Solar Enertech Releases 4th Quarter Finacials

Menlo Park, Ca., Dec. 28 /Xinhua-PRNewswire/ -- - Solar EnerTech Corp. (OTC Bulletin Board: SOEN) (the "Company") today announced results for the fourth quarter and the 2007 fiscal year.

For the fourth quarter ended September 30, 2007, Solar EnerTech reported total revenue of $4.1 million compared to no revenue in the same period in 2006. The Company incurred a negative gross profit of $368,000 for the quarter ended September 30, 2007.

Total operating expense, which included a $3.0 million non-cash stock compensation charge related to the hiring and retention of key executives, was $4.1 million for the quarter ended September 30, 2007. Excluding stock compensation expense, operating expense for the quarter was $1.1 million.

Net income for the fourth quarter, which included $10.4 million in non-cash gains associated with a change in fair market value of compound embedded derivative liability and change in fair market value of warrant liability, was $5.1 million. Both the compound embedded derivative and
warrant liabilities were recorded in conjunction with the convertible notes transaction entered into by the Company in March 2007. Excluding these non-cash gains, the Company had a net loss of $5.3 million, or $(0.07) per diluted share.

Mr. Leo Young, Chief Executive Officer of Solar EnerTech commented, ''Our results for the fourth quarter met our internal plan as we continued to take the appropriate steps to ramp up production and expand capacity. During our 2007 fiscal fourth quarter, we had one production line running, while we fine-tuned our manufacturing process and made progress towards
completing our second manufacturing facility. These initiatives have positioned us well for increased solar cell shipments in fiscal 2008.''

For the fiscal year ended September 30, 2007, Solar EnerTech reported total revenue of $5.6 million, compared to no revenue in the 2006 fiscal year. During its initial production run, the Company incurred higher than average manufacturing costs which resulted in a negative gross profit of $361,000 for the fiscal year ended September 30, 2007. Total operating expense, which included a $9.3 million non-cash stock compensation charge, was $12.0 million for the year ended September 30, 2007. Excluding stock compensation expense, total operating expenses for the 2007 fiscal year were $2.7 million.

The Company recorded a net loss of $29.4 million, or ($0.38) per diluted share in fiscal 2007, which included $15.7 million in non-cash losses associated with the issuance of convertible notes, the change in fair market value of compound embedded derivative liability and change in
fair value of the warrant liability. Excluding these non-cash charges, the Company had a net loss of $13.7 million, or $(0.18) per diluted share.

Mr. Young continued, ''We are pleased with the progress we made in our business during the course of fiscal 2007 and are proud of our accomplishments. In addition to growing our revenues, we established a joint R&D venture with Shanghai University, completed our first 25 MW solar cell production line, signed a long-term material silicon supply agreement, obtained ISO 9001 and 14001 Certifications, received IEC Certification which has facilitated our entry into the European market, added an additional 21,000 square feet of manufacturing space which will increase future module production capacity, and improved our accounting and corporate governance functions.''

Order trends for Solar EnerTech's businesses continue to track internal expectations and the Company has positive, growth-driven momentum heading into fiscal 2008. The Company's revenue outlook for the fiscal 2008 first quarter, ending December 31, 2007 is $4.7 million to $5.0 million.

''As we look to the first quarter of 2008, our business continues to be on track and we have positive, growth-driven momentum for photovoltaic cell and module sales as customer demand remains very high in Europe and is increasing in other countries around the world. We were pleased to recently announce our largest sales contract win to date to ship solar modules to
one of the largest solar system integrators in Europe. We expect the majority of this $21.8 million contract to be fulfilled in our fiscal 2008 second quarter. We have completed our first production line and are currently working diligently to ensure that our second production line is
up and running in the second half of calendar year 2008. The growth of the renewable energy market remains strong and we are well positioned to increase our performance with our leading solar cell products and modules,'' concluded Young.

As of September 30, 2007, the Company had $3.9 million in cash, $900,000 of accounts receivables, $6.5 million of prepayment primarily for purchase of raw materials and $5.7 million of inventories on hand. Additionally, the Company had $9.6 million of accounts payable and accrued liabilities. It also recorded $16.8 million of derivative and $17.4 million of warrant liabilities.