Ladies and gentlemen, welcome to the third quarter 2008 Spire Corporation investor conference call. My name is Anne, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session toward the end of this conference. On the call with us today is Roger Little, the Chairman and CEO of Spire Corporation; Christian Dufresne, the Chief Financial Officer of Spire Corporation; and, Mark Little, CEO of Spire Biomedical. I would now like to turn the call over to Christian Dufresne. Please go ahead, sir.

Thank you, Anne, and good morning, everyone. If you have not yet received a copy of our third quarter news release, which was issued yesterday, it is posted on Spire’s Web site at spirecorp.com. If you wish to be put on our contact list, please email Investor Relations at spirecorp.com. Before we begin, please note that the various remarks that we may make on this conference call about the company's future expectations, plans, and prospects constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of management, and are subject to significant risks and uncertainties. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors, including those discussed in our annual and quarterly reports on file with the Securities and Exchange Commission. We disclaim any duty to update such forward-looking statements. With that, I‘d like to turn the call over to Spire's Chairman and CEO, Roger Little.

Thank you, Christian, and thanks everyone for joining us on our third quarter conference call. As you have seen from yesterday’s press release, it was – third quarter was a good quarter for us. We also issued amended filings for the last three quarters to restate the revenue recognition issue that we had on one contract. And I’ll let Christian discuss the details of that a little later on in this call. This was our second quarter of revenue growth and the second quarter in a row when sales on our solar capital equipment and turnkey factories more than doubled from last year’s quarter. We achieved record sales of $17.5 million, and continued to improve our margins, and were profitable operationally by $450,000 for the quarter. And this profitability was driven principally by the solar business. Although our Biomedical services product line did well, we still experienced losses associated with the cap at our product line and our semiconductor operations. It was very satisfying to have achieved a bottom line profitability at $450,000. Demand for our factories did continue in Q3 in this period. And we had new entrants, both internationally and domestically. Established crystalline silicon manufacturers continued to add capacity in anticipation of the availability of poly silicon. And also, new thin film factory investments came on strong, principally in the US. Although we do some business in China, as you know, we have strength in Europe, the US, and India as well. During Q3, we delivered turnkey lines to India, Russia, and one to China. We also received orders for major expansions from customers that we started in module manufacturing. These were from customers in Taiwan and Spain. We introduced a totally integrated 25-megawatt per year combined cell and module manufacturing line. We did receive an order for…

Thanks, Roger, and good morning, everyone. I will first discuss the restated financial filings, and then discuss the third quarter results. The company issued an 8-K yesterday stating that previously issued audited financial statements for the company for the fiscal year ended December 31st, 2007 and the un-audited financial statements for the first and second quarters of 2008 should no longer be relied upon, and that they must be restated because they contain errors under generally accounted – accepted accounting principles, GAAP, in the US relating to the recognition of revenue. On the same day, the company issued an amended 10-KA for 2007, 10-KA for Q1 – Q1 and Q2 of 2008, when it issued its Q3 financial results for 2008. The company determined that a single customer was provided a concession, which was previously undisclosed and undocumented to upgrade specific tools sold in conjunction with the module line delivered to this customer. As the fair value of the upgrade could not be – cannot be determined as of yet, as a result, the company needs to defer all revenues for the entire contract until the upgrade is provided to the customer or its fair value is determined. Prior to issuing these amended filings, an internal review of the other solar contracts were conducted to determine if any such concessions or side arrangements had been – were timely conveyed, such that revenue could be appropriately recognized. The review revealed that except for the one contract in question, all customer concessions and modifications were conveyed on a timely basis. And revenue was appropriately recorded in all other cases during the period under review. The company has concluded that only this single contract, which generated revenue in the previously reported fourth quarter of 2007 and the first quarter of 2008 needed to…

Thank you, Christian. Before we take your questions, I wanted to conclude my comments today with some comments on the current trends in the marketplace and how they affect us. Although, world economy has problems and the overall PV market has slowed down, it still continues to grow. And there is underlying strength in the market in the longer term. But we do expect the economic climate to have a negative effect upon smaller, less capitalized companies, companies that we have helped get into the business. We do expect fewer entrepreneurial start ups in the coming year. However, with the decline of other industries, especially the semiconductor industry, we’ve seen announcements by well capitalized companies of their plans to enter into the PV market. Companies in the automotive industry as well as semiconductor industry, these are industries even in much deeper trouble than anything going out on solar, they see solar as an opportunity to grow, companies like Hanwha that we’ve recently received for the solar cell line. In these diversifying companies, we’ll need the equipment that we provide to get into the business. We see the global shortage of poly silicon already receding, at it should be plentiful in 2009. We believe that we’ll reduce module costs. I think we’re seeing that already in the marketplace, in that we’ll eventually stimulate the market to grow at an even faster rate in perhaps the year 2010. Crystalline silicon still dominates the market and is expected to do so with its higher efficiency and demonstrated lifetime, which translates into lower costs for systems and actual electricity produced over time. We like that model of crystalline silicon because silicon modules are easy to manufacture in a distributed manufacturing mode. As transportation costs have become a significant part of module costs, it makes…

(Operator instructions) And the first question comes from Vijay Rakesh with ThinkEquity. Please proceed. Vijay Rakesh – ThinkEquity: Hi, guys, just on the quarter. I mean you said because of a timing issue you had backed the short term customer deposits. The backlog went from $77 million to $39.8 million. I’m just wondering how – is there – have you seen any actual order – I mean cancellations on the order book or is it just – and what is the actual timing difference between the two, basically, recognizing that?

Just one clarification, Vijay, our short term deposits went from $25 million or $24 million to $38 million. They didn’t go from $77 million. Vijay Rakesh – ThinkEquity: Well, from the second quarter to third quarter, you’re saying.

Yes. Vijay Rakesh – ThinkEquity: Okay.

It was something like $25 million to $38 million. Vijay Rakesh – ThinkEquity: Got it. Okay. So basically, it looks like things are still fine there. I’m just wondering, when you look at your–

We haven’t seen any cancellations. We’ve seen one order restructure, and we had an order for four simulators to be delivered in early next year, and two of them re now to be delayed for some period of time. So we’re seeing a delay in order – and restructured order. Vijay Rakesh – ThinkEquity: Got it. Okay. And when you look at your customer base, are you seeing – I mean there is some, and obviously, chartered, that’s why I’m asking. Are you seeing any current issues? Is there is some, how much of your customer base is exposed to that tier 2, tier 3 guidance in China, or Taiwan, or Europe?

Yes. We’ve seen that there will be a tightening – some of these entrepreneurial firms are experiencing a tightening of credit. So some of the marketing sales activities we had ongoing, our customers are saying, “We can’t do it right now.” These are the smaller deals. But as I said, there are some big deals that we have structured and they relate large companies who have the resources now wanting to enter the business, situations like that. Vijay Rakesh – ThinkEquity: At least we got a pro alternative administration now, so. One other question is on the revenue recognition side that you just mentioned on the quarter, you might have already elaborated, but was it related to any financing issue? Was it a technical issue? Can you give a little bit more color to that? Do you see that being recognized here in the fourth quarter? What’s the timeline on that?

The timeline is to recognize it when we deliver the upgraded option. And we’re actively working to complete that upgrade because it is an offering we’re offering in the market. And we hope to finish it this quarter, but it may flip into next quarter. Vijay Rakesh – ThinkEquity: Okay. Good. Thanks so much, guys. Good job.

And the next question comes from the line of Adam Krop with Ardour Capital. Please proceed. Adam Krop – Ardour Capital: Good morning, gentlemen.

Good morning. Adam Krop – Ardour Capital: Just one quick question on the – could you provide an update on the Martifer contract? Is that line installed and up and running? Is there more work to be done there? I’m just trying to get a little bit more clarity on that $80 million in revenue number for 2008. Thanks.

The Martifer contract, all the equipment is there. It’s a matter of giving it all to play together. We have the rest of – scheduled for getting it through acceptance before year-end because it is a significant part of our Q4 revenue line. All equipment is there. We’ve got technicians there. We’ve got some contractors there. And it has not yet been fully accepted, however. Adam Krop – Ardour Capital: Okay. Thanks, guys. And just one follow up, you talked a little bit about – in your prepared remarks about some slowing – slowing orders in 2009. A lot of the Chinese companies that we’ve been listening to recently, at least in their 3Q announcement, have been talking about reducing CapEx. I guess, how is that affecting your order flow for 2009? And can you provide any guidance as far as maybe a growth rate, a revenue run rate or growth rate for the 2009 time period.

Well, we have done a tremendous amount of business with the Chinese to date. And we do sell them individual pieces of equipment. And we did get the delay of the two simulators from a Chinese customer, so most of our revenues have been from other parts of the world. In terms of 2009, we’ve grown so quickly over the past years. The times get to be (inaudible). It’s comforting to grow again in 2009, but not at a doubling rate. We don’t expect that. And if you look at 2009 is an opportunity for us to get our house in order, and to improve on a lot of funds, including the basic design and manufacturer of our equipment. Adam Krop – Ardour Capital: Okay. Fair enough. And then, just finally, I know at one point, and maybe early 2008, you were talking about SG&A as a percentage of sales somewhere around 20%. I guess, what is the timeline on that? Can you give a little bit more color there?

Christian.

When we gave that number, it would have been based on the full year results. So given the guidance that we’re giving, we should expect a reduction in Q4. So average that over the whole year, that’s when we’re going to approach that 20%. Adam Krop – Ardour Capital: Okay. Thanks very much, guys.

And the next question comes from the line Rob Young with William Smith & Company. Please proceed. Ed Einboden – William Smith & Company: Good morning, everybody. It’s actually Ed Einboden for Rob. Great quarter.

Thank you. Ed Einboden – William Smith & Company: I just have a couple of questions really quick. You guys kind of talked about larger – or the opportunity for larger businesses getting into the space. Do you think where you sit with turnkey operations really falls into their sweet spot in starting these applications? Or do you think they may look to a piecemeal they’re offering when they enter this – the space?

Well, I think that they look for turnkey because if you go to an auto parts company, the last they know a lot about is making a solar cell module. Those are more inclined to buy turnkey. Maybe as they expand later on in the future, and we see that with some of our customers, they tend to pick and choose the kind of equipment and properties that they want. But entering this business, everyone wants turnkey. Ed Einboden – William Smith & Company: Okay. Great. And I guess from the aspect of headcount, with next year and the volatility that you guys could see in orders being – either they’re entrepreneurial or large, what kind of headcount do you guys envision or headcount growth you envision for next year?

Well, I believe right now our permanent employees as well as contract employees, we have around 280 people. We probably will add, at most, another 10 next year. That’s my view because we have so many people in place. And as they learn the ropes, they become more efficient so we can be more productive with the staffing now. So we don’t anticipate a whole lot of new hiring next year. Ed Einboden – William Smith & Company: Okay. Great. Could you at all quantify what kind of headwinds that you guys have been seeing, whether it be in the revenue line or just overall interest and calls that you’re getting as a result of sort of the credit availability out there?

Well we continue to get a tremendous amount of interest from all over the world from people who want to get into this business. And we’ve staffed up our sales force. And hopefully, we’re aggressively pursuing all of these leads. But so far, we’ve doing the low hanging the food thing. And it’s time to retire the tree, is my view. So that’s one thing we have to make sure we do in ’09, just be more aggressive and follow the leads to the end and a lot of the opportunities. We’ve continued a phase competition throughout the world. There’s no question about it. We have one of the aggressive Japanese companies that we’ve (inaudible) everywhere we go. And we see that the Europeans are beginning to talk about the kind of product line that we offer. But so far, they haven’t been able to penetrate our market, principally due to high Euro and things like that. So we do see competition as a headwind, but we see opportunity as well. Ed Einboden – William Smith & Company: Okay. And I guess, just lastly, if you guys could update us on your current NOL position.

Our current NOL position is somewhere around $8.5 million. Ed Einboden – William Smith & Company: Okay. Great. And great job on the quarter.

And the next question comes from the line of Brian Yerger with Jesup & Lamont. Please proceed. Brian Yerger – Jesup & Lamont: Good morning, guys. Thanks for taking my questions.

Good morning. Brian Yerger – Jesup & Lamont: I just had a – a lot of questions have been answered about the backlog that I just wanted to try and get a little bit more detail. You guys don’t break the backlog into segments, correct? Is there any additional color you could provide there?

We do not break out the backlog. What we can say is that the backlog really has not changed necessarily given how we – what we’re currently selling in current regions of the country, the world. So we are still continuing to see demand from both Asia, Europe, India, and the US. Brian Yerger – Jesup & Lamont: Okay. You do feel that next year the US should be, I’ll say, a larger portion of that business sales?

Yes. I think we do see that. I think, as I mentioned, the SAI program has stimulated a lot of new startups as the new startups are, on record, as saying there’s increasing manufacturing capacity. So we are seeing that. Brian Yerger – Jesup & Lamont: Okay. And in terms of timing, if we could get a little more color in terms of your backlog, I’d say, first half versus second half of ’09. I know it’s a 12-month backlog. So I don’t want to get to – just maybe to Q3 of ’09. But do you have a feel as to where these – the revenue recognition issues aside, where are you going to see the majority of those things? Do you anticipate it to be bulk of these contracts?

Well most of our backlog is a six-month backlog, which does ride over nine months. And the real question is how rapidly does it grow for the latter part of next year, and it will depend upon two or three major orders that we’re working on in the sales and marketing capacity, in some respects, and then, the rebound of the current manufacturers as well towards the end of the year. Now it’s hard to say what the last half of ’09 looks like right now. Brian Yerger – Jesup & Lamont: Okay. Great. Now, when you’re talking about the – you’re getting a lot of leads, obviously, some of the smaller leads are going away. Do you have a certain conversion percentage of leads and the contracts? I mean, can you give us a little color on the fact that you’re obviously getting a lot of leads, but are we at the low conversion rate or–?

Well, if you just take the hits that come in through the normal Web site and all, then the conversion rate is pretty low. I mean it runs 5% or something. But if you go to those deals that the sales guys actually work on, the conversion rate is much higher. It might be 30% or 40%. Brian Yerger – Jesup & Lamont: Okay. I guess I’m asking the question the wrong way. Out of the total leads, how many leads would you say are qualified? And are those qualified leads dramatically falling off due to the credit and global economy crisis?

First, the total number of leads that we’ve seen remain high. The qualified leads have dropped off. Whereas before we might have taken 10% or 15% of the leads that come in and taken them seriously, they probably have dropped around half of that. But the major opportunities are with existing customers and manufacturers that are currently in floatable tax. And those are not where I would throw in the lead bucket, but they’re just continuing customer relationships. Brian Yerger – Jesup & Lamont: Okay. One last question on leads or competition, in terms of the European competition emerging with the dollar being strong, I guess that’s taken a little bit of your competitive advantage away. Do you see that an issue going into next year if the Euro continues to weaken?

We haven’t seen it yet. It’s just too soon. I think that going into next year, we may encounter some of that. Typically, however, the foreign currency ratio hasn’t been – even though were lower priced, we still had a slight German technology, and so forth and so on. But foreign currency valuations have not been a big swing in our business. Now, whether the changes as the Euro gets cheaper with respect to the dollar, I don’t think so. But we’ll see. Brian Yerger – Jesup & Lamont: Okay. Thanks.

And the next question comes from the line of Tom Zulist [ph] with KeyAdvisors. Please proceed. Tom Zulist – KeyAdvisors: Yes. Can you give me a little bit of color on what you’re seeing the solar industry, the percentage of crystalline opportunity versus thin film? Which area is growing the most? And also, do you have any applications in Nano, or is still too far out?

Well, there certainly have been a lot of thin film investment, as you can tell from the press, in applied materials releases and so forth, over the past year. And if you look at new capacity being put in place based upon those releases, you would conclude that thin film is getting more investment than crystalline. However, we don’t see a lot of thin film on the market. And we know that there are some issues associated with lifetime and reliability. So what we see in the marketplace does not reflect what might be coming down the line in terms of manufacturing capacity. Crystalline silicon still dominates the market well over 80%. And as far as we’re concerned, that’s the way it will be for quite some time, even though perhaps new thin film factories come on line. So that’s our view of thin film versus crystalline. Does that answer your question? Tom Zulist – KeyAdvisors: Yes. And I guess, a follow up would be that with the reduction in silicon cost that could increase the opportunity for you as well, correct?

Absolutely. With the silicon cost of poly dropping, and being the dominant module, module costs will come down and the market should expand. And we’ll see more and more of silicon activity. Tom Zulist – KeyAdvisors: And is there anything happening with Nano that is of significance and breakthroughs there? Or is still pretty much development?

It’s pretty much development. Although, I understand some people are making some progress. It will be quite some time, in our view, before we see that anywhere near the market. Tom Zulist – KeyAdvisors: Okay. Thank you.

You’re welcome.

And our next question comes from the line of Carlo Cannell with Cannell Capital. Please proceed. Carlo Cannell – Cannell Capital: Hi. Thanks for taking the call. Three questions, the first, have you collected the termination fee from, if I’m pronouncing it correctly, Ningbo.

We have not collected a termination fee. It’s currently being negotiated. Carlo Cannell – Cannell Capital: Okay. Do you have any idea, any feeling for when you might be able to collect these, if ever?

We expect that we would collect it in this quarter, before the end of the year. Carlo Cannell – Cannell Capital: Okay. And the amount?

Christian, you think you ought to address this? I mean, you okay with that? I mean–

We would expect to – as we put out in our 8-K towards the September 1st that we would collect $5.8 million in terms of the current exchange rate at that point in time. And that is based on the remaining formula for remaining term of the license. And if the license terminated earlier, we would collect a little more than that. And it would be somewhere in the order of about $6.5 million. Carlo Cannell – Cannell Capital: Okay. So still under negotiation, I guess.

It still has to be negotiated if we were to terminate. Or if the relationship were to end earlier, we would get a larger sum. Carlo Cannell – Cannell Capital: Okay. And then, I’m wondering if you could clarify for me the following sentence in your Form 10-Q. I think maybe there’s a typo in there, and it’s on page 21 related to the effectiveness of the shelf. And the sentence, which I question about is as follows, “Due to the late filing of this Form 10-Q, we will not be able to use this shelf statement after we file our annual report on Form 10-K for the fiscal year ended 31/1/2008”, number 31st. You mean to say–

No. That is correct. Carlo Cannell – Cannell Capital: It is correct as it reads.

It is correct as it reads. Carlo Cannell – Cannell Capital: Okay. So when might you be able to use the shelf?

We can utilize – under the rules, we are allowed to utilize the shelf up until we file our 10-K for 2008. Carlo Cannell – Cannell Capital: I see. And then, in order to keep it current, it’s just a matter of – procedural matter of–

No. With the late filing, we would not be able to utilize the shelf after that for one year. Carlo Cannell – Cannell Capital: For one year. Carlo Cannell – Cannell Capital: Yes. And it’s going to be remedied in any way? Can’t you just file a second shelf or–?

You just can’t use that particular form, the S-3 form. There are other forms you could use. Carlo Cannell – Cannell Capital: Okay. What are the company’s intent to be able to issue new shares subsequent to the filing of the Form 10-K in early 2009.

Roger, why don’t you direct.

Well, I think the way the market is and the market cap is, our firm believes that we should be able to continue with what’s – what we can do in business, and not have to issue new shares for ’09 and beyond, at least at the year that we can’t use the shelf. Carlo Cannell – Cannell Capital: Okay. And then my next and final question as it relates to the accounts receivables. Can you break those out in terms customers, of course, but what percentage are – you wrote a 90 days – 90 days to 150 days, and maybe some that are beyond 150 days, about 108 days on a consolidated basis on the quarter?

We do not have that information currently either from their tips. Most of our stuff consists of deposits or new business, and then invoices for shipments. Typically, those are backed by LCs. And the days outstanding are – is not a lot of stuff over 150 days. Carlo Cannell – Cannell Capital: Okay. Let me ask the question in a slightly different way? Can you tell me what percentage of your total receivables at the end of this – come September 30th were over 100 days?

I don’t have that information off the top of my head. Carlo Cannell – Cannell Capital: Okay. Thank you.

(Operator instructions) And the next question comes from the line of Vijay Rakesh with ThinkEquity. Please proceed. Vijay Rakesh – ThinkEquity: Hi, guys, just one other question. I see you’re short term deposits actually went up from 26% to 39% like you’ve said. Has the backlog gone up accordingly also? Are you seeing that? I mean, has that gone up also?

I think the numbers we see is it remains constant over the last few quarters. Vijay Rakesh – ThinkEquity: Got it. Okay. As we look at 2009, if you were to take a stab at what CapEx spending looks like for you guys. How does it look for next year?

For our cap expense? Vijay Rakesh – ThinkEquity: Yes.

Expires expense? Vijay Rakesh – ThinkEquity: Yes. I’m asking more like what is equivalent spending for the industry.

Oh for the industry? Vijay Rakesh – ThinkEquity: Yes. Well for 2008.

Well I think in terms of the markets that we’ve addressed and the customers that we’ve been successful with, we don’t – and the type of market, the new startup bids, diversifying companies or entrepreneurial. We see the entrepreneurial going down, the new entrants going up, our current customer base expanding somewhat. So all in all, we don’t see a whole lot of difference in the capital investment of those people. You see, of course, some of the other manufacturers, like the Chinese have (inaudible) way back, but they haven’t represented the big part of our activity anyway. So if that answers it. Vijay Rakesh – ThinkEquity: Sure. Because I’m just trying to bracket it versus when you look at the solar and the module shipments, and a lot of these – the (inaudible) guys are saying they’re still up significantly. But you’re saying it looks like it doesn’t matter, right? I mean, with your spending–?

Yes. Market is up, module, I mean, in terms of the ultimate product, the modules and the systems, we expect it next year, it’ll run from on the order of 15% to 20% growth in the overall worldwide market for (inaudible). And it’s a question of when the existing manufacturers choose to expand to address 2010. And I think, like everyone else, the days are a little bit gunshot. But I think everyone in the industry believes that, fundamentally, it is a growing industry. And there’s really no stopping it. So they’ll be there, maybe some pause on the part of next year. But then I think it will open up again. Vijay Rakesh – ThinkEquity: Got it. Okay. Thanks a lot, guys.

And there are no further questions at this time. I would now like to turn the call back to Roger Little for a final comment.

Thank you for listening to our call. We are pleased to have so many people pick it up on such short notice. And with that, I’ll end it. And thank you again.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. And you may now disconnect. Have a good day.