The information in this prospectus is not complete and may be changed. These securities may not be sold except pursuant to a transaction exempt from the registration requirements of the Securities Act of 1933, until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

 

EXECUTIVE COMPENSATION

          The following Summary Compensation Table sets forth certain information about compensation paid, earned or accrued for services by our Chief Executive Officers (“Named Executive Officers”). No other executive officer earned in excess of $100,000 during the fiscal year ended December 31, 2006.

Summary Compensation Table

														All Other
Name and Principal Position		Year				Salary				Bonus				Compensation				Total
Barry Cinnamon, Chief Executive Officer, President, Treasurer, Secretary and Director			2006			$	132,392			$	—			$	11,000	(1)		$	143,392	(2)
Bruce Velestuk, Chief Executive Officer, President, Treasurer and Secretary and Director			2006				—				—				—				—	(3)

Outstanding Equity Awards at Fiscal Year-End

          There were no stock awards held by the Named Executive Officers as of December 31, 2006.

Option Grants

          We have not granted any stock options to our Named Executive Officers or our directors.

Employment Agreements

          We currently do not have employment agreements with any of our executive officers.

Stock Incentive Plan

          On August 11, 2006, our board of directors and stockholders adopted the 2006 Stock Incentive Plan (the “Stock Plan”). On December 20, 2006, we amended the Stock Plan to increase the number of shares of common stock reserved for issuance under the Plan as restricted stock or options to Akeena Solar’s employees, directors and consultants, from 450,000 shares to 1,000,000 shares. The purpose of the Stock Plan is to provide an incentive to retain and attract as directors, officers, consultants, advisors and employees of our company, persons of training, experience and ability, to encourage the sense of proprietorship and to stimulate the active interest of such persons into our development and financial success. Under the Stock Plan, we are authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options and restricted stock. The Stock Plan is administered by our board of directors. As of April 4, 2007, there have been no grants of stock options, and an aggregate of 430,051 shares of restricted stock have been issued under the Stock Plan, of which 43,909 shares have been forfeited and restrictions have lapsed on 3,785 shares.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The following table sets forth information as of April 4, 2007 regarding the number of shares of our common stock beneficially owned by: (i) each person or entity known to us to be the beneficial owner of more than 5% of our common stock, (ii) each Named Executive Officer, (iii) each director, and (iv) all of our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders named below has sole voting and disposition power with respect to such shares of common stock. Except as otherwise indicated, the address of each of the stockholders listed below is: c/o Akeena Solar, Inc., 605 University Avenue, Los Gatos, California 95032.

          Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a stockholder and the percentage ownership of that stockholder, shares of our common stock issuable upon the exercise of stock options or warrants or the conversion of other securities held by that stockholder that are currently exercisable or convertible, or are exercisable or convertible within 60 days, are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for the purposes of computing percentage ownership of each other stockholder.

		Number of Shares				Percentage
Name and Address of Beneficial Owner		Beneficially Owned				Beneficially Owned(1)
Barry Cinnamon			8,000,000				43.4	%
Edward Roffman			20,000	(2)			*
Bruce Velestuk(3)			0				0
All directors and executive officers as a group (3 persons)			8,058,306	(4)			43.7	%

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS
AND CERTAIN CONTROL PERSONS

          On March 30, 2001, Akeena, Inc. (the former name of Akeena Corp.) purchased certain infrastructure and harvester technology from Akeena Wireless, Inc. (formerly known as Andalay, Inc.), a Delaware corporation (“AWI”), of which Barry Cinnamon, our President and Chief Executive Officer, is a director, principal stockholder and chief executive officer, in exchange for warrants to purchase an aggregate of 1,000,000 shares of Akeena, Inc.’s common stock at an exercise price of $0.01 per share. In July 2006, AWI sold warrants to purchase 750,000 shares of Akeena, Inc.’s common stock to The Cinnamon 2006 Irrevocable Children’s Trust, warrants to purchase 90,000 shares of Akeena, Inc.’s common stock to Mr. Cinnamon, and warrants to purchase 80,000 shares of Akeena, Inc.’s common stock to each of two consultants, for an aggregate price of $30,000. On August 11, 2006, we assumed the obligations of Akeena, Inc. under the warrants in the Merger, so that each warrant was converted into a warrant to purchase one share of our common stock. On November 30, 2006, Mr. Cinnamon gifted his warrants to purchase 90,000 shares to various adult family members, all of which warrants were exercised by December 31, 2006.

DESCRIPTION OF SECURITIES

          We are authorized to issue 50,000,000 shares of common stock, and 1,000,000 shares of preferred stock. As of April 4, 2007, there were 18,424,727 shares of our common stock issued and outstanding and no shares of our preferred stock issued and outstanding.

Common Stock

          The holders of our common stock are entitled to one vote per share. Our Certificate of Incorporation does not provide for cumulative voting. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors out of legally available funds; however, the current policy of our board of directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action of our board of directors and issued in the future.

Preferred Stock

          Our board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by our stockholders, to issue from time to time shares of preferred stock in one or more series. Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

Warrants

          On March 8, 2007, in connection with a private placement, we issued warrants to purchase up to an aggregate of (i) 206,230 shares of our common stock, at an exercise price of $2.75 per share, to investors, (ii) 206,230 shares of our common stock, at an exercise price of $3.00 per share, to investors, (iii) 68,250 shares of our common stock, at an exercise price of $2.75 per share, to our placement agent and finder, and (iv) 11,726 shares of our common stock, at an exercise price of $1.97 per share, to a finder. Each warrant will expire three years from the date of issuance.

          The warrants contain provisions that protect the holders against dilution by adjustment of the purchase price in certain events such as stock dividends, stock splits and other similar events.

          Prior to exercise, the warrants do not confer upon holders any voting or any other rights as a stockholder.

Lock-up Agreements

          All shares of common stock held by our Chairman, President and Chief Executive Officer (together with the shares held by his affiliates) are subject to lock-up provisions that provide restrictions on the future sale of our common stock by the holders and their transferees. These lock-up provisions provide, in general, that their shares may not, directly or indirectly, be offered, sold, offered for sale, contracted for sale, hedged or otherwise transferred or disposed of for a period of 12 months following the closing of the private placement transaction.

Anti-Takeover Effect of Delaware Law, Certain Charter and By-Law Provisions

          Our Certificate of Incorporation and By-laws contain provisions that could have the effect of discouraging potential acquisition proposals or tender offers or delaying or preventing a change of control of our company. These provisions have the following effects:

	•		they provide that special meetings of stockholders may be called only by a resolution adopted by a majority of our board of directors;
	•		they provide that only business brought before an annual meeting by our board of directors or by a stockholder who complies with the procedures set forth in the By-laws may be transacted at an annual meeting of stockholders;
	•		they provide for advance notice of specified stockholder actions, such as the nomination of directors and stockholder proposals;

	•		they do not include a provision for cumulative voting in the election of directors. Under cumulative voting, a minority stockholder holding a sufficient number of shares may be able to ensure the election of one or more directors. The absence of cumulative voting may have the effect of limiting the ability of minority stockholders to effect changes in our board of directors and, as a result, may have the effect of deterring a hostile takeover or delaying or preventing changes in control or management of our company; and
	•		they allow us to issue, without stockholder approval, up to 1,000,000 shares of preferred stock that could adversely affect the rights and powers of the holders of our common stock. In some circumstances, this issuance could have the effect of decreasing the market price of our common stock, as well.

          We are subject to the provisions of Section 203 of the Delaware General Corporation Law, which we refer to as the “DGCL,” an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. For purposes of Section 203, a “business combination” includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder, and an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior did own, 15% or more of the voting stock of a corporation.

Indemnification of Directors and Officers

          Section 145 of the DGCL, provides, in general, that a corporation incorporated under the laws of the State of Delaware, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses.

          Our Certificate of Incorporation and By-laws provide that we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the DGCL, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders’ or directors’ resolution or by contract. Any repeal or modification of these provisions approved by our stockholders will be prospective only and will not adversely affect any limitation on the liability of any of our directors or officers existing as of the time of such repeal or modification.

          We are also permitted to apply for insurance on behalf of any director, officer, employee or other agent for liability arising out of his actions, whether or not the DGCL would permit indemnification.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

          Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and persons controlling us, we have been advised that it is the SEC’s opinion that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

SELLING STOCKHOLDERS

          The following table sets forth the shares of our common stock beneficially owned, as of the date of this prospectus, by each selling stockholder prior to the offering contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares that each selling stockholder would own beneficially if such offered shares are sold. Beneficial ownership is determined in accordance with SEC rules. Unless otherwise indicated, the persons and entities included in the table have sole voting and investment power with respect to all of the shares beneficially owned, except to the extent authority is shared by spouses under applicable law.

										Number of				Percentage of
		Number of								Shares				Outstanding
		Shares				Number of				Beneficially				Common stock
		Beneficially				Shares to be				Owned				Beneficially
		Owned Prior				Sold Pursuant				After				Owned After
		to this				to this				this				this Offering
Name of Selling Stockholder		Offering				Prospectus				Offering (1)				(1)
GRQ Consultants, Inc. 401K Plan (2)			395,939	(3)			395,939	(3)			0				0
Whalehaven Capital Fund Limited (4)			395,939	(3)			395,939	(3)			0				0
Bristol Investment Fund, Ltd. (5)			304,569	(6)			304,569	(6)			0				0
BB Trust (7)			304,569	(6)			304,569	(6)			0				0
Liechtensteinische Landesbank AG (8)			213,196	(9)			213,196	(9)			0				0
Crescent International Ltd. (10)			182,740	(11)			182,740	(11)			0				0
Robert S. Colman Trust UDT 3/13/85 (12)			152,283	(13)			152,283	(13)			0				0
Cranshire Capital, L.P. (14)			121,826	(15)			121,826	(15)			0				0
Mara Gateway Associates LP (16)			120,000	(17)			120,000	(17)			0				0
Charles R. & Janet B. Jackson			89,878	(18)			89,878	(18)			0				0
Iroquois Master Fund Ltd. (19)			76,141	(20)			76,141	(20)			0				0
John P. Morbeck			30,000	(21)			30,000	(21)			0				0
Bill Corbett			34,613	(22)			34,613	(22)			0				0
Michael R. Jacks			18,637	(23)			18,637	(23)			0				0
Empire Financial Group, Inc. (24)			15,976	(25)			15,976	(25)			0				0
Jerome M. Ceppos			15,228	(26)			15,228	(26)			0				0
Senal Jayamaha			15,228	(26)			15,228	(26)			0				0
Paul & Mary Jo Fahey			15,228	(26)			15,228	(26)			0				0
Joseph W. & Patricia G. Abrams Family Trust DTD 3/15/95 (27)			15,000	(28)			15,000	(28)			0				0
Will K. Weinstein Revocable Trust UTA DTD 2/27/90 (29)			15,000	(28)			15,000	(28)			0				0
The Westley Group (30)			15,000	(31)			15,000	(31)			0				0
Elizabeth F. Sjursen			12,000	(32)			12,000	(32)			0				0
Westminster Securities Corp. (33)			11,726	(34)			11,726	(34)			0				0

          None of the selling stockholders has held any position or office or has had any other material relationship with us or any of our predecessors or affiliates during the past three years, except Empire Financial Group, Inc. and Westminster Securities Corporation, registered broker-dealers, which served as placement agent and finder, respectively, in connection with our private placement.

PLAN OF DISTRIBUTION

          We are registering 2,554,740 shares of our common stock for resale by the selling stockholders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of their shares of our common stock, but will receive up to $1,396,610 aggregate gross proceeds from the exercise of warrants to purchase 492,436 of the shares being offered. We will bear all fees and expenses incident to our obligation to register the shares of our common stock.

          The selling stockholders may sell all or a portion of the shares of our common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of our common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of our common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions:

	•		on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
	•		in the over-the-counter market;
	•		in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
	•		through the writing of options, whether such options are listed on an options exchange or otherwise;
	•		ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	•		block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	•		purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	•		an exchange distribution in accordance with the rules of the applicable exchange;

	•		privately negotiated transactions;
	•		short sales;
	•		sales pursuant to Rule 144;
	•		broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
	•		a combination of any such methods of sale; and
	•		any other method permitted pursuant to applicable law.

          If the selling stockholders effect such transactions by selling shares of our common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of our common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of our common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of our common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of our common stock short and deliver shares of our common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of our common stock to broker-dealers that in turn may sell such shares.

          The selling stockholders may pledge or grant a security interest in some or all of the warrants or shares of our common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of our common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of our common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

          The selling stockholders and any broker-dealer participating in the distribution of the shares of our common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of our common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of our common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

          Under the securities laws of some states, the shares of our common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of our common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

          There can be no assurance that any selling stockholder will sell any or all of the shares of our common stock registered pursuant to the registration statement, of which this prospectus forms a part.

          The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of our common stock by the selling stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of our common stock to engage in market-making activities with respect to the shares of our common stock. All of the foregoing may affect the marketability of the shares of our common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of our common stock.

          We will pay all expenses of the registration of the shares of our common stock pursuant to the registration rights agreement that we entered into with the selling stockholders. However, the selling stockholders will pay all underwriting discounts and selling commissions, if any.

          We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

LEGAL MATTERS

          Haynes and Boone, LLP, New York, New York, passed on the validity of the securities being offered in this prospectus.

EXPERTS

          Our Balance Sheet as of December 31, 2006, and the related Statements of Operations, Changes in Stockholders’ Equity and Cash Flows for the year ended December 31, 2006, have been included in this prospectus in reliance upon the report of Burr, Pilger & Mayer LLP, independent registered public accounting firm, included herein, given on the authority of said firm as experts in accounting and auditing.

          Our Statements of Operations, Changes in Stockholders’ Equity and Cash Flows for the year ended December 31, 2005, has been included in this prospectus in reliance upon the report of Marcum & Kliegman LLP, independent registered public accounting firm, included herein, given on the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

          We file annual, quarterly and current reports and other information with the SEC. Our filings are available to the public at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Further information on the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

          We have filed a registration statement on Form SB-2 under the Securities Act for the Common Stock offered by this prospectus. This prospectus does not contain all of the information set forth in the registration statement, parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information, reference is made to the registration statement and its exhibits. Whenever we make references in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

AKEENA SOLAR, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Burr, Pilger & Mayer LLP)			F-2
Report of Independent Registered Public Accounting Firm (Marcum & Kliegman LLP)			F-3
Consolidated Balance Sheet at December 31, 2006			F-4
Consolidated Statements of Operations for the Years Ended December 31, 2006 and 2005			F-5
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2006 and 2005			F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006 and 2005			F-7
Notes to Consolidated Financial Statements			F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
of Akeena Solar, Inc.

          We have audited the accompanying consolidated balance sheet of Akeena Solar, Inc. and its subsidiary (the “Company”) as of December 31, 2006, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

          We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor have we been engaged to perform, an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Akeena Solar, Inc. and its subsidiary as of December 31, 2006, and the results of their operations, and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

          As discussed in Notes 2 and 12 to the consolidated financial statements, on January 1, 2006, the Company changed its method of accounting for stock-based compensation as a result of adopting Statement of Financial Accounting Standards No. 123(revised 2004), Share-Based Payment applying the modified prospective method.

/s/ Burr, Pilger & Mayer LLP
San Francisco, CA
March 27, 2007

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
of Akeena Solar, Inc.

          We have audited the accompanying statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2005 of Akeena Solar, Inc. (the “Company”). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

          We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present fairly, in all material respects, the results of operations, changes in stockholders’ equity and cash flows of Akeena Solar, Inc. for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

/s/ Marcum & Kliegman LLP
Marcum & Kliegman LLP
New York, NY
August 1, 2006

AKEENA SOLAR, INC.

Assets
Current assets
Cash and cash equivalents		$	992,376
Accounts receivable, net			3,434,569
Inventory			1,791,816
Prepaid expenses and other current assets, net			838,192
Total current assets			7,056,953
Property and equipment, net			194,867
Due from related party			21,825
Customer list, net			230,988
Other assets			24,751
Total Assets		$	7,529,384
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	2,053,567
Customer rebate payable			1,196,363
Accrued liabilities			622,184
Accrued warranty			508,655
Common stock issuable			175,568
Deferred revenue			981,454
Credit facility			500,000
Current portion of capital lease obligations			12,205
Current portion of long-term debt			17,307
Total current liabilities		$	6,067,303
Capital lease obligations, less current portion			42,678
Long-term debt, less current portion			28,673
Total liabilities		$	6,138,654
Commitments, contingencies and subsequent events (Notes 16 and 18)
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued and outstanding at December 31, 2006		$	—
Common stock, $0.001 par value; 50,000,000 shares authorized; 15,877,751 shares issued and outstanding at December 31, 2006			15,878
Additional paid-in capital			2,955,926
Accumulated deficit			(1,581,074	)
Total stockholders’ equity			1,390,730
Total liabilities and stockholders’ equity		$	7,529,384

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

AKEENA SOLAR, INC.

		2006				2005
Net Sales		$	13,390,139			$	7,191,391
Cost of sales			10,361,481				5,595,475
Gross profit			3,028,658				1,595,916
Operating expenses
Sales and marketing			1,550,411				547,810
General and administrative			3,219,833				1,034,448
Total operating expenses			4,770,244				1,582,258
(Loss) income from operations			(1,741,586	)			13,658
Other income (expense)
Interest income (expense), net			(67,655	)			(11,806	)
Total other income (expense)			(67,655	)			(11,806	)
(Loss) income before provision for income taxes			(1,809,241	)			1,852
Provision for income taxes			—				—
Net (loss) income		$	(1,809,241	)		$	1,852
(Loss) earnings per common and common equivalent share:
Basic		$	(0.16	)		$	0.00
Diluted		$	(0.16	)		$	0.00
Weighted average shares used in computing (loss) earnings per common and common equivalent share:
Basic			11,193,143				9,000,000
Diluted			11,193,143				9,000,000
Pro forma (unaudited) financial information:
Net (loss) income – (actual)		$	(1,809,241	)		$	1,852
Charge in lieu of income taxes – (unaudited)			—				630
Pro forma net (loss) income – (unaudited)		$	(1,809,241	)		$	1,222
Pro forma (loss) earnings per common and common equivalent share:
Basic		$	(0.16	)		$	0.00
Diluted		$	(0.16	)		$	0.00

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

AKEENA SOLAR, INC.

		Common Stock								Additional
		Number of								Paid-In				Accumulated				Stockholders’
		Shares				Amount				Capital				Deficit				Equity
Balance at January 1, 2005			8,000,000			$	8,000			$	(7,000	)		$	57,951			$	58,951
Distribution to Stockholder			—				—				—				(60,322	)			(60,322	)
Net income			—				—				—				1,852				1,852
Balance at December 31, 2005			8,000,000				8,000				(7,000	)			(519	)			481
Net equity of Fairview Energy Corporation, Inc. at date of reverse merger			3,656,466				3,656				3,015				—				6,671
Proceeds from issuance of common stock at $1.00 private placement, $0.001 par value			3,217,500				3,218				3,214,282				—				3,217,500
Total placement agent fees			—				—				(131,539	)			—				(131,539	)
Warrants issued to placement agent			—				—				70,039				—				70,039
Stock-based compensation expense			3,785				4				37,815				—				37,819
Distribution to stockholder			—				—				—				(11,000	)			(11,000	)
Reclassification of S corporation accumulated deficit to additional paid-in capital			—				—				(239,686	)			239,686				—
Exercise of warrants for common shares at an exercise price of $0.01, $0.001 par value			1,000,000				1,000				9,000				—				10,000
Net loss			—				—				—				(1,809,241	)			(1,809,241	)
Balance at December 31, 2006			15,877,751			$	15,878			$	2,955,926			$	(1,581,074	)		$	1,390,730

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

AKEENA SOLAR, INC.

		2006				2005
Cash flows from operating activities
Net (loss) income		$	(1,809,241	)		$	1,852
Adjustments to reconcile net (loss) income to net cash used in operations
Depreciation			36,953				27,854
Amortization of customer list and customer contracts			101,391				—
Bad debt expense			41,743				17,363
Non cash stock-based compensation expense			37,819				—
Changes in assets and liabilities:
Accounts receivable			(1,798,123	)			(1,102,829	)
Inventory			(1,251,948	)			(22,694	)
Prepaid expenses and other current assets			(456,930	)			(295,374	)
Other assets			(20,824	)			—
Accounts payable			914,584				276,204
Customer rebate payable			878,178				314,481
Accrued liabilities and accrued warranty			560,243				205,469
Deferred revenue			507,422				347,787
Net cash used in operating activities			(2,258,733	)			(229,887	)
Cash flows from investing activities
Capital expenditures			(88,585	)			(17,500	)
Acquisition of customer list			(101,618	)			—
Increase in amount due from related party			(800	)			(3,084	)
Net cash used in investing activities			(191,003	)			(20,584	)
Cash flows from financing activities
Borrowing on long-term debt			21,084				—
Repayment on long-term debt			(17,661	)			(18,250	)
Borrowings on line of credit, net of repayments			—				500,000
Distributions to stockholder			(11,000	)			(60,322	)
Payment of capital lease obligations			(3,228	)			—
Issuance of common stock under private placement			3,217,500				—
Proceeds from exercise of warrants			10,000				—
Payment of placement agent fees			(61,500	)			—
Cash acquired in reverse merger transaction			16,871				—
Net cash provided by financing activities			3,172,066				421,428
Net increase in cash and cash equivalents			722,330				170,957
Cash and cash equivalents
Beginning of year			270,046				99,089
End of year		$	992,376			$	270,046
Supplemental cash flows disclosures:
Cash paid during the year for
Interest		$	$59,129			$	13,529
Non cash investing and financing activities
Issuance of common stock warrants to placement agent		$	70,039			$	—
Capital lease obligations incurred		$	58,111			$	—
Non-cash acquisition of customer list, common stock issued in January 2007		$	175,568			$	—

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

AKEENA SOLAR, INC.

1. Description of Business

Akeena Solar, Inc. (the “Company”) was incorporated in February 2001 as a Subchapter S corporation in the State of California. During June 2006, the Company became a C corporation in the State of Delaware. On August 11, 2006, the Company entered into a reverse merger transaction (the “Merger”) with Fairview Energy Corporation, Inc. (“Fairview”). Pursuant to the merger agreement, the stockholders of Akeena Solar received one share of Fairview common stock for each issued and outstanding share of Akeena Solar common stock, which totaled 8,000,000 shares. Akeena Solar’s common shares were also adjusted from $0.01 par value to $0.001 par value at the time of the Merger. Subsequent to the closing of the Merger, the closing of a private placement of 3,217,500 shares of the Company’s common stock (the “Private Placement”) at an issue price of $1.00 per share for a total of $3,217,500, net of placement agent fees of $131,539, and the cancellation of 3,877,477 shares of Fairview common stock, the former stockholders of Akeena Solar held a majority of Fairview’s outstanding common stock. The $131,539 of placement agent fees were comprised of $61,500 in cash fees paid and warrants to purchase 61,500 shares of the Company’s common stock valued at $70,039 (see Note 13). Since the stockholders of Akeena Solar own a majority of the outstanding shares of Fairview common stock immediately following the Merger, and the management and board of Akeena Solar became the management and board of Fairview immediately following the Merger, the Merger is being accounted for as a reverse merger transaction and Akeena Solar is deemed to be the acquirer. The assets, liabilities and the historical operations prior to the Merger are those of Akeena Solar. Subsequent to the Merger, the consolidated financial statements include the assets and liabilities of Akeena Solar and Fairview, and the historical operations of Akeena Solar and the operations of Fairview from the closing date of the Merger.

The Company is engaged in the installation of solar panel systems to residential and commercial markets.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalents which consist principally of demand deposits with high credit quality financial institutions. At certain times, such amounts exceed FDIC insurance limits. The Company has not experienced any losses on these investments.

Accounts Receivable

The Company regularly evaluates the collectibility of its accounts receivable. An allowance for doubtful accounts is maintained for estimated credit losses, and such losses have been minimal and within management’s expectations. When estimating credit losses, the Company considers a number of factors including the aging of a customer’s account, creditworthiness of specific customers, historical trends and other information. Accounts receivable consist of trade receivables and amounts due from state agencies for rebates on state-approved solar systems installed. These rebate amounts are passed on to the customer, either at the time the customer is billed, or when the money is received from the states by the Company. Included within customer rebate payable at December 31, 2006 is approximately $1.2 million of rebates payable to customers. Usually, the various states remit the rebate amounts to the Company within 90-120 days.

Inventory

Inventory is stated at the lower of cost (on an average basis) or market value.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the respective assets.

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

Estimated useful lives are as follows:

Category		Useful Lives
Furniture and Fixtures		7-10 years
Office Equipment		3-10 years
Vehicles		5 years
Leasehold Improvements		5 years

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

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of a long-lived asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of its long-lived assets or whether the remaining balance of long-lived assets should be evaluated for possible impairment. The Company does not believe that there were any indicators of impairment that would require an adjustment to such assets or their estimated periods of recovery at December 31, 2006.

Manufacturer and Installation Warranties

The Company warrants its products for various periods against defects in material or installation workmanship. The manufacturer warranty on the solar panels and the inverters have a warranty period range of 5-25 years. The Company assists the customer in the event that the manufacturer warranty needs to be used to replace a defective panel or inverter. The Company provides for a 5-year warranty on the installation of a system and all equipment and incidental supplies other than solar panels and inverters that are covered under the manufacturer warranty. The Company records a provision for the installation warranty, within cost of sales, based on historical experience and future expectations of the probable cost to be incurred in honoring its warranty commitment. The provision for the installation warranty is included within “Accrued warranty” in the accompanying consolidated balance sheet.

The provision for installation warranty consisted of the following at December 31, 2006:

Balance at beginning of year		$	304,188
Provision charged to warranty expense			234,467
Less: warranty claims			(30,000	)
Balance at end of year		$	508,655

Fair Value of Financial Instruments

The carrying values reported for cash equivalents, accounts receivable, accounts payable and accrued liabilities approximated their respective fair values at each balance sheet date due to the short-term maturity of these financial instruments.

Revenue Recognition and Deferred Revenue

Revenue from installation of a system is recognized when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the sales price is fixed or determinable, and (4) collection of the related receivable is reasonably assured. The Company recognizes revenue upon completion of a system installation.

Defective solar panels or inverters are covered under the manufacturer warranty. In the event that a panel or inverter needs to be replaced, the Company will replace the defective item within the manufacturer’s warranty period (between 5-25 years). See the “Manufacturer and installation warranties” discussion above.

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

Deferred revenue consists of installations initiated but not completed within the reporting period.

Stock-based Compensation

The Company applies the fair value method under Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment” (“SFAS 123R”) in accounting for its Stock Incentive Plan. Under SFAS 123R, compensation cost is measured at the grant date based on the fair value of the equity instruments awarded and is recognized over the period during which an employee is required to provide service in exchange for the award, or the requisite service period, which is usually the vesting period. The fair value of the equity award granted is estimated on the date of the grant.

Advertising

The Company expenses advertising costs as incurred. Advertising expense, included in “Sales and marketing expenses,” for the years ended December 31, 2006 and 2005 was approximately $301,000 and $162,000, respectively.

Shipping and Handling Costs

Shipping and handling costs associated with inbound freight are included in cost of inventory and expensed as cost of sales when the related inventory is sold. Amounts billed to customers for shipping and handling are recorded as revenue and were not significant for the years ended December 31, 2006 and 2005.

Income Taxes

As the Company was a Subchapter S corporation until June 2006, any taxable income or loss of the S corporation through June 2006 was included within the sole stockholder’s income for federal and state income tax purposes.

Deferred income taxes arise from timing differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. A deferred tax asset valuation allowance is recorded when it is more likely than not that deferred tax assets will not be realized. Utilization of net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code. The annual limitation may result in the expiration of net operating loss carryforwards before utilization.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the periods plus the effect of dilutive securities outstanding during the periods. For the year ended December 31, 2006, basic earnings per share is the same as diluted earnings per share as a result of the Company’s common stock equivalents being anti-dilutive due to the Company’s net loss. The Company’s issued and outstanding common shares as of December 31, 2005 does not include the underlying shares exercisable relating to the issuance of 1,000,000 warrants outstanding at December 31, 2005, exercisable at $0.01 per share. In accordance with SFAS No. 128, “Earnings Per Share,” the Company has given effect to the issuance of these warrants in computing basic net income per share for the years ended December 31, 2006 and 2005. The 1,000,000 warrants were exercised and 1,000,000 common shares were issued during 2006, and are therefore included in the Company’s issued and outstanding common shares as of December 31, 2006.

At December 31, 2006, warrants to purchase 61,500 shares of the Company’s common stock and 354,622 non-vested restricted shares, net of forfeitures, (see Note 12) are dilutive securities that may dilute future earnings per share.

The weighted-average number of common shares outstanding of 11,193,143 and 9,000,000 as of December 31, 2006 and 2005, respectively, used to calculate the basic earnings per share include 1,000,000 contingently issuable warrants for shares of the Company’s common stock. The 1,000,000 warrants were exercised for 1,000,000 common shares during 2006.

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

Segment Reporting

The Company has determined it operates in one operating segment. Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker assesses the Company’s performance, and allocates its resources as a single operating segment.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Akeena Solar and Fairview, pursuant to the Merger as described in Note 1. All inter-company accounts have been eliminated in consolidation.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (the “FASB”) issued SFAS 123R, which revises SFAS No. 123 “Accounting For Stock-Based Compensation” (“SFAS 123”) and supersedes Accounting Principles Board Opinion No. 25 (“APB No. 25”). SFAS 123R requires companies to measure the cost of employee services received in exchange for an award of equity instruments (including grants of employee stock options) based on the grant date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the award, or the requisite service period (usually the vesting period). The pro forma disclosures previously permitted under SFAS 123 are no longer an alternative to financial statement recognition and SFAS 123R was adopted by the Company on January 1, 2006. The Company is allowed to apply the provisions of SFAS 123R prospectively solely to new awards and to awards modified, repurchased or cancelled after the required effective date of the statement. The effects of the provisions of 123R on the Company’s consolidated results of operations and financial position as of December 31, 2006 are disclosed in Note 12.

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments” (“SFAS 155”). SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole, eliminating the need to bifurcate the derivative from its host, if the holder elects to account for the whole instrument on a fair value basis. This statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of SFAS 155 to have a material impact on its consolidated financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets” (“SFAS 156”). SFAS 156 provides relief for entities that use derivatives to economically hedge fluctuations in the fair value of their servicing rights and changes how gains and losses are computed in certain transfers or securitizations. SFAS 156 is effective as of the beginning of the first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of SFAS 156 to have a material impact on its consolidated financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes.” FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on de-recognition, measurement,

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

classification, interest and penalties, accounting in interim periods, disclosure and transition. The interpretation applies to all tax positions related to income taxes subject to FASB Statement No. 109. FIN 48 is effective for fiscal years beginning after December 15, 2006. Differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption should be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. The Company does not believe the adoption of FIN 48 will have a material impact on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. This statement does not require any new fair value measurements in accounting pronouncements where fair value is the relevant measurement attribute. However, for some entities, the application of this statement will change current practice for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of SFAS 157 on its definition and measurement of fair value and disclosure requirements.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R) (“SFAS 158”). SFAS 158 requires entities to recognize and disclose an asset or liability for the overfunded or underfunded status of benefit plans in financial statements as of December 31, 2006. The Company has determined that the guidance in SFAS 158 does not have a material impact on its consolidated financial position or results of operations.

In September 2006, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 108 (“SAB 108”) which provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The Company has determined that the guidance in SAB 108 does not have a material impact on its consolidated financial position or results of operations.

3. Accounts Receivable

Accounts receivable at December 31, 2006 consists of the following:

Trade accounts		$	1,671,237
California rebate receivable			1,040,263
New Jersey rebate receivable			137,918
Other state rebates receivable			568,794
Other accounts receivable			59,939
Less: Allowance for doubtful accounts			(43,582	)
		$	3,434,569

4. Inventory

Inventory consists of the following at December 31, 2006:

Finished goods		$	1,791,816

5. Property and Equipment, Net

Property and equipment, net consist of the following at December 31, 2006:

Vehicles		$	272,785
Furniture and fixtures			13,284
Office equipment			4,089
Leasehold improvements			4,013
			294,171
Less: Accumulated depreciation and amortization			(99,304	)
		$	194,867

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

Depreciation expense for the years ended December 31, 2006 and 2005 was approximately $37,000 and $28,000, respectively. Accumulated depreciation related to approximately $64,000 of assets under capital leases was approximately $4,000 at December 31, 2006.

6. Assets Acquired

On September 29, 2006, the Company executed an Account Purchase Agreement (the “Purchase Agreement”), whereby the Company purchased customer contracts, fixed assets and a customer listing from an individual (the “Seller”) who, subsequent to the execution of the Purchase Agreement, became an employee of the Company. This employee has been hired to expand the Company’s operations into Fresno, California. The customer contracts of approximately $109,000 are included within “Prepaid expenses and other current assets, net” in the accompanying consolidated balance sheet at December 31, 2006, net of accumulated amortization of approximately $55,000. The customer contracts are being amortized over the period during which they are completed, which will range from 3-12 months from the purchase date of these contracts. The fixed assets purchased of approximately $37,000 are included within “Property and equipment, net” and the customer listing valued at approximately $277,000 is included within “Customer list, net” in the accompanying consolidated balance sheet at December 31, 2006, net of accumulated amortization of approximately $46,000 at December 31, 2006. The customer list is being amortized over an eighteen month period. Upon execution of the Purchase Agreement, the Seller received approximately $196,000 and during January 2007, received approximately $176,000 in the Company’s common stock, based upon the weighted average closing price of the shares. The $176,000 to be received by the Seller is included within “Common stock issuable” in the accompanying consolidated balance sheet at December 31, 2006, and was settled in 54,621 shares of the Company’s common stock during January 2007 (see Note 18). The total assets purchased under the Purchase Agreement were approximately $423,000 which consisted of the customer contracts valued at approximately $109,000, fixed assets of approximately $37,000, and a customer list valued at approximately $277,000. Customer deposit liabilities of approximately $51,000 were assumed by the Company at the time of the purchase of the customer contracts, fixed assets and a customer list.

As long as the Seller remains employed by the Company, the Seller will receive cash of $77,000 during April 2007. If certain revenue milestone amounts are attained, the Seller may receive 29,481 and 27,143 shares of the Company’s common stock during 2007 and 2008, respectively. Additionally, per the terms of the Purchase Agreement, the Seller is entitled to receive 14,286 shares of the Company’s common stock on December 31, 2008, as long as the Seller remains employed by the Company at that time. The additional shares of the Company’s common stock that may be issued to the Seller based upon the Seller’s attainment of certain revenue milestone amounts will be treated as compensation expense and are limited to a maximum of 200,000 shares per the terms of the Purchase Agreement.

Concurrent with the Purchase Agreement, the Company executed an employment agreement with the Seller which provides for, among other things, an annual salary of $120,000. This agreement expires December 31, 2008. There are automatic one-year renewals unless notice is given within 30 days of the end of the term by either party.

7. Accrued Liabilities

Accrued liabilities consist of the following at December 31, 2006:

Customer deposits		$	308,802
Accrued salaries and benefits			72,048
Accrued accounting and legal fees			35,200
Other accrued liabilities			206,134
		$	622,184

8. Credit Facility

On December 19, 2006, the Company entered into a master revolving note with Comerica Bank (the “2006 Credit Facility”), with a maturity date of January 1, 2008, to replace the Company’s previous credit facility with Citibank West FSB dated August 31, 2005. As of December 31, 2006, $500,000 was outstanding under the 2006 Credit Facility and no additional borrowing capacity was available at December 31, 2006. A $250,000 letter of credit is

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

outstanding under the 2006 Credit Facility at December 31, 2006, and pursuant to the terms of the 2006 Credit Facility, letters of credit issued may not exceed $250,000.

Interest on the outstanding balance under the 2006 Credit Facility is calculated on the prime rate (“Prime”) plus 0.5%. Interest was calculated based on Prime plus 0.5% (8.75%) at December 31, 2006.

All of the existing property and assets of the Company are pledged as collateral for the 2006 Credit Facility. In addition, the Company’s obligations are collateralized by a guaranty from the Chief Executive Officer of the Company, which includes as collateral all personal property and assets up to a maximum liability of $500,000.

There are no restrictive financial covenants, such as minimum financial performance objectives, under the 2006 Credit Facility.

On January 29, 2007, the Company entered into a Loan and Security Agreement with Comerica Bank for a $2.0 million line of credit to replace the Company’s 2006 Credit Facility (see Note 18).

9. Capital Lease Obligations

The Company’s capital lease obligations consist of a forklift and two vehicles under capital leases. The Company’s scheduled principal maturities relating to capital lease obligations at December 31, 2006 are as follows:

2007		$	12,205
2008			13,373
2009			13,738
2010			11,300
2011			4,267
			54,883
Less: current portion			(12,205	)
		$	42,678

10. Long-Term Debt

The Company’s long-term debt consists of five vehicle loans. One new vehicle loan was obtained during 2006, and one vehicle loan was paid off during 2006. The scheduled principal maturities of long-term debt at December 31, 2006 are as follows:

2007		$	17,307
2008			11,560
2009			8,883
2010			4,578
2011			3,652
			45,980
Less: current portion			(17,307	)
		$	28,673

11. Stockholders’ Equity

The Company was incorporated in 2001 as a Subchapter S corporation. During June 2006, the Company became a C corporation in the State of Delaware. On August 11, 2006, the Company entered into a reverse merger transaction with Fairview as discussed in Note 1. Pursuant to the Merger, the stockholders of Akeena Solar received one share of Fairview common stock for each issued and outstanding share of Akeena Solar common stock, which totaled 8,000,000 shares. In addition, in connection with the reverse merger, the Company’s 1,000,000 outstanding warrants were exchanged for warrants of Fairview. The warrants to purchase 1,000,000 shares of the Company’s common stock were exercised and 1,000,000 shares of common stock were issued during 2006 at the exercise price of $0.01, for approximately $10,000. Akeena Solar’s common shares were also adjusted from $0.01 par value to $0.001 par value at the time of the Merger. Subsequent to the closing of the Merger, the closing of the Private Placement of

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

3,217,500 shares of the Company’s common stock at an issue price of $1.00 per share for a total of $3,217,500, net of placement agent fees of $131,539, and the cancellation of 3,877,477 shares of Fairview common stock, the former stockholders of Akeena Solar held a majority of Fairview’s outstanding common stock. The $131,539 of placement agent fees were comprised of $61,500 in cash fees paid and warrants to purchase 61,500 shares of the Company’s common stock valued at $70,039 (see Note 13). Since the stockholders of Akeena Solar own a majority of the outstanding shares of Fairview common stock immediately following the Merger, and the management and board of Akeena Solar became the management and board of Fairview immediately following the Merger, the Merger is being accounted for as a reverse merger transaction and Akeena Solar is deemed to be the acquirer. The assets, liabilities and the historical operations prior to the Merger are those of Akeena Solar. Subsequent to the Merger, the consolidated financial statements include the assets and liabilities of Akeena Solar and Fairview, and the historical operations of Akeena Solar and the operations of Fairview from the closing date of the Merger.

12. Stock Incentive Plan

On August 8, 2006, Akeena Solar adopted the Akeena Solar, Inc. 2006 Stock Incentive Plan (the “Stock Plan”) pursuant to which 450,000 shares of common stock were available for issuance to employees, directors and consultants under the Stock Plan as restricted stock and/or stock options. On December 20, 2006, the Stock Plan was amended to increase the number of shares available for issuance under the Stock Plan from 450,000 shares to 1,000,000 shares.

Restricted stock and stock options may be issued under the Stock Plan. The restriction period on the restricted shares granted shall expire at a rate of 25% a year over four years. Upon the lapse of the restriction period, the grantee shall become entitled to receive a stock certificate evidencing the common shares, and the restrictions shall cease to exist. The following table sets forth a summary of restricted stock activity for the year ended December 31, 2006:

						Weighted
		Number of				Average Fair
		Restricted				Value on
		Shares				Grant Date
Outstanding at January 1, 2006			—			$	—
Granted during 2006			407,305			$	1.76
Forfeited/cancelled during 2006			(48,898	)		$	1.00
Released/vested during 2006			(3,785	)		$	1.00
Outstanding at December 31, 2006			354,622

The restricted stock is valued at the grant date fair value of the common stock and expensed over the requisite service period or vesting period. The Company recognized stock based compensation expense of approximately $38,000 during the year ended December 31, 2006 relating to compensation expense calculated in accordance with SFAS 123R for restricted stock granted under the Stock Plan during the year ended December 31, 2006. SFAS 123R requires the estimation of forfeitures when recognizing compensation expense and that this estimate of forfeitures be adjusted over the requisite service period should actual forfeitures differ from such estimates. At December 31, 2006, there was approximately $545,000 of unrecognized share-based compensation expense associated with the non-vested restricted shares granted. Stock based compensation expense relating to these restricted shares is expected to be recognized over a period of four years.

SFAS 123R requires the cash flows as a result of the tax benefits resulting from tax deductions in excess of the compensation cost recognized (excess tax benefits) to be classified as financing cash flows. There are no excess tax benefits for the year ended December 31, 2006, and therefore, there is no impact on the accompanying consolidated statements of cash flows.

13. Stock Options and Stock Warrants

The Company’s 2001 Stock Option Plan (the “2001 Plan”) provides for the issuance of incentive stock options and non-statutory stock options. The Company’s Board of Directors, which, subject to the terms of the 2001 Plan, determines to whom grants are made, and the vesting, timing, amounts and other terms of such grants. Incentive

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

stock options may be granted only to employees of the Company, while non-statutory stock options may be granted to the Company’s employees, officers, directors, consultants and advisors. Options under the Plan vest as determined by the Board of Directors, but in no event at a rate less than 20% per year. The term of the options granted under the 2001 Plan may not exceed 10 years and the maximum aggregate shares that may be issued upon exercise of such options is 4,000,000 shares of common stock. No options have been granted under the 2001 Plan as of December 31, 2006.

In March 2001, the Company issued a warrant to purchase 1,000,000 shares of the Company’s common stock at an exercise price per share of $0.01 in exchange for the purchase of assets from Akeena Wireless, Inc. (“AWI”), a related party (see Note 15). The warrants to purchase 1,000,000 shares of the Company’s common stock were exercised and 1,000,000 shares of common stock were issued during 2006 at the exercise price of $0.01, for approximately $10,000.

During August and September 2006, the Company issued warrants to purchase 61,500 shares of the Company’s common stock at an exercise price per share of $1.00 to the placement agent that sold 41 units under the Private Placement. The fair value of these warrants was estimated using the Black-Scholes pricing model with the following weighted average assumptions: a risk-free interest rate of 4.9%, an expected life of three years, an expected volatility factor or 103.3% and a dividend yield of 0.0%. The value assigned to these warrants under the Black-Scholes estimate is approximately $70,000. The aggregate intrinsic value of the 61,500 warrants outstanding and exercisable at December 31, 2006 was approximately $160,000.

Therefore, as of December 31, 2006, warrants to purchase 61,500 shares of the Company’s common stock are outstanding and exercisable.

14. Income Taxes

As the Company was a Subchapter S corporation until June 2006, any taxable income or loss of the S corporation through June 2006 was included within the sole stockholder’s income for federal and state income tax purposes. During the year ended December 31, 2006, there was no income tax expense or benefit for federal and state income taxes in the accompanying consolidated statements of operations due to the Company’s net loss and a valuation allowance on the resulting deferred tax asset.

The actual tax expense differs from the “expected” tax expense for the year ended December 31, 2006 (computed by applying the U.S. Federal Corporate tax rate of 35% to income before taxes) as follows:

Computed “expected” tax benefit		$	(553,376	)
State income taxes			(86,959	)
Change in deferred tax asset valuation			640,335
Actual tax expense		$	—

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2006 are as follows:

Deferred tax asset:
Net operating loss carryforward		$	640,335
Less: Valuation allowance			(640,335	)
Net deferred tax asset		$	—

At December 31, 2006, the Company had useable net operating loss carryforwards of approximately $1.6 million for federal and state income tax purposes, available to offset future taxable income expiring in 2016 and 2026, respectively. The net change in the valuation allowance during the year ended December 31, 2006 was an increase of approximately $640,000.

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

Unaudited Pro Forma Information

During June 2006, the Company terminated its S corporation tax status and became taxable as a C corporation. If the Company were taxable as a C corporation for all periods presented, there would be no effect for the year ended December 31, 2006, while pro forma net income for the year ended December 31, 2005 would have been approximately $1,200 and pro forma earnings per share would have been $0.00 per share. Historical earnings per share for the year ended December 31, 2005 was $0.00.

15. Related Party Transactions

The Chief Executive Officer of the Company is a director of AWI and is currently a custodian for AWI. The Company has an amount due from a related party for expenses of approximately $22,000 paid by the Company on behalf of AWI, which are recorded as “Due from related party” within the accompanying consolidated balance sheet.

16. Commitments and Contingencies

Non-Cancelable Operating Leases

The Company’s operating lease for its Los Gatos, California office facility expired during April 2006, and was subsequently renewed through July 2007. The Company’s operating lease for its Los Gatos, California warehouse facility expires in June 2010. The Company rents office and warehouse space in New Jersey on a month-to-month basis and also rents office space in Clovis, California on a month-to-month basis. Total rent expense amounted to approximately $87,000 and $80,000 for the years ended December 31, 2006 and 2005, respectively. During December 2006, the Company entered into an operating lease to rent approximately 2,400 square feet of office space located in Orange County, California, which expires in December 2008.

Future minimum lease payments on operating leases at December 31, 2006 are as follows:

2007		$	161,369
2008			126,924
2009			101,520
2010			50,760
2011			—
Thereafter			—
Total minimum lease payments		$	440,573

Litigation

The Company is involved in certain legal proceedings arising in the ordinary course of business. In the opinion of management, the outcome of such proceedings will not materially affect the Company’s financial position, results of operations or cash flows.

Employment Agreement

The Company has an employment agreement with an employee which provides for an annual salary of $120,000 and expires December 31, 2008. There are automatic one-year renewals unless written notice is given within 30 days of the end of the term by either party.

17. Significant Concentrations of Business and Credit Risk

Financial instruments that potentially subject the Company to credit risk are comprised of cash and cash equivalents, which are maintained at high quality financial institutions. At December 31, 2006, there was approximately $1.0 million in excess of the FDIC limit of $100,000.

The Company maintains reserves for potential credit losses and such losses, in the aggregate, have generally not exceeded management’s estimates. The Company has three vendors that accounted for approximately 79.6% and

AKEENA SOLAR, INC.
Notes to Consolidated Financial Statements
December 31, 2006 and 2005

89.0%, respectively, of materials purchases during the years ended December 31, 2006 and 2005. At December 31, 2006, accounts payable included amounts owed to the 2006 top three vendors of approximately $1.3 million.

18. Subsequent Events

On January 29, 2007, the Company entered into a Loan and Security Agreement with Comerica Bank for a $2.0 million line of credit (the “2007 Credit Facility”) to replace the Company’s 2006 Credit Facility dated December 19, 2006. As of March 27, 2007, approximately $100,000 is outstanding under the 2007 Credit Facility, in addition to a $250,000 letter of credit, and approximately $1.7 million in additional borrowing capacity is available.

During January 2007, 54,621 shares of the Company’s common stock were issued at a value of approximately $176,000 in accordance with the terms of the Purchase Agreement as described in Note 6. During March 2007, the Company’s Board of Directors approved the granting of an aggregate of 31,520 restricted common stock to employees under the Company’s Stock Plan.

During March 2007, the Company raised approximately $4.1 million under a private investment offering. The Company issued 2,062,304 shares of common stock and warrants to purchase 412,460 shares of the Company’s common stock, with exercise prices ranging from $2.75 — $3.00 per share. Under the terms of the offering, the Company is obligated to file a registration statement with the SEC covering the shares of common stock issued and the shares underlying the warrants in April 2007.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Indemnification of Directors and Officers

     Section 145 of the Delaware General Corporation Law, which we refer to as the “DGCL,” provides, in general, that a corporation incorporated under the laws of the State of Delaware, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses.

     Our Certificate of Incorporation and By-laws provide that we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the DGCL, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders’ or directors’ resolution or by contract. Any repeal or modification of these provisions approved by our stockholders will be prospective only and will not adversely affect any limitation on the liability of any of our directors or officers existing as of the time of such repeal or modification.

     We are also permitted to apply for insurance on behalf of any director, officer, employee or other agent for liability arising out of his actions, whether or not the DGCL would permit indemnification.

Item 25. Other Expenses of Issuance and Distribution.

     The following table sets forth the various expenses payable by us in connection with the sale of the Common Stock being registered. All of the amounts shown are estimated except the SEC registration fee.

SEC registration fee		$	210
Legal fees and expenses			10,000
Accounting fees and expenses			18,000
Total		$	28,210

Item 26. Recent Sales of Unregistered Securities.

     During the past three years, we have issued the following unregistered securities. None of these transactions involved any underwriters, underwriting discounts or commissions, except as specified below, or any public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(2) thereof and/or Regulation D promulgated thereunder.

     In connection with a reverse merger between Akeena Solar, Inc., a private Delaware corporation, and a wholly-owned subsidiary of ours, we completed the closing of a private placement of our common stock in which, through September 7, 2006, we sold an aggregate of 128.7 units to accredited investors. Each unit consisted of 25,000 shares of our common stock. As a result of the private placement, we issued a total of 3,217,500 shares of our common stock. Some units were offered by Westminster Securities Corporation, pursuant to the terms of a

placement agent agreement dated July 21, 2006. The placement agent received (1) a cash fee of $61,500 (representing 6% of the gross proceeds of the units sold by it in the private placement) and (2) three-year warrants to purchase 61,500 shares of our common stock (representing 6% of the shares sold by it in the private placement) at an exercise price of $1.00 per share. We realized gross proceeds of $3,217,500 from the private placement before commissions and expenses.

     The common shares issued under the private placement are subject to registration rights pursuant to a registration rights agreement. The registration rights agreement contains a liquidated damages provision whereby liquidated damages may accrue and are payable in cash or common stock at fair market value, at our discretion, at the rate of 1% of the aggregate amount invested by the investors per 30 day period (or pro-rated for partial periods) if (i) a registration statement is not filed within 90 days of September 7, 2006; (ii) such registration statement is not declared effective within 120 days of the initial filing date; (iii) such registration statement is not kept effective until the earlier of (a) 18 months after September 7, 2006 and (b) the date when all registrable securities have been sold; (iv) we do not respond to initial comments of the SEC within 21 days after our receipt of such comments; or (v) if we fail to use our reasonable best efforts to cause the registration statement to be declared effective. The liquidated damages is limited under the registration rights agreement to a 6% maximum amount. As of this date, we have complied with all of the clauses and do not owe any liquidated damages.

     On August 30, 2006, subsequent to the reverse merger, we issued an aggregate of 262,148 shares of restricted common stock (of which 4,989 shares were forfeited on November 15, 2006) for services rendered to various employees and a director, which shares were valued at the private placement offering price of $1.00 per share, or an aggregate of $262,148. There were additional grants made on October 2, 2006 and October 15, 2006 for an aggregate of 43,040 and 34,968 restricted shares, respectively, valued at the common stock closing prices of $2.99 and $2.60, respectively, for a combined value of $219,606. On December 15, 2006, we issued an additional 67,149 shares of restricted common stock, valued at the common stock closing price of $2.40 per share, or an aggregate of $161,158. The total value of all restricted stock grants issued subsequent to the reverse merger is $642,912.

     On March 8, 2007, we sold (i) 2,062,304 shares of our common stock, (ii) three-year warrants to purchase 206,230 shares of common stock at an exercise price of $2.75 per share and (iii) three-year warrants to purchase 206,230 shares of common stock at an exercise price of $3.00 per share, pursuant to a Securities Purchase Agreement among us and the purchasers signatory thereto. We received aggregate gross proceeds of approximately $4.1 million from the sale of the common stock and warrants.

     Empire Financial Group acted as placement agent with respect to the offering and received a cash fee equal to $124,250 and warrants to purchase 53,250 shares of our common stock at an exercise price of $2.75 per share. The Westley Group acted as a finder with respect to the offering and received a cash fee equal to $35,000 and warrants to purchase 15,000 shares of our common stock at an exercise price of $2.75 per share. Westminister Securities Corp. also received a finders fee of $21,000 and warrants to purchase 11,726 shares of our common stock at an exercise price of $1.97 per share.

     Pursuant to a Registration Rights Agreement, we agreed to file a registration statement covering the resale of the common stock and the shares of common stock underlying the warrants no later than 30 days from the closing of the offering and to have such registration statement declared effective no later than 90 days from the closing of the offering. If we do not timely file the registration statement or cause it to be declared effective by the required dates, then each investor in the offering shall be entitled to liquidated damages equal to 1% of the aggregate purchase price paid by such investor for the securities, and an additional 1% for each month that we do not file the registration statement or cause it to be declared effective. Notwithstanding the foregoing, in no event shall liquidated damages exceed 9% of the aggregate gross proceeds of the offering.

Item 27. Exhibits

(a) Exhibits

Exhibit
Number		Description
2.1		Agreement of Merger and Plan of Reorganization, dated August 11, 2006, by and among Fairview Energy Corporation, Inc., ASI Acquisition Sub, Inc. and Akeena Solar, Inc. (incorporated herein by reference to Exhibit 2.1 to our Current Report on Form 8-K, dated August 11, 2006 (the “August 2006 8-K”))
3.1		Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, dated August 3, 2006)
3.2		By-laws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K, dated August 3, 2006)
3.3		Certificate of Amendment to Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 to the August 2006 8-K)
4.1		Form of Restricted Stock Agreement (incorporated herein by reference to Exhibit 4.1 to our Annual Report on Form 10-KSB for the year ended December 31, 2006 (the “2006 10-KSB”))
4.2		Form of Class B Common Stock Purchase Warrant, dated March 8, 2007 (incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K, dated March 8, 2007 (“March 8, 2007 8-K”))
4.3		Form of Class A Common Stock Purchase Warrant, dated March 8, 2007 (incorporated herein by reference to Exhibit 10.4 to the March 8, 2007 8-K)
4.4		Registration Rights Agreement (incorporated hereby reference to Exhibit 10.2 to the March 8, 2007 8-K)
5.1*		Opinion of Haynes and Boone, LLP
10.1		Akeena Solar, Inc. 2006 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the August 2006 8-K)
10.2		First Amendment to the Akeena Solar, Inc. 2006 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K, dated December 20, 2006)
10.3		Form of Subscription Agreement (incorporated herein by reference to Exhibit 10.2 to the August 2006 8-K)
10.4		Form of Registration Rights Agreement (incorporated herein by reference to Exhibit 10.3 to the August 2006 8-K)
10.5		Form of Lockup Agreement (incorporated herein by reference to Exhibit 10.4 to the August 2006 8-K)
10.6		Loan and Security Agreement, dated January 29, 2007, between Akeena Solar, Inc. and Comerica Bank (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K, dated January 29, 2007)
10.7		Guaranty of Barry Cinnamon to Comerica Bank, executed December 19, 2006 (incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K, dated December 19, 2006)
10.8		Restricted Stock Agreement, dated December 29, 2006, between the Akeena Solar, Inc. and Edward Roffman (incorporated herein by reference to Exhibit 10.8 to the 2006 10-KSB)

Exhibit
Number		Description
10.9		Form of Director and Officer Indemnification Agreement (incorporated herein by reference to the Exhibit 10.9 to the August 2006 8-K)
10.11		Standard Industrial/Commercial Single-Tenant Lease — Net, dated September 30, 2002, between Mattiuz Children’s Trust and Akeena Solar, Inc., as amended by First Addendum to Standard Industrial/Commercial Single-Tenant Lease — Net, dated April 26, 2004, Second Addendum Standard Industrial/Commercial Single-Tenant Lease — Net, dated April 30, 2005 and Third Addendum to Standard Industrial/Commercial Single-Tenant Lease, dated July 7, 2006 (incorporated herein by reference to Exhibit 10.11 to our Current Report on Form 8-K/A, dated August 11, 2006 (the “August 2006 8-K/A”))
10.12		Letter Agreement, dated July 21, 2006, between Akeena Solar, Inc. and Westminster Securities Corp. (incorporated herein by reference to the August 2006 8-K/A)
10.13		Securities Purchase Agreement, dated March 8, 2007, between Akeena Solar, Inc. and the purchasers signatory thereto (incorporated herein by reference to Exhibit 10.1 to the March 8, 2007 8-K)
10.14		Non-Exclusive Finder’s Agreement, dated February 8, 2007, between Akeena Solar, Inc. and Empire Financial Group, Inc. (incorporated herein by reference to Exhibit 10.14 to the 2006 10-KSB)
21.1		List of Subsidiaries (incorporated herein by reference to Exhibit 21.1 to the August 2006 8-K)
23.1*		Consent of Burr, Pilger & Mayer LLP
23.2*		Consent of Marcum & Kliegman LLP
23.3*		Consent of Haynes and Boone, LLP (included in Exhibit 5.1)
24.1*		Power of Attorney (included on signature page)

Item 28. Undertakings

The undersigned registrant hereby undertakes that it will:

(1)

File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:

	i.		Include any prospectus required by Section 10(a)(3) of the Securities Act;
	ii.		Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
	iii.		Include any additional or changed material information on the plan of distribution.

	(2)		For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

	(3)		File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
	(4)		For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	i.		Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424;
	ii.		Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;
	iii.		The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and
	iv.		Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.

	(5)		Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as express in the Act and is, therefore, unenforceable.
	(6)		For determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the small business issuer under Rule 424(b)(1), or (4), or 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective.
	(7)		For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.