RESULTSHighlights-- 4.2 MW in shipments during first six months of 2011 for total revenues of $1.7 million; annualized operating cost reduced by almost $2 million from 2010 levels.-- Sustainable expands distribution channels in Ontario with leading systems integrators electrical distributors and module and tracker manufactures -positioned for growth in 200MW addressable market.-- 23MW supply contract with tenKsolar marks US market entry - 269 (1.4 MW) units delivered to date.-- SUNERGY gaining recognition from market leaders in Europe for lower cost and easily serviceable parallel solar solution.-- Restructured manufacturing and supply chain model enables lower manufactured cost and more flexible market response time for SUNERGY production.-- Technology breakthrough in Q2 sets stage for lowest cost higher efficiency product platform by September 2011.-- Regulatory delays in Ontario's market start-up slow solar product sales across the board during Q2, resulting in lower than anticipated product sales revenues for the Quarter at $724,549.-- Ontario Power Authority approval of 839 capacity allocation exempt (less than 500kW) rooftop projects totaling 142 MW signals improved market conditions for balance of year. Combined with 149MW microFIT backlog brings total backlog to 291 MW.-- New equity of $2.3 million plus $1.5 million operating line with a Canadian Chartered Bank secures cash reserves needed to reach positive cash flow."Q2 combined very positive outcomes with frustrating bureaucratic delays in the Ontario market," said Michael Carten CEO of the Company."It is now clear that the parallel system design is potentially one of the more disruptive factors affecting the solar industry globally and we are benefiting from investments by VC funded micro inverter and power optimizer companies to evangelize the parallel value proposition.""Within Europe this has translated into new interest from several leading thin film manufacturers and distributors based on our cost and serviceability advantages. In the next two Quarters, we expect to see increased demand for the inverter especially from customers in Italy and France.""We are executing on our plan. A restructured supply chain and manufacturing model is operational and set to go; and we are exceeding manufactured cost targets. We have built a strong presence in the Ontario microFIT (less than 10kW) market from a standing start with leading system integrators, electrical distributors as well as module and tracker suppliers. During Q2, we also secured our first major contract in the US for an estimated 4,600 units, and we are delivering on this contract.""However inexplicable regulatory delays caught the industry by surprise dramatically slowing demand for solar products in Q2. This was partially resolved by the announced approval of 142 MW of capacity allocation exempt projects signaling the intention of the Government to make this industry work.""We are optimistic that the regulatory delays will be resolved in the next few weeks. Nevertheless, we have slowed production of Ontario product and deferred Guelph until we have better visibility on demand in the Province".