the Company had a net loss from operations and the impact of the assumed exercise of the stock options and warrants is anti-dilutive.

F-14

	For the Three Months Ended			For the Three Months Ended
	April 30, 2011			April 30, 2010
Numerator
Net loss	$	(1,729,059	)	$	(1,813,543	)

Numerator for diluted loss per share
available to common stockholders	$	(1,729,059	)	$	(1,813,543	)


Denominator
Weighted average shares		96,406,617			28,633,156
Effect of dilutive securities:
Treasury method, effect of employee stock options & warrants		-			-

Denominator for loss per share adjusted
weighted shares after assumed exercises		96,406,617			28,633,156


Loss per common share - basic:
Loss	$	(0.02	)	$	(0.06	)
Net loss per common share	$	(0.02	)	$	(0.06	)


Loss per common share - diluted:
Loss	$	(0.02	)	$	(0.06	)
Net loss per common share	$	(0.02	)	$	(0.06	)

	For the Nine Months Ended			For the Nine Months Ended
	April 30, 2011			April 30, 2010
Numerator
Net loss	$	(3,951,447	)	$	(3,731,632	)

Numerator for diluted income per share
available to common stockholders	$	(3,951,447	)	$	(3,731,632	)


Denominator
Weighted average shares		58,772,103			25,838,174
Effect of dilutive securities:
Treasury method, effect of employee stock options & warrants		-			-

Denominator for diluted income per share adjusted
weighted shares after assumed exercises		58,772,103			25,838,174


Loss per common share - basic:
Loss	$	(0.07	)	$	(0.14	)
Net loss per common share	$	(0.07	)	$	(0.14	)


Loss per common share - diluted:
Loss	$	(0.07	)	$	(0.14	)
Net loss per common share	$	(0.07	)	$	(0.14	)

F-15

13.	STOCKHOLDERS’ DEFICIT

Common Stock

On March 28, 2011, the Company amended its certificate of incorporation to increase its authorized shares of common stock from 100,000,000 to 750,000,000. In addition, the Company authorized 10,000,000 shares of preferred stock.

During August 2010 the Company retroactively increased the latest Private Placement Memorandum shares within the units purchased to be consistent with current PPM unit pricing. This retroactive pricing increased the number of shares outstanding by 1,495,744 with a fair market value of $179,490.

During August 2010 through November 2010, the Company completed a private equity offering (the “Offering”) of units (the “Units”) pursuant to securities purchase agreements (the “Purchase Agreements”) by and between the Company and various accredited investors. Pursuant to the Offering, the Company sold an aggregate of 3,482,027shares of common stock (the “Shares”) and common stock purchase warrants (the “Warrants”) to acquire 3,482,027 shares of common stock with an exercise price of $0.16 per share for aggregate net proceeds of $321,518.

The Warrants are exercisable on a cash or cashless basis for three years. The investors received, among other rights, full ratchet anti-dilution rights for lower priced issuances of securities. The Shares and the Warrants were issued in accordance with Rule 506 under Regulation D and, as a result, may only be resold in accordance with Rule 144, which provides a minimum holding period of six months.

In addition, the Company compensated four groups for assisting in the sale of Units by paying them commissions by issuing 409,103 Shares and Warrants to purchase 409,103 shares of the Company’s common stock.

The securities were offered and sold in connection with this Offering in reliance upon Section 4(2) of the Securities Act of 1933 or Regulation D promulgated there under. Each investor represented that they were acquiring the securities for investment only and not with a view toward resale or distribution. Neither we nor anyone acting on our behalf offered or sold these Units by any form of general solicitation or general advertising.

During September 2010, Solar Park Initiatives (“SOPV”) renegotiated the stock issuances with shareholders of Solar Park Initiatives including Solar Energy Initiatives. There were 7,427,972 shares cancelled during the renegotiation.

During October the Company entered into consulting arrangements with two companies for business consulting and other services, and issued 477,778 shares of common stock for a total of $100,333. The full amount is expensed in the financial statements as of October 31, 2010.

During October 2010, the Company announced that SOPV will file a registration statement during the fourth quarter of 2010 with the U.S. Securities and Exchange Commission (SEC), which will enable the Company to distribute SOPV shares upon being declared effective. Under the spin-off agreement, the Company’s shareholders as of market close on October 29, 2010, will receive one share of SOPV for every two shares of the Company’s stock that they own. Upon the Registration Statement being declared effective by the SEC, the Company will distribute the shares of SOPV common stock to the Company’s stakeholders.

During three month period ending October 31, 2010 the Company issued 500,000 shares to four directors as director fees for fiscal years 2010 and 2011 for a total value of $78,000.

In October 2010 the Company entered into consulting arrangements with two companies for business consulting and other services, and issued 800,000 shares of common stock for a total of $104,000. These agreements are for services over a period of 3 to 24 months and have expensed $8,083 of cost through October 31, 2010. Amortization for all deferred compensation agreements was $192,627 for the period ended October 31, 2010.

During the period ending October 31, 2010 the Company cancelled common shares of 90,000 for a value of $20,000.

In October 2010 warrant holders exercised cashless warrants for a net amount of 154,320 shares of common stock for $154.

On October 26, 2010, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $40,000 (the "Note"). The financing closed on October 26, 2010.

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 28, 2011. The Note is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Note contains a prepayment option whereby the Company may make a payment to Asher equal to 150% of all amounts owed under the Note during the 90 day period beginning on the date of issuance of the Note and expiring on the 90 date anniversary.

Asher has agreed to restrict its ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The total gross proceeds the Company received from this Offering on October 26, 2010 was $40,000.

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act") for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transaction did not involve a public offering, Asher is an accredited investor, Asher had access to information about the Company and their investment, Asher took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

During the three months ending January 31, 2011, the Company received notices of conversions during November, December and January totaling 3,830, 386 for various conversion prices ranging from $0.022 to $0.069 per share, for the Convertible Notes. Total value of the conversions were $129,000.

F-16

During November, 2010 the Company cancelled 434,615 shares of common stock from two investors.

During January 2011 the Company compensated two consultants for services with 763,600 shares of common stock at a value of $30,544.

During the three months ending April 30, 2011:

The Company filed an S-8 registration for 5,000,000 shares of common stock issuable under the 2011 Incentive Stock Plan.

The Company received notices of conversions during February, March and April totaling 50,794,147 shares for various conversion prices ranging from $0.002 to $0.019 per share, for the Convertible Notes. Total value of the conversions was $326,717.

On March 16, 2011, as amended on March 21, 2011, the Company and David Fann, an officer and director of the Company, entered into and closed an agreement whereby the parties agreed to convert past wages, reimbursable expenses and any accrued interest payable into shares of common stock. Further, Mr. Fann was granted and the Company issued shares of common stock in connection with his restructuring efforts in 2011. The Company issued a total of 21,012,207 shares of common stock valued at $81,691.

On March 16, 2011, as amended on March 21, 2011, the Company and Michael Dodak, an officer and director of the Company, entered into and closed an agreement whereby the parties agreed to convert past wages, reimbursable expenses and any accrued interest payable into shares of common stock. Further, Mr. Dodak was granted and the Company issued shares of common stock in connection with his restructuring efforts in 2011. The Company issued a total of 21,012,207 shares of common stock valued at 81,692.

On March 16, 2011, the Company compensated a professional services vendor for services with 8,000,000 shares of common stock at a value of $52,000, of which $46,000 is deferred compensation and $6,000 is paying an account payable balance.

All of the above offerings and sales were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of the Company or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment.

On April 8, 2011, Jack Zwick resigned as a director of the Company.

During the period the Company entered into a consulting arrangement with three companies for business consulting and other services for the terms of three to twelve months, and issued 1,750,000 shares of common stock to one consultant as consideration valued at $24,325, which was recorded as deferred compensation. Additionally the company valued the remaining 20,900,000 shares to be issued to the other consultants at $48,640. The Company recorded the these transactions as deferred compensation, of which $12,351 has been amortized for the period April 30, 2011.

The board authorized a settlement, reset and restructuring for; shareholders with reset provisions in their private placement memorandum, along with a restructuring plan for accounts payable vendors with restricted shares of stock and for consultants to work and plan the future operations of the company. The reset provision allowed for 180,000,003 shares of restricted stock to be issued, of which 10,909,090 was issued during the quarter and 169,090,913 shares are stock payable as of April 30, 2011. The value of the reset is expensed to other expenses for an amount of $1,260,000.

F-17

14.	MARTINS CREEK SOLAR NC, LLC

During June 2010 Martins Creek Solar NC, LLC, which was 1/6th owned by the Company and 5/6ths owned by employees and directors of the Company, was formed to hold the project costs of a 1MW solar project in Cherokee County, NC. The Company invested a total of $567,000 of its funds into the project

On September 28, 2010, Martins Creek Solar NC, LLC (the “Borrower”), entered into a Loan Agreement with Nantahala Bank & Trust Co. (the “Lender”) pursuant to which the Lender agreed to loan the sum of up to $1,222,000 (the “Loan”) in consideration for a promissory note from the Borrower in the amount of $1,222,000 (the “Note”). Pursuant to the terms of the Note, the Borrower promised to repay to the Lender the principal sum of the Loan together with all accrued but unpaid interest on or before January 1, 2011. The Note carries a simple interest rate of 6.99% per annum and interest only payments shall be due and payable monthly on the first day of each month beginning October 1, 2010 and continuing until January 1, 2011.

The Borrower’s obligation for payment of the Note is collateralized by a first secured interest in all of the Borrower’s rights, title and interest in and to all equipment and the project to develop the solar facility with Cherokee County Board of Education.

In connection with the Loan Agreement and the Note, SNRY Power, Inc., a wholly owned subsidiary of the Company, executed an unconditional guarantee of payment and performance for the full and prompt payment of the Loan to the Lender and performance of all obligations of the Borrower under the terms of the Loan Agreement and the Note. Further, David Fann, Michael Dodak, Kevin Cassell, James Roberson, and J. Everett Airington each, jointly and severally, executed limited guarantees of payment and performance limited to 20% of all amounts owing to the Lender under Note at the time demand for payment is made.

During February, 2011 the Company sold its interest in Martins Creek Solar NC, LLC to a third party investor group. The total amount of the sale was $237,492 and the Company recognized revenue and cost of sales on the project in the amount of $377,492 and $482,248, respectively.

15.	REALTED PARTY TRANSACTIONS

In March 2007, the Company entered into an agreement to sell the convertible debenture for $152,500, with discounts if paid early, to 0784655 B.C. LTD (“B.C.”), a company controlled by Paul Cox, a shareholder and a former officer and board member of NP Capital. Mr. Cox remains a shareholder, officer and board member of Envortus Inc. In July 2007, the sale of the convertible debenture was completed with a payment of $55,000 to NP Capital and the receipt of a promissory note in the amount of $97,500 (the “Note”), from B.C. for the balance. The principal amount of the Note was immediately discounted to $90,800. In addition, if the Note was paid within the first 270 days of issuance, additional discounts could be available. Further, in the event that we do not commence trading on the OTC BB by January 2009, Paul Cox may return shares of common stock of our Company for cancellation in lieu of payment of the Note. The price per share shall be the greater of $0.35 or the last price to raise funds from third parties.

To account for the Note, the Company determined the fair value of the Note on a discounted basis to be equal to $68,100, which represented the discounted balance to be paid by B.C. assuming early payments made within 90 days from closing as provided in the Note. Based on the fair value of the note of $68,100, a loss totaling $11,405 was recorded for the year ended July 31, 2007 as reflected in the table below:

Consideration for sale of debenture:
Cash	$	55,000
Note receivable		97,500
Total consideration		152,500

Less: discount and fees:
Immediate discount		(6,700	)
Bank fee		(5	)
Expected early payment discount		(22,700	)

Total net consideration	$	123,095

Investment in convertible debenture		134,500

Loss on sale of investment	$	(11,405	)

F-18

The Company had originally invested $134,500 in a convertible debenture with Envortus. The Company then took back a Note for $97,500 and cash paid back of $55,000. The Company reviewed the fair value of the $97,500 Note, which had an immediate discount of $6,700 and an early expected payment discount of $22,700. The Company decided to take a valuation allowance on the $22,700 and the $6,700 during July 2007, leaving a balance on the Note of $68,100. Comparing the consideration received of $55,000 and the remaining value of the Note at $68,100 or $123,095, net of a $5 fee, this resulted in a loss on sale of the original investment in convertible debenture of $11,405. The Company has allowed for the remaining balance of the Note and recorded bad debt related to note receivable, related party, in the amount of $68,100, due to concerns of collectability and non-payment of the scheduled payments. Per the terms of the Note, B.C. was required to pay principal in the amount of $10,000 in January 2008 and additional payments of $17,240 in July 2008, $31,780 in January 2009 and $31,780 in July 2009, together with interest, according to the payment schedule as defined by the Note when the early payments are not received. As of the date hereof, B.C. has not made the required principal and interest payment.

The Company is pursuing legal action against the Note’s obligor for non-payment

There is no continuing obligation on the Company under the terms of the Convertible Note.

On September 24, 2009 and January 25, 2010, the Company entered into Loan Agreement and Promissory Notes with Michael Dodak and David Fann, executive officers and directors of the Company pursuant to which the Company borrowed an aggregate of $150,000 from Messrs Fann and Dodak. The loans accrue interest at 12% and were payable on December 31, 2009 but such payment was deferred until certain capital raising events. The above referenced terms have been disclosed in the Company’s previous filings with the Securities and Exchange Commission. On March 12, 2011, Messrs Dodak and Fann assigned the remaining $100,000 debt to an unaffiliated third party. The terms of the debt have not been revised or amended as a result of such assignment.

As of April 30, 2011 and July 31, 2010, the Company has obligations to related parties for loans and related services totaling $76,735 and $280,638, respectively.

16.	INCOME TAXES

17.	SUBSEQUENT EVENTS

During May, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $35,000 (the "Note"). The financing closed in June, 2011.

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid by November, 2011. The Note is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Note contains a prepayment option whereby the Company may make a payment to Asher equal to 150% of all amounts owed under the Note during the 90 day period beginning on the date of issuance of the Note and expiring on the 90 date anniversary.

Asher has agreed to restrict its ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The total net proceeds the Company received from this Offering in June , 2011 was $32,500.

In addition, the Company compensated $2,500 to Naidich, Wurman, Birnbaum & Maday, LLP for services to complete the Note and Purchase Agreement.

On April 28, 2011, the Company entered into an Adjustment Agreement and Release pursuant to which the Company issued 16.100,000 shares of common stock to Wellfleet Partners, Inc. (“Wellfleet”) and transferred 520,000 shares of Solar Park Initiatives, Inc. to Wellfleet in consideration of a general release and the waiver of any future ratchet provision. Further, on April 28, 2011, the Company and Wellfleet entered into a Consulting Agreement whereby Wellfleet agreed to provide financial advisory, strategic transaction and business evolution services in consideration of 1,900,000 shares of common stock of the Company.

During May 2011, the Company issued an aggregate of 185,454,545 shares of common stock to satisfy a ratchet provision to investors (the “Investors”) that participated in that certain unit offering in 2010, which consisted of shares of common stock and common stock purchase warrants. Further, the Company also transferred 5,980,000 shares of common stock it held in Solar Park Initiatives, Inc. in consideration of the Investors providing a general release and waiving any future ratchet.

The Company received notice of conversion during June 2011 totaling 4,615,385 shares for conversion price of $0.0013 per share, for the Convertible Notes. Total value of the conversion was $6,000.

During May and June 2011, the company issued 195,675,126 restricted shares as part of the restructuring of debt of approximately $1,700,000 owed by the Company.

F-19

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto.

Limited Operating History

There is limited historical financial information about our Company upon which to base an evaluation of our future performance. Our company generated approximately $282,496 in revenues from operations for the quarter ended April 30, 2011. While we have experienced and anticipate future growth in revenues, we cannot guarantee that we will be successful in our business. We are subject to risks inherent in a developing enterprise, including; limited capital resources, possible delays or disruptions in establishing key vendor relationships and difficult financial markets remaining from the world-wide economic recession. In many cases these factors are out of our control. There is no assurance that future financing will be available to our Company on acceptable terms. Additional equity financing could result in dilution to existing shareholders.

Company Description and Overview

We have entered into supply agreements with manufacturers of solar products to establish pricing and delivery parameters. We have identified and will continue to seek solar technologies that have industry leading performance, are of high quality, offer competitive pricing and have strong warranties. We are selling solar power products including; solar panels and inverters which convert sun energy into electricity compatible with the utility network and solar thermal technologies that use the sun’s radiation for hot water applications. Our solar sales efforts are primarily focused on commercial applications, where our selected solar energy products and systems offer customers economic benefits utilizing federal, state and local incentives and compared with the locally supplied electricity.

We are primarily focusing our sales efforts in regions where electricity prices and government incentives are attractive and have accelerated solar power adoption. The business segments we have identified to pursue can require a significant level of expertise and capital. Currently the Company has found a very good working business model, working with many states and counties and banks that understand how to make the solar projects successful. The executive management has currently been focusing on this working business model to improve profit margins, identify viable and bankable projects of significant size, and to install using all efforts towards those financially viable projects. We have obtained the expertise, and continue to seek the necessary capital to further develop our plan and focus on this improved business model. Our management has found the necessary expertise focusing on these strategies, however if we are unable to continue to acquire or develop such expertise or capital, we may not be able to fully develop our planned business and ultimately may be required to cease operations. We anticipate that the end customers of our sales processes will be homeowners, owners of large commercial and industrial buildings and facilities, municipalities and owners of large tracts of undeveloped land.

During the last several months the Company sold one of its operating companies and closed another one of its operating companies: 1) Solar EOS (our training business) was sold, and 2) SNRY Solar (our distribution business)was closed. The closure and sale were caused by declining revenue in each of the business lines, which caused each business unit to not achieve positive gross margin. Management did not see this situation improving over the short run, and, in managements opinion, it would take a substantial investment to generate a positive gross margin in the long run. During the second quarter and continuing through the third quarter, the Company experienced and continues to experience operational difficulties that were exacerbated by the lack of capital. As a result, the Company curtailed a significant portion of its operations although it continues to pursue its business plan. If the Company is not able to locate financing by August 2011 and negotiate the settlement of its outstanding debt, we will be forced to cease operations, which will result in the complete loss of your investment. The Company did not and currently does not have access to the required capital to invest in the business Solar EOS or the SNRY Solar units and therefore they were sold and closed.

Results of Operations

The following table sets forth our statements of operations data for the three and nine months ended April 30, 2011, and April 30, 2010.

	For the Three Months Ended			For the Three Months Ended
	April 30, 2011			April 30, 2010

Revenues, net	$	520,865		$	732,199
Gross profit		28,583			131,221
Selling, general and administrative expenses		543,064			1,631,219

Total operating expenses		543,064			1,631,219
Loss from operations		(514,481	)		(1,499,998	)
Loss attributable to Solar Energy Initiatives, Inc.	$	(1,729,059	)	$	(1,813,543	)

	For the Nine Months Ended			For the Nine Months Ended
	April 30, 2011			April 30, 2010

Revenues, net	$	1,285,770		$	3,017,656
Gross profit		236,157			692,141
Selling, general and administrative expenses		2,952,320			4,126,215

Total operating expenses		2,952,320			4,126,215
Loss from operations		(2,716,163	)		(3,434,074	)
Loss attributable to Solar Energy Initiatives, Inc.	$	(3,951,447	)	$	(3,731,632	)

Comparison of Results of Operations for the Three Months Ended April 30, 2011 and 2010:

Results of Operations

For the three months ended April 30, 2011, we generated $520,865 in revenues from operations and we incurred a loss of $1,729,059 attributable to Solar Energy Initiatives, Inc, of which $1,685,164 was non-cash stock compensation. Our operating expenses included significant legal, consulting and accounting expenses, as well as business development. We expect to continue to use cash in our operating activities.. We have financed our operations since inception primarily through private sales of securities. As of April 30, 2011, we had $20,659 in cash, and negative working capital of $1,132,768.

Revenues

For the three months ended April 30, 2011, we had revenues of $520,865 compared to $732,200 for the three months ended April 30, 2010. Revenues for the three months ended April 30, 2011 reflect sales of solar energy systems and equipment. For the three months ended April 30, 2010 revenues relate primarily to sales of solar energy systems and equipment and dealer training sales.

Cost of sales and gross profit

For the three months ended April 30, 2011 our Cost of Goods Sold were $492,282 compared to $600,979 for the three months ended April 30, 2010, resulting in a gross profit from operations of $28,583, or 5.8% of revenues compared to $131,221 or 21.8% of revenues, respectively. The increase in cost of sales is a result of reduced sales of higher margin training and PV sales during the period compared to prior year and increased sales of lower margin PV sales.

Selling, general and administrative

Selling, general and administrative (“SG&A”) expenses for the three months ended April 30, 2011 were $543,064 compared with $1,631,219 for the same period ending April 30, 2010. Major changes in S, G & A expenses were;

● Salaries and wages reduced to $259,131 in 2011 compared to $507,696 in 2010 primarily related to reductions in staff.

● Travel and entertainment reduced to $10,153 in 2011 compared with $60,260

in 2010 primarily related to lower travel and procurement related activities

● Cash and stock based consulting and director’s costs increased to $223,896 in 2011 from $201,544 in 2010 resulting primarily of outside consulting firms compensated in stock.

● Subsidiary costs of SG&A have reduced to $49,884 in 2011 from $486,212 in 2010 results.

Other income (expense)

For the three months ended April 30, 2011 other expense was $1,182,976 due mainly to reset provisions for shareholders, compared with $431,310 for the same period ending April 30, 2010.

For the three months ended April 30, 2011 interest expense was $31,602, due to interest related to, loans from shareholders, and note interest, compared with $48,225 for the same period ending April 30, 2010.

Net Loss

Our net loss attributable to Solar Energy Initiatives, Inc. was $1,729,059 for the three months ended April 30, 2011 compared with $1,813,543 for the period ending April 30, 2010. The net loss primarily reflects our expenses relating to business activities that have been incurred ahead of our ability to recognize material revenues from our business plan.

Loss from non-controlling interest in Solar Park Initiatives, Inc was $0 and $165,990 for the three months ended April 30, 2011 and April 30, 2010, respectively.

Comparison of Results of Operations for the Nine months Ended April 30, 2011 and 2010:

Results of Operations

For the nine months ended April 30, 2011, we generated $1,285,770 in revenues from operations and we incurred a loss of $3,951,447 attributable to Solar Energy Initiatives, Inc , of which $2,990,620 was non-cash stock compensation. Our operating expenses included significant legal, consulting and accounting expenses, as well as business development.

Revenues

For the nine months ended April 30, 2011, we had revenues of $1,285,770 compared to $3,017,656 for the nine months ended April 30, 2010. Revenues for the nine months ended April 30, 2011 reflect dealer training and sales of solar energy systems and equipment. For the nine months ended April 30, 2010 revenues relate primarily to dealer training, sales of solar energy systems and equipment.

Cost of sales and gross profit

For the nine months ended April 30, 2011 our Cost of Goods Sold were $1,049,613 compared to $2,325,515 for the nine months ended April 30, 2010, resulting in a gross profit from operations of $236,157, or 18.3% of revenues compared to $692,141 or 22.9% of revenues, respectively. The decrease in cost of sales is a result of decreased sales of higher margin training and PV sales during the period compared to prior year and reduced sales of lower margin PV sales.

Selling, general and administrative

Selling, general and administrative (“SG&A”) expenses for the nine months ended April 30, 2011 were $2,952,320 compared with $4,126,415 for the same period ending April 30, 2010. Major changes in S, G & A expenses were;

● Salaries and wages reduced to $1,133,805 in 2011 compared to $1,253,832 in 2010 primarily related to reductions in staff.

● Travel and entertainment reduced to $33,899 in 2011 compared with $206,126

in 2010 primarily related to lower travel and procurement related activities

● Cash and stock based consulting and director’s costs increased to $1,003,097 in 2011 from $800,377 in 2010 resulting primarily of outside consulting firms compensated in stock.

● Subsidiary costs of SG&A have increased to $781,519 in 2010 from $732,677 in 2010 results.

Other income (expense)

For the three months ended April 30, 2011 other expense was $1,182,976 due mainly to reset provisions for shareholders, compared with $433,458 for the same period ending April 30, 2010.

For the nine months ended April 30, 2011 interest expense was $217,991, due to interest related to, loans from shareholders, and note interest, compared with $110,044 for the same period ending April 30, 2010.

Net Loss

Our net loss attributable to Solar Energy Initiatives, Inc. was $3,951,447 for the nine months ended April 30, 2011 compared with $3,731,632 for the period ending April 30, 2010. The net loss primarily reflects our expenses relating to business activities that have been incurred ahead of our ability to recognize material revenues from our business plan.

Loss from non-controlling interest in Solar Park Initiatives, Inc was $165,683 and $245,945 for the nine months ended April 30, 2011 and January 31 2010, respectively.

Liquidity and Capital Resources

As of April 30, 2011, we had $20,659 in cash, and negative working capital of $1,132,768, compared with $252,631 in cash and working capital deficit, of $862,042 as of April 30, 2010. During the quarter ended April 30, 2011, we funded our operations from private sales of equity securities and the revenue generated from operations on a limited basis. For the same period in 2010, we funded our operations from private sales of equity securities and revenue generated from operations on a limited basis.

Our ability to fund the Company through operating activities has been significantly reduced. Currently the Company is mainly funded through selling securities.

The cost of our photovoltaic and solar thermal products can be potentially influenced by availability of raw materials and supply and demand imbalances. We are uncertain of the extent to which these factors will affect our working capital in the near future. A significant increase in cost of materials that we cannot pass on to our customers could cause us to run out of cash more quickly than our projections indicate, requiring us to raise additional funds or curtail operations.

As we continue to maintain a significantly reduced operation of our business, we will be required to raise additional financing to supplement cash flows. Unless we can attain sufficient levels of revenues, we will need to raise additional funds during the next twelve month period. We have raised $325,000 since the July 31, 2010 period end and may require approximately $1,000,000 of additional capital funding to allow us to continue the execution of our business plan through July 31, 2011. If we are not successful in raising the required capital, or begin one or more of the projects in our business pipeline, we will need to reduce the breadth of our business even more. Management has put into place cost control actions that will be continually evaluated and adjusted as the business is trying to be a self sustaining operations.

Since inception, our operations have primarily been funded through private equity financing and convertible debt. We expect to continue to seek additional funding through private or public equity and debt financing as our business moves forward.

Significant Capital Expenditures

During the three months ended April 30, 2011, we acquired $0 of business assets, and furniture and equipment for office purposes. We use these assets in our business operations. As we continue to grow it will be necessary to purchase additional equipment.

ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

Pursuant to Item 305(e) of Regulation S-K the Company, as a smaller reporting company, is not required to provide the information required by this item.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our Company’s disclosure controls and procedures. Under the direction of our Chief Executive Officer and our Interim Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures were not effective and there is a material weakness in our internal control over financial reporting as of April 30, 2011.

A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

During the current reporting period, certain elements of the internal control system that may prevent the possibility of a misstatement being prevented or detected on a timely basis were found to be missing. These elements related principally to the segregation of duties and oversight in the financial reporting. Management will continue to monitor the identified material weakness and take the necessary steps to mitigate the possible impact on the Company’s financial statements.

Changes in Internal Control Over Financial Reporting

Except as set forth above, there were no changes to internal controls over financial reporting that occurred during the three months ended April 30, 2011 that have materially affected, or are reasonably likely to materially impact, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. The Company is currently not aware of, nor has any knowledge of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.

ITEM 1A. Risk Factors

Although not required to include risk factors as the Company is a Smaller Reporting Company, the Company is voluntarily providing risk factors. This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could decrease. This means you could lose all or a part of your investment.

If we are unable to raise capital by August 2011, we will be cease operations and your investment will be lost.

During the second quarter and continuing through the third quarter, the Company experienced and continues to experience operational difficulties that were exacerbated by the lack of capital. As a result, the Company curtailed a significant portion of its operations although it continues to pursue its business plan. If the Company is not able to locate financing by August 2011 and negotiate the settlement of its outstanding debt, we will be forced to cease operations, which will result in the complete loss of your investment.

We have a limited operating history, there is no certainty that we will ever generate substantial revenue and achieve profitability.

We generated revenue of $520,865 for the quarter ended April 30, 2011. We have incurred significant losses from development and operations. As shown in our financial statements, as of the period ended April 30, we have incurred a cumulative net loss of $14,953,781 from operations. We will continue to incur operating losses in the future, primarily due to the initiation and expansion of our operations. Negative cash flow from operations may also continue into future. Our ability to achieve profitability depends upon our ability to; continue to sell dealerships and technical training classes, significantly expand the solar component and system sell-through to our dealer network, convert opportunities to sell large municipal and commercial projects, and successfully begin development of one or more solar park(s).

We may be unable to manage our growth or implement our expansion strategy.

We may not be able to implement our proposed product and service offerings, develop an active dealer network base and markets, or implement the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant strain on our administrative, operational and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected.

Additional financing will be necessary for the implementation of our growth strategy.

We will require additional equity and/or debt financing to pursue our growth strategy. Given our limited operating history existing losses, and a difficult financial market, there can be no assurance that we will be successful in obtaining additional financing. Lack of additional funding could force us to curtail substantially our growth plans. Furthermore, the issuance by us of any additional securities pursuant to any future fundraising activities undertaken by us would dilute the ownership of existing shareholders and may reduce the price of our common stock.

Debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility. Our failure to successfully obtain additional future funding may jeopardize our ability to continue our business and operations.

The loss of our current directors and executive officers or our inability to attract and retain the necessary personnel could have a material adverse effect upon our business, financial condition or results of operations.

Our success is heavily dependent on the continued active participation of our current directors and officers. Loss of the services of our directors and officers could have a material adverse effect upon our business, financial condition or results of operations. Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical and managerial personnel. Competition for qualified employees among companies in the technology industry is intense, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of our activities, could have a materially adverse effect on us. The inability on our part to attract and retain the necessary personnel and consultants and advisors could have a material adverse effect on our business, financial condition or results of operations. Finally, we need to identify and engage independent directors to join the board and serve on the Audit Committee, including one that qualifies as an “accounting expert” to meet the public company listing qualifications of Sarbanes-Oxley, section 301. The Company is currently searching for additional directors, including an accounting expert, which is required to be listed on the National Association of Securities Dealers Automated Quotations (NASDAQ) exchange or other primary stock exchange.

If there is a shortage of components and/or key components rise significantly in price that may constrain our revenue growth. The market for photovoltaic installations has slowed recently, the result of world-wide financial and economic problems. The introduction of significant production capacity, however, has continued increasing supply and reducing the cost of solar panels. If demand increases and supply contracts, the resulting likely price increase could adversely affect sales and profitability. Additionally, we may not have sufficient financial resources to take advantage of supply opportunities as they may arise.

During 2011, the capacity to produce solar modules continued, primarily from China, which in the face of the most severe, world-wide, economic downturn in nearly a century significantly reduced the price of solar panels. As demand for solar panels will likely increase with an economic recovery, demand and pricing for solar modules on a per watt basis could increase, potentially limiting access to solar modules and reducing our selling margins for panels.

Our dependence on a limited number of third party suppliers for components could prevent us from delivering our proposed products to our customers within required timeframes, which could result in order cancellations and substantial harm to our business.

We purchase our products using materials and components procured from a limited number of third-party suppliers. If we fail to establish or maintain our relationships with these suppliers, or to secure additional supply sources from other suppliers, we may be unable to provide our products or our products may be available only at a higher cost or after a long delay, which could prevent us from delivering our products to our customers within required timeframes, and we may experience order cancellations and our business may fail. We currently have supply agreements with suppliers to allow us to buy products at market rates and procure sufficient product quantities to assemble and sell our products on acceptable commercial terms. The failure of a supplier to supply materials and components in a timely manner, or to supply materials and components that meet our quality, quantity and cost requirements could impair our ability to purchase our products or increase their costs, particularly if we are unable to obtain substitute sources of these materials and components on a timely basis or on terms acceptable to us. In order to obtain required supplies, we may need to make large inventory purchases on short notice, and prior to having purchase orders or deposits from our customers for product using the full amount of silicon required to be purchased. We may not have sufficient financial resources to make these purchases, which may exacerbate supply shortages.

Our business depends on the implementation of our current and future agreements with foreign and domestic manufacturers, securing contracts with other suppliers and orders with customers and ensuring products to sell.

To date, we have entered into various supply agreements with solar panel suppliers. We intend to pursue other agreements with component and balance of system suppliers to attempt to manage the cost of materials and supply allocations. If we are unable to maintain our supply agreements, establish competitive additional supply sources or we are unable to develop adequate sales, we may be forced to cease operations.

Our operating results will be subject to fluctuations and are inherently unpredictable; if we fail to meet the expectations of securities analysts or investors, our stock price may decline significantly.

Our quarterly revenue and operating results will be difficult to predict from quarter to quarter. It is possible that our operating results in some quarters will be below market expectations. Our quarterly operating results will be affected by a number of factors, including:

·	the average selling price of the solar products that we purchase including PV and Thermal systems;

·	the availability, pricing and timeliness of delivery of third party sources products, components and systems, particularly solar panels and balance of systems components, including steel, necessary for solar power products to function;

·	the rate and cost at which we are able to expand to meet customer demand, including costs and timing of adding personnel;

·	the amount and timing of sales of our systems, especially medium and large-scale projects, which may individually cause severe fluctuations in our revenue;

·	our ability to meet project completion schedules and the corresponding revenue impact under such contractual devises as percentage-of-completion method of recognizing revenue for projects which may apply;

·	construction cost overruns, including those associated with the introduction of new products;

·	incentives play a major role in the buying/decision making process for our potential customers, significant changes in regulation or incentives may adversely affect our business;

·	the impact of seasonal variations in demand and/or revenue recognition linked to construction cycles and weather conditions;

·	unplanned additional expenses such as manufacturing failures, defects or downtime;

·	acquisition and investment related costs;

·	unpredictable volume and timing of customer orders, some of which are not fixed by contract but vary on a purchase order basis;

·	unpredictable sales cycle time lines inherent with new solutions and products;

·	geopolitical turmoil within any of the countries in which we operate or sell products;

·	foreign currency fluctuations, particularly in the Euro or the Chinese Yuan;

·	the effect of currency hedging activities;

·	our ability to establish and expand customer relationships;

·	changes in our manufacturing costs;

·	changes in the relative sales mix of our solar cells, solar panels and imaging detectors;

·	the availability, pricing and timeliness of delivery of other products, such as inverters necessary for our solar power products to function;

·	our ability to successfully procure and sell new or enhanced solar power products in a timely manner;

·	the timing of new product or technology affiliations or agreements by our competitors and other developments in the competitive environment;

·	the willingness of solar panel suppliers to continue product sales to us;

·	increases or decreases in electric rates due to changes in fossil fuel prices or other factors; and

·	labor shortages, expertise shortages, shipping and other factors causing business delays.

We plan to base our operating expenses in part on our expectations of future revenue, and a significant portion of our expenses will be relatively fixed in the short term. If revenue for a particular quarter is lower than we expect, we likely will be unable to proportionately reduce our operating expenses for that quarter, which would harm our operating results for that quarter. This may cause us to miss discussed future expectations, current analysts’ guidance or any future guidance announced by us. If we fail to meet or exceed analyst or investor expectations or our own future guidance, even by a small amount, our stock price could decline, perhaps substantially.

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

The market for electricity generation products is heavily influenced by foreign, U.S. federal, state and local government regulations and policies concerning the electric utility industry, as well as policies promulgated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In the U.S. and in a number of other countries, these regulations and policies are being modified and may continue to be modified. Customer purchases of, or further investment in the research and development of, alternative energy sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for the solar power products of Solar Energy Initiatives, Inc.. For example, without certain major incentive programs and or the regulatory mandated exception for solar power systems, utility customers are often charged interconnection or standby fees for putting distributed power generation on the electric utility network. These fees could increase the cost to our customers of using our solar power products and make them less desirable, thereby harming our business, prospects, results of operations and financial condition.

We anticipate that our solar power products and their installation will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. It is difficult to track the requirements of individual states and design equipment to comply with the varying standards. Any new government regulations or utility policies pertaining to our solar power products may result in significant additional expenses to us and our resellers and their customers and, as a result, could cause a significant reduction in demand for our solar power products.

The reduction or elimination of government economic incentives could prevent us from achieving sales and market share.

We believe that the near-term growth of the market for on-grid applications, where solar power is used to supplement a customer’s electricity purchased from the utility network or sold to a utility under tariff, depends in large part on the availability and size of government and economic incentives. Because a significant portion of our sales are expected to involve the on-grid market, the reduction or elimination of government and economic incentives may adversely affect the growth of this market or result in increased price competition, both of which could cause our revenue to decline.

Today, the cost of solar power exceeds retail electric rates in many locations. As a result, federal, state and local government bodies in many countries, most notably Germany, Japan, Spain, Italy, Portugal, South Korea and the United States, have provided incentives in the form of feed-in tariffs, rebates, tax credits and other incentives to end users, distributors, system integrators and manufacturers of solar power products to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. These government economic incentives could be reduced or eliminated altogether. For example, Germany has been a strong supporter of solar power products and systems and political changes in Germany could result in significant reductions or eliminations of incentives, including the reduction of feed-in tariffs more rapidly than required by current law. Some solar program incentives expire, decline over time, are limited in total funding or require renewal of authority. Net metering and other operational policies in California, Japan or other markets could limit the amount of solar power installed there. Reductions in, or eliminations or expirations of, governmental incentives could result in decreased demand for and lower revenue from our products. Changes in the level or structure of a renewable portfolio standard could also result in decreased demand for and lower revenue from our products.

Problems with product quality or product performance of the products we distribute could result in a decrease in customers and revenue, unexpected expenses and loss of market share.

The solar products we purchase are complex and must meet stringent quality requirements. Products this complex may contain undetected errors or defects, especially when first introduced. For example, solar panels may contain defects that are not detected until after they are shipped or are installed because we cannot test for all possible scenarios. These defects could cause us to, or may cause us to request that suppliers incur significant re-engineering costs, divert the attention of our personnel from product selling efforts and significantly affect our customer relations and business reputation. If we deliver solar panels with errors or defects, or if there is a perception that such solar panels contain errors or defects, our credibility and the market acceptance and sales of its solar power systems could be harmed.

The possibility of future product failures could cause us to incur substantial expense to repair or replace defective products. Furthermore, widespread product failures may damage our market reputation and reduce our market share and cause sales to decline. We may need to indemnify dealers in the network and customers in some circumstances against liability from defects in our solar products. A successful indemnification claim against us could require us to make significant damage payments, which would negatively affect our financial results.

Since the solar products we plan to purchase and sell cannot be tested for the duration of their standard multi-year warranty period, we may be subject to unexpected warranty expense; if we are subject to installation, warranty and product liability claims, such claims could adversely affect our business and results of operations.

The current standard product warranty for the solar products we intend to sell includes a warranty period (up to ten-years) for defects in material and workmanship and a warranty period (up to twenty five-years) for declines in power performance as well as a typically one-year warranty on the functionality of solar cells (for electricity producing solar products). Due to the long warranty period and even though we intend to pass through the warranty from the manufacturer, we may bear the risk of extensive warranty claims long after we have shipped product and recognized revenue. Any warranty claims that the manufacturer does not cover would cause us to increase the amount of warranty reserves and have a corresponding negative impact on our results. Although the manufacturers represent that they conduct accelerated testing of their solar cells, our solar panels have not and cannot be tested in an environment simulating the full warranty period. As a result of the foregoing, we may be subject to unexpected warranty expense, which in turn would harm our financial results.

Like other retailers, distributors and manufacturers of products that are used by consumers, we face an inherent risk of exposure to product liability claims in the event that our solar products cause or their use result in injury. Our business may be subject to warranty and product liability claims in the event that its solar power systems fail to perform as expected or if a failure of its solar power systems results, or is alleged to result, in bodily injury, property damage or other damages. Since our planned solar energy products are electricity and heat producing devices, it is possible that our products could result in injury, whether by product malfunctions, defects, improper installation or other causes. Moreover, we may not have adequate resources in the event of a successful claim against us. We have evaluated the potential risks we face and believe that we can obtain appropriate levels of insurance for product liability claims. We will rely on our general liability insurance to cover product liability claims and have not obtained separate product liability insurance. However, a successful warranty or product liability claim against us that is not covered by insurance or is in excess of our available insurance limits could require us to make significant payments of damages. In addition, quality issues can have various other ramifications, including delays in the recognition of revenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our goodwill and reputation, which could also adversely affect our business and operating results. Our business’ exposure to warranty and product liability claims is expected to increase significantly in connection with its planned expansion into the new home market.

Warranty and product liability claims may result from defects or quality issues in certain third party technology and components that we or our suppliers incorporate into their/our solar power systems, particularly solar cells and panels, over which we have no control. While our agreements with our suppliers would generally include warranties, such provisions may not fully compensate us for any loss associated with third-party claims caused by defects or quality issues in such products. In the event we seek recourse through warranties, we will also be dependent on the creditworthiness and continued existence of the suppliers to our business.

We anticipate that our current standard warranty will differ by geography and end-customer application and will include such instruments as one-, two- or five-year comprehensive parts and workmanship warranties, after which the customer may typically extend the period covered by its warranty for an additional fee. Due to the warranty period, our business bears the risk of extensive warranty claims long after it has completed a project and recognized revenues. Future product failures could cause our business to incur substantial expenses to repair or replace defective products. While our business generally passes through manufacturer warranties it receives from its suppliers to its customers, it is responsible for repairing or replacing any defective parts during its warranty period, often including those covered by manufacturers warranties. If the manufacturer disputes or otherwise fails to honor its warranty obligations, our business may be required to incur substantial costs before it is compensated, if at all, by the manufacturer. Furthermore, the ‘business’ warranties may exceed the period of any warranties from our suppliers covering components included in its systems, such as inverters.

The products we intend to distribute may not gain market acceptance, which would prevent us from achieving sales and market share.

The development of a successful market for the products we intend to distribute may be adversely affected by a number of factors, some of which are beyond our control, including:

·	our failure to offer products that compete favorably against other solar power products or providers on the basis of cost, quality and performance;

·	our failure to offer products that compete favorably against conventional energy sources and alternative distributed-generation technologies, such as wind, biomass and solar thermal, on the basis of cost, quality and performance;

·	our failure to develop and maintain successful relationships with vendors, distributors, systems integrators and other resellers, as well as strategic partners.

If the products we intend to distribute fail to gain market acceptance, we will be unable to achieve sales and market share.

Technological changes in the solar power industry could render the products we intend to distribute uncompetitive or obsolete, which could prevent us from achieving market share and sales.

Our failure to seek new technologies and to be at the forefront of new product offerings could cause us to become uncompetitive promoting less competitive or obsolete systems, which could prevent us from achieving market share and sales. The solar power industry is rapidly evolving and highly competitive. We may need to invest significant financial resources to keep pace with technological advances in the solar power industry and to compete in the future and we may be unable to secure such financing. We believe that a variety of competing solar power technologies may be under development by many companies that could result in lower manufacturing costs or higher product performance than those products selected by us. These development efforts may render obsolete the products we have selected to offer, and other technologies may prove more advantageous for the commercialization of solar power products.

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.

The market for solar power products is emerging and rapidly evolving, and its future success is uncertain. If solar power technology proves unsuitable for widespread commercial deployment or if demand for solar power products fails to develop sufficiently, we would be unable to achieve sales and market share. In addition, demand for solar power products in the markets and geographic regions we target may not develop or may develop more slowly than we anticipate. Many factors will influence the widespread adoption of solar power technology and demand for solar power products, including:

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

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

·	success of alternative distributed generation technologies such as hydrogen fuel cells, wind turbines, bio-diesel generators and large-scale solar thermal technologies;

·	fluctuations in economic and market conditions that impact the viability of conventional and competitive alternative energy sources;

·	increases or decreases in the prices of oil, coal and natural gas;

·	capital expenditures by customers, which tend to decrease when the domestic or foreign economies slow;

·	continued deregulation of the electric power industry and broader energy industry; and

·	availability and or effectiveness of government subsidies and incentives.

We face intense competition from other companies producing solar power, system integrators and other energy generation products. If we fail to compete effectively, we may be unable to increase our market share and sales.

The mainstream power generation market and related product sectors are well established and we are competing with power generation from more traditional process that can generate power at lower costs than most renewable or environmentally driven processes. Further, within the renewable power generation and technologies markets we face competition from other methods of producing renewable or environmentally positive power. Then, the solar power market itself is intensely competitive and rapidly evolving. Our competitors have established market positions more prominent than ours, and if we fail to attract and retain customers and establish a successful distribution network for our solar products, we may be unable to achieve sales and market share. There are a number of major multi-national corporations that produce solar power products, including; Suntech, Sunpower, FirstSolar, BP Solar, Kyocera, Sharp, GE, Mitsubishi, Solar World AG and Sanyo. Also established integrators are growing and consolidating, including groSolar, Sunwize, Sunenergy and Real Goods Solar and we expect that future competition will include new entrants to the solar power market. Further, many of our competitors are developing and are currently producing products based on new solar power technologies that may have costs similar to, or lower than, our projected costs.

Most of our competitors are substantially larger than we are, have longer operating histories and have substantially greater financial, technical, manufacturing and other resources than we do. Our competitors' greater sizes in some cases provides them with competitive advantages with respect to manufacturing costs due to their ability to allocate fixed costs across a greater volume of production and purchase raw materials at lower prices. They also have far greater name recognition, an established distribution network and an installed base of customers. In addition, many of our competitors have well-established relationships with current and potential resellers, which have extensive knowledge of our target markets. As a result, our competitors will be able to devote greater resources to the research, development, promotion and sale of their products and may be able to respond more quickly to evolving industry standards and changing customer requirements than we can.

We may not address successfully the problems encountered in connection with any potential future acquisitions.

We expect to consider future opportunities to acquire or make investments in other technologies, products and businesses that could enhance our capabilities, complement our products, or expand the breadth of our markets or customer base. We have limited experience in acquiring other businesses and technologies. Potential and completed acquisitions and strategic investments involve numerous risks, including:

·	problems assimilating the purchased technologies, products or business operations;

·	problems maintaining uniform standards, procedures, controls and policies;

·	problems arising from non-performance of acquired entities or assets;

·	problems arising from overvaluation or with securing the required financing to close and/or make the acquisition operational;

·	unanticipated costs associated with an acquisition;

·	diversion of management's attention from our core business;

·	adverse effects on existing business relationships with suppliers and customers;

·	risks associated with entering new markets in which we have no or limited prior experience;

·	potential loss of key employees of acquired businesses; and

·	increased legal and accounting costs as a result of the newly adopted rules and regulations related to the Sarbanes-Oxley Act of 2002 and other such regulation such as increased internal control and reporting requirements.

We are subject to 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.

We are in the process of evaluating our control structure to help ensure that we will be able to comply with Section 404 of the Sarbanes-Oxley Act. The financial cost of compliance with these laws, rules and regulations is expected to be substantial. We cannot assure you that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities.

Because the markets in which we compete are highly competitive and many of our competitors have greater resources than us, we may not be able to compete successfully and we may lose or be unable to gain market share.

Our solar business competes with a large number of competitors in the solar power market, including integrators such as groSolar, Sunwize, Sunenergy and Real Goods Solar, and manufacturers that may also directly supply projects at costs we cannot compete with, including Suntech, BP Solar, FirstSolar, SolarWorld AG and others. In addition, alternative technologies such as thin film and concentrators, which may compete with our technology in certain applications, continue to make market penetration. We expect to face increased competition in the future. Further, many of our competitors are developing and are currently producing products based on new solar power technologies that may ultimately have costs similar to, or lower than, our projected costs.

Our solar power products and services compete against other power generation sources including conventional fossil fuels supplied by utilities, other alternative energy sources such as wind, biomass, concentrated solar power “CSP” and emerging distributed generation technologies such as micro-turbines, sterling engines and fuel cells. In the large-scale on-grid solar power systems market, we will face direct competition from a number of companies that manufacture, distribute, or install solar power systems. Our primary competitors in the United States include Arizona Public Service Company, BP Solar International, Inc., a subsidiary of BP p.l.c., Conergy Inc., Dome-Tech Group, Eastwood Energy, EI Solutions, Inc., Florida Power and Light, GE Energy, a subsidiary of General Electric Corporation, Global Solar Energy, Inc., a subsidiary of Solon, groSolar, Power-Fab, Real Goods Solar, Schott Solar, Inc., Solar Integrated Technologies, Inc., SPG Solar, Inc., Sun Edison LLC, Suntech, SunTechnics Installation & Services, Inc., Sunwize, Sunenergy, Thompson Technology Industries, Inc. and WorldWater & Power Corporation. Our primary competitors in Europe include BP Solar, Conergy (through its subsidiaries AET Alternative Energies Technique GmbH, SunTechnics Solartechnik GmbH and voltwerk AG), PV-Systemtechnik Gbr, SAG Solarstrom AG, Solon AG and Taufer Solar GmbH. Additionally, our business will occasionally compete with distributed generation equipment suppliers such as Caterpillar, Inc. and Cummins Inc. Other existing and potential competitors in the solar power market include universities and research institutions. We also expect that future competition will include new entrants to the solar power market offering new technological solutions. As we enter new markets and pursue additional applications for our products and services, we expect to face increased competition, which may result in price reductions, reduced margins or loss of market share.

Competition is intense, and many of our competitors have significantly greater access to financial, technical, manufacturing, marketing, management and other resources than we do. Many also have greater name recognition, a more established distribution network and a larger installed base of customers. In addition, many of our competitors have well-established relationships with our potential suppliers, resellers and their customers and have extensive knowledge of our target markets. As a result, these competitors may be able to devote greater resources to the research, development, promotion and sale of their products and respond more quickly to evolving industry standards and changing customer requirements than we will be able to. Consolidation or strategic alliances among such competitors may strengthen these advantages and may provide them greater access to customers or new technologies. To the extent that government funding for research and development grants, customer tax rebates and other programs that promote the use of solar and other renewable forms of energy are limited, we will compete for such funds, both directly and indirectly, with other renewable energy providers and their customers.

If we cannot compete successfully in the solar power industry, our operating results and financial condition will be adversely affected. Furthermore, we expect competition in the targeted markets to increase, which could result in lower prices or reduced demand for our product and service offerings and may have a material adverse effect on our business and results of operations.

The demand for products requiring significant initial capital expenditures such as our solar power products and services are affected by general economic conditions.

The United States and countries worldwide have recently experienced a period of declining economies and unprecedented turmoil in financial markets. A sustained economic recovery is uncertain. In particular, terrorist acts and similar events, continued unrest in the Middle East or war in general could contribute to a slowdown of the market demand for products that require significant initial capital expenditures, including demand for solar power systems and new residential and commercial buildings. In addition, increases in interest rates may increase financing costs to customers, which in turn may decrease demand for our solar power products. If an economic recovery is slowed as a result of the recent economic, political and social events, or if there are further terrorist attacks in the United States or elsewhere, we may experience decreases in the demand for our solar power products, which may harm our operating results.

We will rely primarily upon copyright and trade secret laws and contractual restrictions to protect our proprietary rights, and, if these rights are not sufficiently protected, our ability to compete and generate revenue could suffer.

We will seek to protect our proprietary supplier and operational processes, documentation and other written materials primarily under trade secret and copyright laws. We also typically require employees and consultants with access to our proprietary information to execute confidentiality agreements. The steps taken by us to protect our proprietary information may not be adequate to prevent misappropriation of our technology. In addition, our proprietary rights may not be adequately protected because:

·	people may not be deterred from misappropriating our operational assets despite the existence of laws or contracts prohibiting it;

·	policing unauthorized use of our intellectual property may be difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use; and

·	the laws of other countries in which we access and or market our solar cells, such as some countries in the Asia/Pacific region, may offer little or no protection for our proprietary technologies.

Unauthorized copying or other misappropriation of our proprietary assets could enable third parties to benefit from our property without paying us for doing so. Any inability to adequately protect our proprietary rights could harm our ability to compete, to generate revenue and to grow our business.

We rely on suppliers to comply with intellectual property, copy write, hazardous materials and processes and trade secrecy laws and regulations and, if such laws and regulations are not sufficiently followed, our business could suffer substantially.

We endeavor to comply with all law and regulation regarding intellectual property law manufacturing process law and regulation, however, in many cases it is our supplier that must comply with such regulations and laws. While we make efforts to ensure that products sourced from third parties comply with required regulation and law and that the operation of our suppliers do as well, our business could suffer if a supplier was, or suppliers were, found to be non compliant with regulation and law in our, our customers’ or our suppliers’ jurisdictions.

Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages and fines for us.

We are required to comply with all foreign, U.S. federal, state and local laws and regulations regarding pollution control and protection of the environment. In addition, under some statutes and regulations, a government agency, or other parties, may seek recovery and response costs from operators of property where releases of hazardous substances have occurred or are ongoing, even if the operator was not responsible for such release or otherwise at fault. In the course of future business we may use, generate and discharge toxic, volatile and otherwise hazardous chemicals and wastes in our operations or related research and development and manufacturing activities. Any failure by us to control the use of or to restrict adequately the discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions in our business operations. In addition, if more stringent laws and regulations are adopted in the future, the costs of compliance with these new laws and regulations could be substantial. If we fail to comply with present or future environmental laws and regulations we may be required to pay substantial fines, suspend production or cease operations.

There are restrictions on the transferability of the securities.

Until registered for resale, investors must bear the economic risk of an investment in the Shares for an indefinite period of time. Rule 144 promulgated under the Securities Act (“Rule 144”), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, a six month holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act and that the Company is current in its filings. There is no guarantee that we will continue to maintain our public filings.

If we have violated certain securities laws, we may not now be able to privately offer our equity securities for sale.

Any offering of our equity securities in or from the United States must be registered with the SEC or be exempt from registration. If our prior offers and sales were not exempt from registration, it is likely that they would be deemed integrated with future offerings unless we do not offer equity securities for at least nine months. In the event of such integration, we would only be permitted to offer and sell equity securities after we file one or more new registration statements with the SEC and the registration statements have become effective. The registration process is both expensive and can be expected to take at least several months and would substantially hinder our efforts to obtain funds.

If the Company uses its stock in acquisitions of other entities there may be substantial dilution at the time of a transaction.

If the price of our common stock used for an acquisition is less than the amount paid by our shareholders, substantial dilution may be experienced. Additional dilution may be experienced by the sale of additional shares of common stock or other securities, or if the Company’s shares are issued to purchase other entities assets.

Our common stock is subject to the “Penny Stock” rules of the SEC.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person's account for transactions in penny stocks; and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person; and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

● sets forth the basis on which the broker or dealer made the suitability determination; and

● that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the Over-The-Counter Bulletin Board, , and must be current in their reports with the Securities and Exchange Commission, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our Company.

Our common stock may be adversely affected by limited trading volume and the market price may fluctuate significantly, which may negatively affect our stockholders’ ability to sell their shares.

While the trading time and average stock volumes have increased over time, there can be no assurance that an active trading market will be sustained. An absence of an active trading market can be expected to adversely affect our stockholders’ ability to sell their shares. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to enter the market from time to time in the belief that our share price will decline. We cannot predict whether the market for our shares will be stable or appreciate over time.

Because each of our executive officers may voluntarily terminate his employment with us at any time on at least 30 days prior written notice to us, we cannot be sure if any of them will maintain their position with us for the foreseeable future.

In the event any of our executive officers terminate their employment with us, we may not be able to find suitable replacements on similar terms, if at all.

Although we plan on maintaining commercial insurance to reduce some operating hazard risks, such insurance may not be available to us at economically feasible rates, if at all.

In the absence of suitable insurance, we may be exposed to claims and litigation which we will not be financially able to defend or we may be subject to judgments which may be for amounts greater than our ability to pay.

Anti-takeover provisions could make a third-party acquisition of us difficult which may adversely affect the market price and the voting and other rights of the holders of our common stock.

Certain provisions of the Delaware General Corporation Law may delay, discourage or prevent a change in control. The provisions may discourage bids for our common stock at a premium over the market price. Furthermore, the authorized but unissued shares of our common stock are available for future issuance by us without our stockholders' approval. These additional shares may be utilized for a variety of corporate purposes including but not limited to future public or direct offerings to raise additional capital, corporate acquisitions and employee incentive plans. The issuance of such shares may also be used to deter a potential takeover of us that may otherwise be beneficial to our stockholders. A takeover may be beneficial to stockholders because, among other reasons, a potential suitor may offer stockholders a premium for their shares above the then market price.

The existence of authorized but unissued and unreserved shares may enable the Board of Directors to issue shares to persons friendly to current management which would render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, and merger or otherwise and thereby protect the continuity of our management

ITEM 2. Unregistered Sale of Equity Securities and Use of Proceeds

Common Stock

During three month period ending October 31, 2010 the Company issued 500,000 shares to four directors as director fees for fiscal years 2010 and 2011 for a total value of $78,000.

During the period ending October 31, 2010 the Company cancelled common shares of 90,000 for a value of $20,000.

In October 2010 warrant holders exercised cashless warrants for a net amount of 154,320 shares of common stock for $154.

During November, 2010 the Company cancelled 434,615 shares of common stock from two investors.

During January 2011 the Company compensated two consultants for services with 763,600 shares of common stock at a value of $30,544.

During the three months ending April 30, 2011:

The Company filed an S-8 registration for 5,000,000 shares of common stock issuable under the 2011 Incentive Stock Plan.

On April 8, 2011, Jack Zwick resigned as a director of the Company.

During the period the Company entered into a consulting arrangement with three companies for business consulting and other services for the terms of three to twelve months, and issued 22,650,000 shares of common stock as consideration valued at $72,965. The Company recorded the stock issuance as deferred compensation, of which $12,351 has been amortized for the period April 30, 2011.

Subsequent Events

Asher has agreed to restrict its ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The total net proceeds the Company received from this Offering in June , 2011 was $30,000.

In addition, the Company compensated $2,500 to Naidich, Wurman, Birnbaum & Maday, LLP for services to complete the Note and Purchase Agreement.

The Company received notice of conversion during June 2011 totaling 4,615,385 shares for conversion price of $0.0013 per share, for the Convertible Notes. Total value of the conversion was $6,000.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. [Removed and Reserved]

ITEM 5. Other Information

None.

ITEM 6. Exhibits

Exhibit Number		Description
3.1		Certificate of Incorporation.(1)
3.2		By-Laws. (1)
3.3		Certificate of Amendment dated August 2, 2006(1)
3.4		Certificate of Amendment dated February 2, 2007(1)
3.5		Certificate of Amendment to the Certificate of Incorporation (6)
3.6		Certificate of Amendment to the Certificate of Incorporation (8)
4.1		0784655 B.C. LTD Promissory Note with the Company.(2)
4.2		Amended Convertible Debenture Purchase and Sale Agreement between 0784655 B.C. LTD, Envortus and the Company. (2)
4.3		Agreement for distribution of solar panels between an Asian Solar Photovoltaic Manufacturer and the Company*(9)
4.4		Form of Warrant issued to the April and May 2009 Investors (10)
4.5		Form of Subscription Agreement entered into by the April and May 2009 Investors (10)
4.6		Form of Securities Purchase Agreement (11)
4.7		Form of Common Stock Purchase Warrant (11)
10.1		Employment Agreement by and between Brad Holt and the Company(4)
10.2		Employment Agreement by and between David Fann and the Company(4)
10.3		Employment Agreement by and between David Surette and the Company(4)
10.4		Employment Agreement by and between Michael Dodak and the Company(4)
10.5		Website Purchase Agreement by and among NP Capital Corp, SEI Acquisition, Inc., Solar Energy, Inc., David H. Smith Revocable Trust dated June 16, 1993 and David Smith (7)
10.6		Agreement entered between David Fann and Solar Energy Initiatives Inc dated March 16, 2011 (12)
10.7		Agreement entered between Michael Dodak and Solar Energy Initiatives Inc dated March 16, 2011 (12)
10.8		Amendment No. 1 dated March 21, 2011 to the Agreement between David Fann and Solar Energy Initiatives, Inc. (12)
10.9		Amendment No. 1 dated March 21, 2011 to the Agreement between Michael Dodak and Solar Energy Initiatives, Inc. (12)
31.1		Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.2		Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

* Portions of this exhibit have been redacted pursuant to a request for confidential treatment submitted to the Securities Exchange Commission.

(1) Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities Exchange Commission on December 17, 2007.

(2) Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities Exchange Commission on February 1, 2008.

(3) Incorporated by reference to the Form S-1 Registration Statement filed with the Securities Exchange Commission on March 6, 2008.

(4) Incorporated by reference to the Form S-1 Registration Statement filed with the Securities Exchange Commission on April 1, 2008.

(5) Incorporated by reference to the Form S-1 Registration Statement filed with the Securities Exchange Commission on April 25, 2008.

(6) Incorporated by reference to the Form 8K Current Report filed with the Securities Exchange Commission on August 1, 2008.

(7) Incorporated by reference to the Form 8K Current Report filed with the Securities Exchange Commission on August 27, 2008.

(8) Incorporated by reference to the Form 8K Current Report filed with the Securities Exchange Commission on September 25, 2008.

(9) Incorporated by reference to the Form S-1 Registration Statement filed with the Securities Exchange Commission on May 21, 2008.

(10) Incorporated by reference to the Form 8-K Current Report filed with the Securities Exchange Commission on May 22, 2009.

(11) Incorporated by reference to the Form 8-K Current Report filed with the Securities Exchange Commission on March 8, 2010.

(12) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities Exchange Commission on March 23, 2011.

SIGNATURES

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.

	SOLAR ENERGY INITIATIVES, INC..

Dated: June 20, 2011	By:	/s/David Fann
		David Fann
		Chief Executive Officer
		(Principal Executive Officer)
Dated: June 20, 2011	By:	/s/ Michael Dodak
		Michael Dodak
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)
Dated: June 20, 2011	By:	/s/Pierre Besuchet
		Pierre Besuchet
		Director

Dated: June 20, 2011	By:	/s/J. Everett Airington
		J. Everett Airington
		Director

Solar Energy Initiatives, Inc. - FORM 10-Q - June 20, 2011

Attached files

Solar Energy Initiatives, Inc. Reports