Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On October 15, 2009, the management of U.S. Geothermal Inc. (the "Company"), in consultation with its independent accounting firm, determined that the Company will restate its financial statements for the years ended March 31, 2009, 2008 and 2007 as reported on Form 10-K filed June 15, 2009. The Company will also restate the financial statements contained in Form 10-Q filed August 10, 2009 for the period ended June 30, 2009.

In the Company's previously issued financial statements, the Company allocated the profits and losses relating to the Company's investment in Raft River Energy I LLC (RREI) based on net capital contribution percentages. The Company reviewed its previously filed financials and determined that the calculations for estimating the value of the Company's investment in Raft River Energy I LLC ("RREI") would need to be adjusted to the hypothetical liquidation at book value ("HLBV") estimation methodology. The HLBV methodology is becoming an accepted geothermal industry practice for allocation of profits and losses for tax equity investments with contractual liquidation provisions. The correction will increase the Company's investment in subsidiary Raft River Energy I LLC, while reducing the associated loss from the subsidiary, by approximately $1.5 million.

This determination requires correction to prior periods by issuance of a restated balance sheet, income statement, statement of cash flows and statement of stockholder's equity effective March 31, 2009, which statements would also include prior year adjustments for March 31, 2008 and March 31, 2007. These adjustments would be included in an amended Form 10-K for the period ended March 31, 2009 and an amended Form 10-Q for the period ended June 30, 2009. The financial statements associated with these original filings should not be relied upon until the restated financial reports are filed later this week as part of the amended reports.

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