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      to Section 13 or 15(d) of the Securities Exchange Act of
      1934</strong></font></div>
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      of
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      April 5, 2006</strong></font></div>
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      ENERGY, INC.</strong></font></div>
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                Via De La Valle, Suite 200, Solana Beach, CA
                92075</strong></font></div>
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                Applicable</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
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      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div id="HDR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Entry
      into a Material Definitive Agreement.</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Sale
      of Secured Convertible Debentures and Common Stock Purchase
      Warrants</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Securities
      Purchase Agreement</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      On
      March 30, 2006, we entered into a securities purchase agreement with Cornell
      Capital Partners, LP, pursuant to which we agreed to issue and sell to Cornell
      up to an aggregate of $15,000,000 of secured convertible debentures and warrants
      to purchase up to an aggregate of 10,000,000 shares of common stock, subject
      to
      adjustment as discussed below. We plan to use the proceeds from the sale of
      these debentures and warrants for general corporate and working capital
      purposes, and in connection with our acquisitions of Solar Roofing Systems,
      Inc.
      and Connect Renewable Energy, Inc.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
      purchased $10,000,000 of the debentures on March 31, 2006, which we refer to
      as
      the first closing. Of the $10,000,000 purchase price, $5,000,000 was delivered
      directly to us and $5,000,000 was deposited into escrow. The funds deposited
      into escrow will be released to us on the date we file a registration statement
      with the SEC for the purpose of registering the resale of the shares of common
      stock underlying the debentures and the warrants. Cornell will purchase the
      remaining $5,000,000 of the debentures on the date such registration statement
      is declared effective by the SEC, which we refer to as the second
      closing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      agreed
      to pay to Yorkville Advisors, LLC, a fee of 8% of purchase price of the
      debentures at each closing. We also agreed to pay to Roth Capital Partners,
      LLC&#160;a fee of 2&#8532;% of the purchase price of the debentures at each closing,
      up to a maximum amount of $400,000. Pursuant to these arrangements, on March
      31,
      2006, we paid a cash fee of $400,000 to Yorkville and agreed to pay a deferred
      cash fee of $133,333 to Roth upon the release of $5,000,000 from the escrow
      described above. We also agreed to pay to Yorkville a structuring fee of $12,500
      and a due diligence fee of $5,000.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      purchase agreement contains the following covenants, among others:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
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            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Restrictions
                on Issuances of Capital Stock</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                We agreed not to take the following actions without the consent of
                Cornell, so long as any debentures are outstanding: (1) issue or
                sell
                shares of common stock or preferred stock for a consideration per
                share
                less than the "fixed conversion price" of the debentures (discussed
                below); (2) issue any preferred stock, warrant, option, right, contract,
                call or other security or instrument granting the right to acquire
                common
                stock for a consideration per share less than the fixed conversion
                price
                of the debentures; (3) enter into any security instrument granting
                the
                holder a security interest in any of our assets (except as permitted
                by
                the debentures), or (4) file any registration statement on Form S-8
                registering shares of common stock in excess of 15% of the outstanding
                shares of our common stock on March 30, 2006. Furthermore, so long
                as any
                debentures are outstanding, we agreed to issue no further shares
                under our
                2004 Consultant Compensation Plan. The foregoing restrictions do
                not apply
                to transactions related to the acquisitions of Solar Roofing Systems,
                Inc.
                and Connect Renewable Energy, Inc.</font></div>
            </td>
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            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Right
                of First Refusal</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                So long as any debentures are outstanding, if we intend to raise
                additional capital by the issuance or sale of our capital stock (including
                any class of common stock or preferred stock, options, warrants or
                any
                other securities convertible into or exercisable into shares of common
                stock), we will be obligated to offer such issuance or sale to Cornell
                prior to offering such issuance or sale to any third
                parties.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Secured
      Convertible Debentures</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      debentures include the following material terms:</font></div>
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    <div>
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            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Interest
                and Maturity</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                The debentures accrue interest at a rate of 5% per annum and mature
                on
                March 31, 2009. No payments of interest or principal are due under
                the
                debentures until maturity. </font></div>
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          </tr>

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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Conversion</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                The debentures are convertible at any time at the holder's option
                into
                shares of common stock by dividing (1) the outstanding amount of
                the
                debenture to be converted by (2) the conversion price. The conversion
                price will be equal to the lesser of (1) the fixed conversion price
                (initially $1.50) or (2) 95% of the lowest volume weighted average
                price
                of the common stock during the 30 trading days immediately preceding
                the
                conversion date. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Redemption</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                Upon three days notice, we may redeem a portion or all amounts owing
                under
                the debentures prior to the maturity date, so long as the closing
                bid
                price of our common stock is less than the fixed conversion price
                at the
                time of the redemption notice, by paying (1) the principal amount
                being
                redeemed, (2) a redemption premium equal to 20% of the principal
                amount
                being redeemed, plus (3) accrued and unpaid
                interest.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Anti-Dilution
                Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                At any time while the debentures are outstanding, if we or our
                subsidiaries issue shares of common stock or rights, warrants, options
                or
                other securities or debt convertible into or exchangeable for common
                stock, which we refer to as common stock equivalents, other than
                exempt
                issuances, at an effective price per share less than the fixed conversion
                price, then, at the option of the holder, the fixed conversion price
                will
                be adjusted to mirror the conversion, exchange or purchase price
                for such
                common stock or common stock
                equivalents.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Acceleration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                All amounts due under the debentures may become immediately due and
                payable upon the occurrence of an event of default set forth in the
                debentures, if not cured within the permitted time
                period.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Pledge
      and Escrow Agreement and Security Agreements</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      debentures are secured pursuant to the terms of (1) a pledge and escrow
      agreement among us, Cornell and David Gonzalez, Esq., as escrow agent, and
      (2)
      security agreements among us, Cornell and two of our wholly-owned subsidiaries
      formed for the purpose of acquiring Solar Roofing Systems, Inc. and Connect
      Renewable Energy,&#160;Inc. In accordance with the pledge and escrow agreement,
      we deposited 44,117,647 newly issued shares treasury shares into escrow, and
      granted to Cornell a security interest in these shares to secure our obligations
      to Cornell under the debentures and related agreements. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      security agreements, we and our subsidiaries granted to Cornell a blanket
      security interest in our assets and the assets of our subsidiaries, as
      applicable. In addition, we and our subsidiaries may not take any of the
      following actions, among others, without the prior written consent of Cornell:
      (1) incur any indebtedness, other than permitted indebtedness; (2) incur any
      liens or encumbrances, other than permitted liens; (3) become a party to any
      change of control transaction; (4) materially change our executive staff or
      management; or (5) declare or pay any dividend of any kind, in cash or in
      property, on any class of our capital stock, or repurchase for value any shares
      of our capital stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Common
      Stock Purchase Warrants</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Under
      the purchase agreement, we also agreed to issue to Cornell warrants to purchase
      up to an aggregate of 10,000,000 shares of common stock in accordance with
      the
      following schedule: (1) a warrant to purchase up to 3,500,000 shares of common
      stock was issued at the first closing; (2) a warrant to purchase up to 3,500,000
      shares of common stock was deposited into escrow at the first closing and will
      be released to Cornell on the date we file a registration statement with the
      SEC
      for the purpose of registering the resale of the shares of common stock
      underlying the debentures and the warrants; and (3) a warrant to purchase up
      to
      3,000,000 shares of common stock will be issued at the second closing.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-3-</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      warrants have an initial exercise price of $1.50 and a term of five years.
      The
      warrants include a &#8220;cashless exercise&#8221; right, which permits the warrant to be
      converted, in lieu of cash exercise, into a number of shares of common stock
      determined by multiplying (1) the number of shares purchasable under the warrant
      by (2) the difference between the closing bid price of the common stock on
      the
      date of conversion and the warrant exercise price, and dividing such product
      by
      (3) the closing bid price of the common stock on the date of conversion. The
      cashless exercise right is available only if the shares subject to the warrant
      are not included in an effective registration statement covering their resale,
      or if an event of default has occurred under the debentures and is not cured
      within the permitted time period. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      we
      issue or sell, or are deemed to have issued or sold, any shares of common stock,
      other than excluded securities, for a consideration per share less than $1.50,
      then, immediately after such issuance or sale, the warrant exercise price then
      in effect will be reduced to an amount equal to such consideration per share.
      Upon each such adjustment of the warrant exercise price, the number of shares
      issuable upon the exercise of the warrants will be adjusted to the number of
      shares determined by multiplying (1) the warrant exercise price in effect
      immediately prior to such adjustment by (2) the number of shares issuable upon
      exercise of the warrants immediately prior to such adjustment, and dividing
      such
      product by (3) the warrant exercise price resulting from such
      adjustment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Investor
      Registration Rights Agreement</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Pursuant to an investor registration rights agreement signed in connection
      with
      the purchase agreement, we agreed to file with the SEC by May 15, 2006, which
      date we refer to as the filing date, a registration statement including the
      shares underlying the debentures and warrants, and to have such registration
      statement declared effective by July 29, 2006, which date we refer to as the
      effectiveness date. If such registration statement is not filed by the filing
      date or declared effective by the effectiveness date, as applicable, we will
      become obligated to pay to Cornell, either in cash or in shares of common stock,
      liquidated damages equal to 1% of the liquidated value of the debentures
      outstanding for each 30 day period (pro-rated for partial periods) that the
      registration statement is not filed or declared effective, as applicable. We
      are
      obligated to keep the registration statement effective until all the shares
      have
      been sold or are eligible for sale without volume restrictions pursuant to
      SEC
      Rule 144(k).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Exhibits</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Complete copies of the securities purchase agreement, the investor registration
      rights agreement, the form of secured convertible debenture, the form of common
      stock purchase warrant, the pledge and escrow agreement and the security
      agreement between us and Cornell are filed as Exhibits 99.1, 99.2, 99.3, 99.4,
      99.5 and 99.6 to this report, respectively, and are incorporated herein by
      reference. The security agreement between Cornell and 2093603 Ontario Inc.,
      a
      wholly-owned subsidiary created to acquire Solar Roofing Systems, Inc. is
      attached as Exhibit 99.7 to this report and incorporated herein by reference,
      and the security agreement between Cornell and Barnabus/CRE Acquisition
      Corporation, a wholly-owned subsidiary created to acquire Connect Renewable
      Energy, Inc., is attached as Exhibit 99.8 to this report and incorporated herein
      by reference. The summary of the transactions set forth above does not purport
      to be complete and is qualified in its entirety by reference to these
      exhibits.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Amendment
      of 0% Subordinated Mandatory Convertible Debentures and Common Stock Purchase
      Warrants</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      previously disclosed in current reports on Form 8-K filed on February 28, 2006
      and March 20, 2006, we issued and sold to certain accredited investors 0%
      subordinated mandatory convertible debentures in the aggregate principal amount
      of $5,250,000, and common stock purchase warrants to purchase up to an aggregate
      of 2,354,261 shares of common stock. The sales of these securities occurred
      in
      February and March of 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of
      March 30, 2006, we amended and restated these debentures and warrants to
      indicate that the anti-dilution adjustments set forth therein will occur only
      upon a future exercise or conversion of a convertible security, rather than
      upon
      the issuance of a convertible security, and will be calculated based upon the
      actual price used for the exercise or conversion. Accordingly, there will be
      no
      initial adjustment of the conversion price of the debentures or the exercise
      price of the warrants upon original issuance of the debentures and warrant
      sold
      to Cornell described above.</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-4-</font></div>
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        </div>
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      <div id="HDR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing description is qualified in its entirety by reference to the form
      of
      the amended and restated debentures and warrants which are attached to this
      report as Exhibits 99.9 and 99.10 and incorporated herein by
      reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Amended
      and Restated Technology License Agreement </em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      17, 2006, we entered into an amended and restated technology license agreement
      with Dr.&#160;Melvin R. Prueitt, whom we refer to as the licensor, pursuant to
      which we have agreed to license from the licensor certain patent rights and
      technology which we refer to as Suncone<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8482; CSP (Concentrated
      Solar
      Power)</font>. Suncone&#8482;&#160; CSP relates to the collection of solar energy
      using a novel method of non-imaging optics, a process which provides an
      economical method of collecting thermal power for the production of electricity.
      The license is exclusive and worldwide for the defined field of use of
      collecting solar energy to generate electricity, desalinate water and for all
      other industrial applications. The license agreement expires at the earlier
      of
      January 27, 2026 or the date of expiration of the last to expire of any issued
      patent within the patent rights subject to the license agreement.&#160; We also
      agreed to fund a six month development project to develop a working prototype
      of
      a solar collector (which may be branded using a "Suncone&#8482; CSP" mark) and expend
      or devote resources equal to at least $300,000 during such time
      period.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      consideration of the license, we have agreed to pay to the licensor certain
      royalties for sales of products incorporating the licensed technology, which
      we
      refer to as "licensed products." The subset of licensed products that consists
      of generated electrical power or desalinated water or other pumped liquids
      that
      are generated or purified, as applicable, using any product or device which,
      or
      the manufacture, use or sale of which, is covered by a valid claim of the
      licensed patent rights is referred to as "licensed commodity products." The
      royalty payments for licensed products and the subset of licensed commodity
      products are as follows: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                will pay to the licensor a royalty&#160;of&#160;2% of net sales of
                licensed commodity products.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                will pay to the licensor the following royalties for sales of licensed
                products (other than licensed commodity products) for each three
                month
                period commencing October 21, 2005, each of which periods we refer
                to as a
                royalty period: 8% of net sales up to $500,000; 7% of net sales up
                to
                $1,000,000; 6% of net sales up to $1,500,000; and 5% of net sales
                over
                $1,500,000.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                have agreed to pay minimum royalties during each royalty period as
                specified in the license agreement.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                also have a right to sublicense the licensed technology as provided
                in the
                license agreement.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, we granted to the licensor 100,000 shares of common stock and a
      warrant to purchase up to 2,233,438 shares of common stock. The warrant has
      an
      initial exercise price of $1.50 and a term of five years. The warrant vests
      incrementally upon the completion of certain milestones specified in the
      warrant. The warrant includes a &#8220;net exercise&#8221; right, which permits the vested
      portion of the warrant to be converted at any time, in lieu of cash exercise,
      into a number of shares of common stock determined by multiplying (1) the number
      of shares purchasable under the warrant by (2) the difference between the fair
      market value of the common stock on the date of conversion and the warrant
      exercise price, and dividing such product by (3) the fair market value of the
      common stock on the date of conversion. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      we
      issue any shares of common stock (or are deemed to have issued shares of common
      stock, as provided in the warrant), other than excluded stock, without
      consideration or at a consideration per share less than the exercise price
      in
      effect immediately before the issuance of such common stock, then the exercise
      price of the warrant will immediately be reduced to the quotient of (1) the
      sum
      of (A) the total number of shares of common stock deemed outstanding immediately
      prior to such issuance, multiplied by the exercise price in effect immediately
      before such issuance, and (B) the consideration received by us for such
      issuance, divided by (2) the total number of shares of common stock deemed
      outstanding immediately after the issuance of such common stock. Whenever the
      exercise price is adjusted as provided above, the number of shares subject
      to
      the warrant will be multiplied by a fraction, the numerator of which is the
      exercise price immediately before such adjustment and the denominator of which
      is the exercise price immediately after such adjustment. No adjustment will
      be
      made to the exercise price of the warrant in connection with the securities
      sold
      to Cornell.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing descriptions are qualified in their entirety by reference to the
      amended and restated technology license agreement (which includes the form
      of
      warrant) which is attached to this report as Exhibit 99.11 and incorporated
      herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-5-</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      2.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Completion
      of Acquisition or Disposition of Assets</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      30, 2006, we completed the previously announced merger of Barnabus/CRE
      Acquisition Corporation, our wholly-owned subsidiary, with and into Connect
      Renewable Energy, Inc., or CRE, pursuant to the terms of the Agreement and
      Plan
      of Merger dated February&#160;8, 2006 among us, CRE and certain other parties,
      which we refer to as the merger agreement. As a result of the merger, CRE became
      our wholly-owned subsidiary. Ron Gangemi, a director of our company, was the
      President and Chief Executive Officer of CRE before the merger.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the merger agreement, all of the outstanding shares of common stock of CRE
      were converted into the right to receive an aggregate of 5,000,000 shares of
      our
      common stock, which shares were valued under the merger agreement at $2.00
      per
      share. No options, warrants or other rights to purchase the common stock of
      CRE
      were outstanding at the closing. Before the closing, we also loaned to CRE
      an
      aggregate of $1,410,000 for working capital purposes.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the closing, we entered into a consulting agreement with Connect
      by Computer, LLC, an entity affiliated with Mr. Gangemi, pursuant to which
      Mr.
      Gangemi has agreed to provide consulting services to us in the capacity of
      chief
      technology officer and a director&#160;for a period of three years. In
      consideration of such services, we agreed to pay $16,000 per month for each
      full
      month of services rendered. We also agreed to grant to Connect by Computer,
      LLC,
      1,000,000 shares of our common stock effective as of the date of the merger
      (which shares we are required to register for resale on our
      next&#160;registration statement)&#160;and 2,000,000 additional shares of our
      common stock subject to the achievement by CRE of certain net sales targets
      following the merger.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing descriptions are qualified in their entirety by reference to the
      merger agreement and the consulting agreement which are filed as Exhibits 10.9
      and 10.10 to the Form&#160;8-K filed on February 15, 2006 and are incorporated
      herein by reference. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      2.03</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
      Arrangement of a Registrant</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      30, 2006, we agreed to issue to Cornell Capital Partners, LP, secured
      convertible debentures in the aggregate original principal amount of up to
      $15,000,000. See Item 1.01 of this report for more information about these
      debentures.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      3.02</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Unregistered
      Sale of Equity Securities</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      30, 2006, we agreed to sell to Cornell Capital Partners, LP, up to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
      aggregate of $15,000,000 of secured convertible debentures and warrants to
      purchase up to an aggregate of 10,000,000 shares of common stock, as discussed
      more fully in Item 1.01 of this report.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      We
      offered and sold the debentures and warrants without registration under the
      Securities Act of 1933 to an accredited investor in reliance upon the exemption
      provided by Rule 506 of Regulation D thereunder.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with an amended and restated technology license agreement dated
      March
      17, 2006, we agreed to sell to Dr. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Melvin
      R.
      Prueitt 100,000 shares of common stock and a warrant to purchase up to 2,233,438
      shares of common stock, as discussed more fully in Item 1.01 of this report.
      We
      offered and sold the shares and the warrant without registration under the
      Securities Act of 1933 to an accredited investor in reliance upon the exemption
      provided by Rule 506 of Regulation D thereunder.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None
      of
      the aforementioned shares of common stock, debentures, warrants or shares of
      common stock which may be issued upon the conversion of the debentures or upon
      exercise of the warrants, may be offered or sold in the United States in the
      absence of an effective registration statement or exemption from the
      registration requirements under the Securities Act. An appropriate legend was
      placed on the shares of common stock, the debentures and the warrants, and
      will
      be placed on the shares of common stock issued upon any conversion of the
      debentures or upon any exercise of the warrants, unless registered under the
      Securities Act prior to issuance.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      current report on Form 8-K is neither an offer to sell nor a solicitation of
      an
      offer to buy any of these securities. The disclosures in Item 1.01 and Item
      3.02
      of this report are being filed pursuant to and in accordance with Rule 135
      under
      the Securities Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-6-</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      3.03</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Material
      Modifications to Rights of Security Holders</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      security agreement dated March 31, 2006 between us and Cornell Capital Partners,
      LP, we may not </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">declare
      or pay any dividend of any kind, in cash or in property, on any class of our
      capital stock, or repurchase for value any shares of our capital stock, without
      the prior written consent of Cornell. See Item 1.01 of this report for more
      information about this security agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      9.01.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Financial
      Statements and Exhibits</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;"><font size="2">(a)</font></td>
            <td align="left" style="width: 9pt;">
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
                Information of Businesses Acquired.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      financial statements required by this report will be filed by amendment not
      later than 71 days calendar after the date this report is required to be
      filed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;"><font size="2">(b)</font></td>
            <td align="left" style="width: 9pt;">&#160;</td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pro
                Forma Financial Information.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      financial statements required by this report will be filed by amendment not
      later than 71 days calendar after the date this report is required to be
      filed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="12%" style="border-bottom: medium none;">
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                  Cornell Capital Partners, LP</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report on Form 8-K to be signed on its behalf by the
      undersigned hereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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    <div align="left">
      <table border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                ENERGY, INC.</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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          <tr>
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            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                April 5, 2006</font></div>
            </td>
            <td align="justify" valign="top" width="6%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                David Saltman</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
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            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">David
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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            </td>
          </tr>

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{"company-data": {"conformed-name": "BARNABUS ENERGY, INC.", "cik": "0001176193", "assigned-sic": "1311", "irs-number": "980370750", "state-of-incorporation": "NV", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-50450", "film-number": "06741813"}, "business-address": {"street1": "674 GRANVILLE STREET", "street2": "PO BOX 54037", "city": "VANCOUVER", "state": "A1", "zip": "V6C 3P4", "phone": "604.657.2246"}, "mail-address": {"street1": "674 GRANVILLE STREET", "street2": "PO BOX 54037", "city": "VANCOUVER", "state": "A1", "zip": "V6C 3P4"}, "former-company": {"former-conformed-name": "BARNABUS ENTERPRISES LTD", "date-changed": "20020621"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
WASHINGTON,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
Pursuant
      to Section 13 or 15(d) of the Securities Exchange Act of
      1934
Date
      of
      Report :
April 5, 2006
BARNABUS
      ENERGY, INC.
(Exact
      name of registrant as specified in its charter)
Nevada
000-50450
98-0370750
(State
                or other jurisdiction
of
                incorporation)
(Commission
File
                Number)
(I.R.S.
                Employer
Identification
                No.)
514
                Via De La Valle, Suite 200, Solana Beach, CA
                92075
(Address
                of principal executive offices, including zip code)
(858)-794-8800
(Registrant's
                telephone number, including area code)
Not
                Applicable
(Former
                name or former address, if changed since last
                report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
o
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
-1-
Item
      1.01.
Entry
      into a Material Definitive Agreement.
Sale
      of Secured Convertible Debentures and Common Stock Purchase
      Warrants
Securities
      Purchase Agreement
.
      On
      March 30, 2006, we entered into a securities purchase agreement with Cornell
      Capital Partners, LP, pursuant to which we agreed to issue and sell to Cornell
      up to an aggregate of $15,000,000 of secured convertible debentures and warrants
      to purchase up to an aggregate of 10,000,000 shares of common stock, subject
      to
      adjustment as discussed below. We plan to use the proceeds from the sale of
      these debentures and warrants for general corporate and working capital
      purposes, and in connection with our acquisitions of Solar Roofing Systems,
      Inc.
      and Connect Renewable Energy, Inc.
Cornell
      purchased $10,000,000 of the debentures on March 31, 2006, which we refer to
      as
      the first closing. Of the $10,000,000 purchase price, $5,000,000 was delivered
      directly to us and $5,000,000 was deposited into escrow. The funds deposited
      into escrow will be released to us on the date we file a registration statement
      with the SEC for the purpose of registering the resale of the shares of common
      stock underlying the debentures and the warrants. Cornell will purchase the
      remaining $5,000,000 of the debentures on the date such registration statement
      is declared effective by the SEC, which we refer to as the second
      closing.
We
      agreed
      to pay to Yorkville Advisors, LLC, a fee of 8% of purchase price of the
      debentures at each closing. We also agreed to pay to Roth Capital Partners,
      LLC a fee of 2⅔% of the purchase price of the debentures at each closing,
      up to a maximum amount of $400,000. Pursuant to these arrangements, on March
      31,
      2006, we paid a cash fee of $400,000 to Yorkville and agreed to pay a deferred
      cash fee of $133,333 to Roth upon the release of $5,000,000 from the escrow
      described above. We also agreed to pay to Yorkville a structuring fee of $12,500
      and a due diligence fee of $5,000.
The
      purchase agreement contains the following covenants, among others:
·
Restrictions
                on Issuances of Capital Stock
.
                We agreed not to take the following actions without the consent of
                Cornell, so long as any debentures are outstanding: (1) issue or
                sell
                shares of common stock or preferred stock for a consideration per
                share
                less than the "fixed conversion price" of the debentures (discussed
                below); (2) issue any preferred stock, warrant, option, right, contract,
                call or other security or instrument granting the right to acquire
                common
                stock for a consideration per share less than the fixed conversion
                price
                of the debentures; (3) enter into any security instrument granting
                the
                holder a security interest in any of our assets (except as permitted
                by
                the debentures), or (4) file any registration statement on Form S-8
                registering shares of common stock in excess of 15% of the outstanding
                shares of our common stock on March 30, 2006. Furthermore, so long
                as any
                debentures are outstanding, we agreed to issue no further shares
                under our
                2004 Consultant Compensation Plan. The foregoing restrictions do
                not apply
                to transactions related to the acquisitions of Solar Roofing Systems,
                Inc.
                and Connect Renewable Energy, Inc.
·
Right
                of First Refusal
.
                So long as any debentures are outstanding, if we intend to raise
                additional capital by the issuance or sale of our capital stock (including
                any class of common stock or preferred stock, options, warrants or
                any
                other securities convertible into or exercisable into shares of common
                stock), we will be obligated to offer such issuance or sale to Cornell
                prior to offering such issuance or sale to any third
                parties.
Secured
      Convertible Debentures
.
      The
      debentures include the following material terms:
·
Interest
                and Maturity
.
                The debentures accrue interest at a rate of 5% per annum and mature
                on
                March 31, 2009. No payments of interest or principal are due under
                the
                debentures until maturity.
·
Conversion
.
                The debentures are convertible at any time at the holder's option
                into
                shares of common stock by dividing (1) the outstanding amount of
                the
                debenture to be converted by (2) the conversion price. The conversion
                price will be equal to the lesser of (1) the fixed conversion price
                (initially $1.50) or (2) 95% of the lowest volume weighted average
                price
                of the common stock during the 30 trading days immediately preceding
                the
                conversion date.
-2-
·
Redemption
.
                Upon three days notice, we may redeem a portion or all amounts owing
                under
                the debentures prior to the maturity date, so long as the closing
                bid
                price of our common stock is less than the fixed conversion price
                at the
                time of the redemption notice, by paying (1) the principal amount
                being
                redeemed, (2) a redemption premium equal to 20% of the principal
                amount
                being redeemed, plus (3) accrued and unpaid
                interest.
·
Anti-Dilution
                Rights
.
                At any time while the debentures are outstanding, if we or our
                subsidiaries issue shares of common stock or rights, warrants, options
                or
                other securities or debt convertible into or exchangeable for common
                stock, which we refer to as common stock equivalents, other than
                exempt
                issuances, at an effective price per share less than the fixed conversion
                price, then, at the option of the holder, the fixed conversion price
                will
                be adjusted to mirror the conversion, exchange or purchase price
                for such
                common stock or common stock
                equivalents.
·
Acceleration
.
                All amounts due under the debentures may become immediately due and
                payable upon the occurrence of an event of default set forth in the
                debentures, if not cured within the permitted time
                period.
Pledge
      and Escrow Agreement and Security Agreements
.
      The
      debentures are secured pursuant to the terms of (1) a pledge and escrow
      agreement among us, Cornell and David Gonzalez, Esq., as escrow agent, and
      (2)
      security agreements among us, Cornell and two of our wholly-owned subsidiaries
      formed for the purpose of acquiring Solar Roofing Systems, Inc. and Connect
      Renewable Energy, Inc. In accordance with the pledge and escrow agreement,
      we deposited 44,117,647 newly issued shares treasury shares into escrow, and
      granted to Cornell a security interest in these shares to secure our obligations
      to Cornell under the debentures and related agreements.
Under
      the
      security agreements, we and our subsidiaries granted to Cornell a blanket
      security interest in our assets and the assets of our subsidiaries, as
      applicable. In addition, we and our subsidiaries may not take any of the
      following actions, among others, without the prior written consent of Cornell:
      (1) incur any indebtedness, other than permitted indebtedness; (2) incur any
      liens or encumbrances, other than permitted liens; (3) become a party to any
      change of control transaction; (4) materially change our executive staff or
      management; or (5) declare or pay any dividend of any kind, in cash or in
      property, on any class of our capital stock, or repurchase for value any shares
      of our capital stock.
Common
      Stock Purchase Warrants
.
      Under
      the purchase agreement, we also agreed to issue to Cornell warrants to purchase
      up to an aggregate of 10,000,000 shares of common stock in accordance with
      the
      following schedule: (1) a warrant to purchase up to 3,500,000 shares of common
      stock was issued at the first closing; (2) a warrant to purchase up to 3,500,000
      shares of common stock was deposited into escrow at the first closing and will
      be released to Cornell on the date we file a registration statement with the
      SEC
      for the purpose of registering the resale of the shares of common stock
      underlying the debentures and the warrants; and (3) a warrant to purchase up
      to
      3,000,000 shares of common stock will be issued at the second closing.
-3-
The
      warrants have an initial exercise price of $1.50 and a term of five years.
      The
      warrants include a "cashless exercise" right, which permits the warrant to be
      converted, in lieu of cash exercise, into a number of shares of common stock
      determined by multiplying (1) the number of shares purchasable under the warrant
      by (2) the difference between the closing bid price of the common stock on
      the
      date of conversion and the warrant exercise price, and dividing such product
      by
      (3) the closing bid price of the common stock on the date of conversion. The
      cashless exercise right is available only if the shares subject to the warrant
      are not included in an effective registration statement covering their resale,
      or if an event of default has occurred under the debentures and is not cured
      within the permitted time period.
If
      we
      issue or sell, or are deemed to have issued or sold, any shares of common stock,
      other than excluded securities, for a consideration per share less than $1.50,
      then, immediately after such issuance or sale, the warrant exercise price then
      in effect will be reduced to an amount equal to such consideration per share.
      Upon each such adjustment of the warrant exercise price, the number of shares
      issuable upon the exercise of the warrants will be adjusted to the number of
      shares determined by multiplying (1) the warrant exercise price in effect
      immediately prior to such adjustment by (2) the number of shares issuable upon
      exercise of the warrants immediately prior to such adjustment, and dividing
      such
      product by (3) the warrant exercise price resulting from such
      adjustment.
Investor
      Registration Rights Agreement
.
      Pursuant to an investor registration rights agreement signed in connection
      with
      the purchase agreement, we agreed to file with the SEC by May 15, 2006, which
      date we refer to as the filing date, a registration statement including the
      shares underlying the debentures and warrants, and to have such registration
      statement declared effective by July 29, 2006, which date we refer to as the
      effectiveness date. If such registration statement is not filed by the filing
      date or declared effective by the effectiveness date, as applicable, we will
      become obligated to pay to Cornell, either in cash or in shares of common stock,
      liquidated damages equal to 1% of the liquidated value of the debentures
      outstanding for each 30 day period (pro-rated for partial periods) that the
      registration statement is not filed or declared effective, as applicable. We
      are
      obligated to keep the registration statement effective until all the shares
      have
      been sold or are eligible for sale without volume restrictions pursuant to
      SEC
      Rule 144(k).
Exhibits
.
      Complete copies of the securities purchase agreement, the investor registration
      rights agreement, the form of secured convertible debenture, the form of common
      stock purchase warrant, the pledge and escrow agreement and the security
      agreement between us and Cornell are filed as Exhibits 99.1, 99.2, 99.3, 99.4,
      99.5 and 99.6 to this report, respectively, and are incorporated herein by
      reference. The security agreement between Cornell and 2093603 Ontario Inc.,
      a
      wholly-owned subsidiary created to acquire Solar Roofing Systems, Inc. is
      attached as Exhibit 99.7 to this report and incorporated herein by reference,
      and the security agreement between Cornell and Barnabus/CRE Acquisition
      Corporation, a wholly-owned subsidiary created to acquire Connect Renewable
      Energy, Inc., is attached as Exhibit 99.8 to this report and incorporated herein
      by reference. The summary of the transactions set forth above does not purport
      to be complete and is qualified in its entirety by reference to these
      exhibits.
Amendment
      of 0% Subordinated Mandatory Convertible Debentures and Common Stock Purchase
      Warrants
As
      previously disclosed in current reports on Form 8-K filed on February 28, 2006
      and March 20, 2006, we issued and sold to certain accredited investors 0%
      subordinated mandatory convertible debentures in the aggregate principal amount
      of $5,250,000, and common stock purchase warrants to purchase up to an aggregate
      of 2,354,261 shares of common stock. The sales of these securities occurred
      in
      February and March of 2006.
As
      of
      March 30, 2006, we amended and restated these debentures and warrants to
      indicate that the anti-dilution adjustments set forth therein will occur only
      upon a future exercise or conversion of a convertible security, rather than
      upon
      the issuance of a convertible security, and will be calculated based upon the
      actual price used for the exercise or conversion. Accordingly, there will be
      no
      initial adjustment of the conversion price of the debentures or the exercise
      price of the warrants upon original issuance of the debentures and warrant
      sold
      to Cornell described above.
-4-
The
      foregoing description is qualified in its entirety by reference to the form
      of
      the amended and restated debentures and warrants which are attached to this
      report as Exhibits 99.9 and 99.10 and incorporated herein by
      reference.
Amended
      and Restated Technology License Agreement
On
      March
      17, 2006, we entered into an amended and restated technology license agreement
      with Dr. Melvin R. Prueitt, whom we refer to as the licensor, pursuant to
      which we have agreed to license from the licensor certain patent rights and
      technology which we refer to as Suncone
™ CSP (Concentrated
      Solar
      Power)
. Suncone™  CSP relates to the collection of solar energy
      using a novel method of non-imaging optics, a process which provides an
      economical method of collecting thermal power for the production of electricity.
      The license is exclusive and worldwide for the defined field of use of
      collecting solar energy to generate electricity, desalinate water and for all
      other industrial applications. The license agreement expires at the earlier
      of
      January 27, 2026 or the date of expiration of the last to expire of any issued
      patent within the patent rights subject to the license agreement.  We also
      agreed to fund a six month development project to develop a working prototype
      of
      a solar collector (which may be branded using a "Suncone™ CSP" mark) and expend
      or devote resources equal to at least $300,000 during such time
      period.
In
      consideration of the license, we have agreed to pay to the licensor certain
      royalties for sales of products incorporating the licensed technology, which
      we
      refer to as "licensed products." The subset of licensed products that consists
      of generated electrical power or desalinated water or other pumped liquids
      that
      are generated or purified, as applicable, using any product or device which,
      or
      the manufacture, use or sale of which, is covered by a valid claim of the
      licensed patent rights is referred to as "licensed commodity products." The
      royalty payments for licensed products and the subset of licensed commodity
      products are as follows:
·
We
                will pay to the licensor a royalty of 2% of net sales of
                licensed commodity products.
·
We
                will pay to the licensor the following royalties for sales of licensed
                products (other than licensed commodity products) for each three
                month
                period commencing October 21, 2005, each of which periods we refer
                to as a
                royalty period: 8% of net sales up to $500,000; 7% of net sales up
                to
                $1,000,000; 6% of net sales up to $1,500,000; and 5% of net sales
                over
                $1,500,000.
·
We
                have agreed to pay minimum royalties during each royalty period as
                specified in the license agreement.
·
We
                also have a right to sublicense the licensed technology as provided
                in the
                license agreement.
In
      addition, we granted to the licensor 100,000 shares of common stock and a
      warrant to purchase up to 2,233,438 shares of common stock. The warrant has
      an
      initial exercise price of $1.50 and a term of five years. The warrant vests
      incrementally upon the completion of certain milestones specified in the
      warrant. The warrant includes a "net exercise" right, which permits the vested
      portion of the warrant to be converted at any time, in lieu of cash exercise,
      into a number of shares of common stock determined by multiplying (1) the number
      of shares purchasable under the warrant by (2) the difference between the fair
      market value of the common stock on the date of conversion and the warrant
      exercise price, and dividing such product by (3) the fair market value of the
      common stock on the date of conversion.
If
      we
      issue any shares of common stock (or are deemed to have issued shares of common
      stock, as provided in the warrant), other than excluded stock, without
      consideration or at a consideration per share less than the exercise price
      in
      effect immediately before the issuance of such common stock, then the exercise
      price of the warrant will immediately be reduced to the quotient of (1) the
      sum
      of (A) the total number of shares of common stock deemed outstanding immediately
      prior to such issuance, multiplied by the exercise price in effect immediately
      before such issuance, and (B) the consideration received by us for such
      issuance, divided by (2) the total number of shares of common stock deemed
      outstanding immediately after the issuance of such common stock. Whenever the
      exercise price is adjusted as provided above, the number of shares subject
      to
      the warrant will be multiplied by a fraction, the numerator of which is the
      exercise price immediately before such adjustment and the denominator of which
      is the exercise price immediately after such adjustment. No adjustment will
      be
      made to the exercise price of the warrant in connection with the securities
      sold
      to Cornell.
The
      foregoing descriptions are qualified in their entirety by reference to the
      amended and restated technology license agreement (which includes the form
      of
      warrant) which is attached to this report as Exhibit 99.11 and incorporated
      herein by reference.
-5-
Item
      2.01
Completion
      of Acquisition or Disposition of Assets
.
On
      March
      30, 2006, we completed the previously announced merger of Barnabus/CRE
      Acquisition Corporation, our wholly-owned subsidiary, with and into Connect
      Renewable Energy, Inc., or CRE, pursuant to the terms of the Agreement and
      Plan
      of Merger dated February 8, 2006 among us, CRE and certain other parties,
      which we refer to as the merger agreement. As a result of the merger, CRE became
      our wholly-owned subsidiary. Ron Gangemi, a director of our company, was the
      President and Chief Executive Officer of CRE before the merger.
Pursuant
      to the merger agreement, all of the outstanding shares of common stock of CRE
      were converted into the right to receive an aggregate of 5,000,000 shares of
      our
      common stock, which shares were valued under the merger agreement at $2.00
      per
      share. No options, warrants or other rights to purchase the common stock of
      CRE
      were outstanding at the closing. Before the closing, we also loaned to CRE
      an
      aggregate of $1,410,000 for working capital purposes.
In
      connection with the closing, we entered into a consulting agreement with Connect
      by Computer, LLC, an entity affiliated with Mr. Gangemi, pursuant to which
      Mr.
      Gangemi has agreed to provide consulting services to us in the capacity of
      chief
      technology officer and a director for a period of three years. In
      consideration of such services, we agreed to pay $16,000 per month for each
      full
      month of services rendered. We also agreed to grant to Connect by Computer,
      LLC,
      1,000,000 shares of our common stock effective as of the date of the merger
      (which shares we are required to register for resale on our
      next registration statement) and 2,000,000 additional shares of our
      common stock subject to the achievement by CRE of certain net sales targets
      following the merger.
The
      foregoing descriptions are qualified in their entirety by reference to the
      merger agreement and the consulting agreement which are filed as Exhibits 10.9
      and 10.10 to the Form 8-K filed on February 15, 2006 and are incorporated
      herein by reference.
Item
      2.03
Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
      Arrangement of a Registrant
.
On
      March
      30, 2006, we agreed to issue to Cornell Capital Partners, LP, secured
      convertible debentures in the aggregate original principal amount of up to
      $15,000,000. See Item 1.01 of this report for more information about these
      debentures.
Item
      3.02
Unregistered
      Sale of Equity Securities
.
On
      March
      30, 2006, we agreed to sell to Cornell Capital Partners, LP, up to
an
      aggregate of $15,000,000 of secured convertible debentures and warrants to
      purchase up to an aggregate of 10,000,000 shares of common stock, as discussed
      more fully in Item 1.01 of this report.
We
      offered and sold the debentures and warrants without registration under the
      Securities Act of 1933 to an accredited investor in reliance upon the exemption
      provided by Rule 506 of Regulation D thereunder.
In
      connection with an amended and restated technology license agreement dated
      March
      17, 2006, we agreed to sell to Dr.
Melvin
      R.
      Prueitt 100,000 shares of common stock and a warrant to purchase up to 2,233,438
      shares of common stock, as discussed more fully in Item 1.01 of this report.
      We
      offered and sold the shares and the warrant without registration under the
      Securities Act of 1933 to an accredited investor in reliance upon the exemption
      provided by Rule 506 of Regulation D thereunder.
None
      of
      the aforementioned shares of common stock, debentures, warrants or shares of
      common stock which may be issued upon the conversion of the debentures or upon
      exercise of the warrants, may be offered or sold in the United States in the
      absence of an effective registration statement or exemption from the
      registration requirements under the Securities Act. An appropriate legend was
      placed on the shares of common stock, the debentures and the warrants, and
      will
      be placed on the shares of common stock issued upon any conversion of the
      debentures or upon any exercise of the warrants, unless registered under the
      Securities Act prior to issuance.
This
      current report on Form 8-K is neither an offer to sell nor a solicitation of
      an
      offer to buy any of these securities. The disclosures in Item 1.01 and Item
      3.02
      of this report are being filed pursuant to and in accordance with Rule 135
      under
      the Securities Act.
-6-
Item
      3.03
Material
      Modifications to Rights of Security Holders
.
Under
      the
      security agreement dated March 31, 2006 between us and Cornell Capital Partners,
      LP, we may not
declare
      or pay any dividend of any kind, in cash or in property, on any class of our
      capital stock, or repurchase for value any shares of our capital stock, without
      the prior written consent of Cornell. See Item 1.01 of this report for more
      information about this security agreement.
Item
      9.01.
Financial
      Statements and Exhibits
.
(a)
Financial
                Information of Businesses Acquired.
The
      financial statements required by this report will be filed by amendment not
      later than 71 days calendar after the date this report is required to be
      filed.
(b)
Pro
                Forma Financial Information.
The
      financial statements required by this report will be filed by amendment not
      later than 71 days calendar after the date this report is required to be
      filed.
(c)
Exhibits.
Exhibit
                  No.
Description
99.1
Securities
                  Purchase Agreement dated March 30, 2006 with Cornell Capital Partners,
                  LP
99.2
Investor
                  Registration Rights Agreement dated March 31, 2006 with Cornell
                  Capital
                  Partners, LP
99.3
Form
                  of Secured Convertible Debenture issued in favor of Cornell Capital
                  Partners, LP
99.4
Form
                  of Common Stock Purchase Warrant issued in favor of Cornell Capital
                  Partners, LP
99.5
Pledge
                  and Escrow Agreement dated March 31, 2006 with Cornell Capital
                  Partners,
                  LP
99.6
Security
                  Agreement dated March 31, 2006 with Cornell Capital Partners,
                  LP
99.7
Security
                  Agreement dated March 31, 2006 between
2093603
                  Ontario Inc. and
Cornell Capital Partners, LP
99.8
Security
                  Agreement dated March 31, 2006 between Barnabus/CRE Acquisition
                  Corporation and Cornell Capital Partners, LP
99.9
Form
                  of Amended and Restated 0% Subordinated Mandatory Convertible Debenture
99.10
Form
                  of Amended and Restated Common Stock Purchase Warrant
99.11
Amended
                  and Restated Technology License Agreement dated March 17, 2006
                  with
                  Dr. Melvin R. Prueitt
-7-
SIGNATURE
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report on Form 8-K to be signed on its behalf by the
      undersigned hereunto duly authorized.
BARNABUS
                ENERGY, INC.
Date:
                April 5, 2006
/s/
                David Saltman
By:
David
                Saltman
President
                and Chief Executive Officer
-8-