Xantrex Technologies Inc.

Founded in 1983, Xantrex Technologies Inc. designs, manufactures and markets advanced power electronic products and system solutions which convert and control raw electrical energy from renewable power generators, power storage devices or the electrical grid into usable power. The company’s advanced power electronics include products and system solutions that manage multiple power sources, variable loads, complex operating sequences and systems requiring intelligent software-based control. As a market leader in terms of sales, range of products, brand name and technology for advanced power electronic products, Xantrex’s solutions meet the needs of a wide range of customers either as a key component that is integrated into equipment produced by original manufacturers, or in conjunction with separate power systems. The company’s strategy is to create a strong, defendable position in high-growth markets as industry trends continue to drive the demand for highquality and reliable power.

Principal Markets

Presently, Xantrex is focused on the high-margin segments of the renewable, portable, mobile and programmable power markets.

The renewable power market consists of solar, wind, backup power and emerging technologies. The company’s solar products convert direct current (DC) electricity produced by solar panels into alternating current (AC) power for grid-independent and grid-connected installations between one kilowatt and three megawatts. This segment is accessed through leading solar product original equipment manufacturers, distributors and solar power generation systems integrators. Xantrex’s wind power products transfer low quality, variable frequency or DC electricity from wind turbines into high quality, fixed frequency AC electricity for delivery to the power grid. The company also offers for the renewable power market backup power products, which are in the one kilowatt to 100 kilowatt range and convert DC electricity from batteries into AC power for use when the utility grid is not available.

The portable power market is driven by consumer need to use electronic devices, appliances, and power tools whenever and wherever the needs arises, while the mobile power market primarily impacted by consumer spending on luxury items, fuel prices and weather conditions in the company’s key geographic markets. The company offers ready-to-use power packs and power inverters and these portable products are range in capacity from 75 watts to three kilowatts. The mobile power offering includes auxiliary on-board power inverters and systems installed in large vehicles and boats, as well as portable inverts and systems sold by retailers for use at home, in cars, or away from the utility grid.

Xantrex’s programmable power market consists of industrial customers who design, develop, manufacture and test electronic equipment. There are also clients in this market seek precision equipment power sources as components to build into oil service vehicles, semiconductor manufacturing equipment and medical equipment.

Recent Developments

In August 2006, the company received an order to supply approximately US$1 million of its 500 kilowatt solar grid tie commercial inverters through Relatio Innovative Concepts, a marketing partner of Xantrex, for three projects in Germany. The company’s goal is to have its products become the first choice for renewable energy customers in Europe.

Also during the month, Xantrex secured an order for portable power packs valued at US$1 million from a major U.S. home improvement retailer for delivery by the end of September 2006. This order represents the first major sale for the company’s power packs to this new U.S. customer. On September 6, 2006, the company announced that it had received an order from ProSol Financiera S.A. valued at approximately US$2.5 million. This purchase order is for Xantrex’s grid tie commercial inverters for a project to build a solar power plant in Spain. The first shipment began in September 2006 and final deliveries are expected to be completed by the end of this year.

Share Buyback

During August 2006, Xantrex renewed its normal course issuer bid to acquire for cancellation up to 2,161,261 million common shares or 10% of its public float. The renewed bid commenced on August 22, 2006, and will expire on August 21, 2007 or until Xantrex announces termination of the bid. The original normal course issuer bid started on August 22, 2005. During the one year period ended August 21, 2006, the company purchased 1,159,600 common shares for cancellation at an average price of $8.27 per share. Management has recently stated the current market price of Xantrex’s common shares is attractive and the renewal of share buyback using a portion of its capital is consistent with the company’s objective of creating value for its shareholders.