Exposure to Lawsuits

Exposure to lawsuits

Potential customers may rely upon SIT’s products for critical energy needs. A malfunction or the

inadequate design of the Company’s products could result in tort or warranty claims. Although SIT

generally will seek to reduce the risk of any claims by methods including insurance, warranty

disclaimers and liability limitation clauses in the Company’s commercial agreements,SIT cannot assure

investors that its efforts will effectively limit the Company’s liability.

Under certain existing contracts with its customers, SIT has not included any warranty disclaimers or

liability limitation clauses. Although these contracts are few in number it is not likely that SIT will be

able to effectively limit its liability in relation to them other than by obtaining insurance in relation to

its exposure under such contracts. There can be no guarantee that SIT will be able to obtain such

insurance. However, the Directors believe that the risk of warranty claims being made in relation to

such contracts is minimal due to the established quality and reliability of the underlying roofing and

photovoltaic components, as well as the reliability of the manufacturing process and adhesives which

SIT employs.

Dependence on third party suppliers

SIT relies on a small number of critical third party suppliers. If the Company fails to develop or

maintain its relationships with these or its other suppliers,it