The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the related
notes, and other financial information included in this Form 10-Q.
Our Management's Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. Although the
forward-looking statements in this Quarterly Report reflect the good faith
judgment of our management, such statements can only be based on facts and
factors currently known by them. Consequently, and because forward-looking
statements are inherently subject to risks and uncertainties, the actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. You are urged to carefully review and consider
the various disclosures made by us in this report as we attempt to advise
interested parties of the risks and factors that may affect our business,
financial condition, and results of operations and prospects.
FORWARD LOOKING STATEMENTS
The information contained in this Form 10-Q contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve risks and uncertainties, including among other things,
statements regarding our capital needs, business strategy and expectations. Any
statement which does not contain a historical fact may be deemed to be a
forward-looking statement. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. In
evaluating forward looking statements, you should consider various factors
outlined in our Form 10-K report for the year ended September 30, 2020, filed
with the U.S. Securities Exchange Commission ("SEC") and, from time to time, in
other reports we file with the SEC. These factors may cause our actual results
to differ materially from any forward-looking statement. We disclaim any
obligation to publicly update these statements or disclose any difference
between our actual results and those reflected in these statements.
Overview
In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand
corporation. We continue to seek new financing in the form of equity, debt or a
combination thereof to meet development and general operating obligations.
Absent achieving sufficient funds soon, our viability is in doubt. The Company
has managed to raise some capital by sale of shares, but as of June 30, 2021,
the Company has not been successful in raising sufficient funds; However, work
is underway to secure funding, and we believe that funding for the Company is
possible in the near future although no assurance can be made as to the amount
of funds, if any, or the terms thereof.
The Company has appointed additional advisors to assist in securing new
financing for its projects and general operating obligations.
Current Business and Operations
We continue to develop our detailed plans for multi-faceted production
facilities in Queensland Australia to enable us to process raw high purity
quartz from the region into higher value high purity quartz products and sands
(HPQS). Further work is proceeding in respect to graphene production capability
and business planning on thin film capability.
Currently GSTX is primarily focused upon completing development and initial
production for commercially viable and efficient photovoltaic "Transparent Solar
Cells/Panels". This is to particularly meet increasing demand from the
construction industry for clear and transparent solar panel windows in high-rise
buildings. Such installations can significantly contribute to the facility's
electricity requirements.
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In 2017 GSTX recognized the remarkable potential of the amazing new 2D (Length &
Width only -One micron thickness) wonder-material Graphene to be utilized in
high- end electronics production and for the production more robust and
efficient essential combination materials. GSTX the US Public company, (then
Solar Quartz Technologies) (SQTX) was renamed Graphene & Solar Technologies
(GSTX) in July 2018. Since 2017 GSTX has established a strong working
association with a pioneering United States based producer of Graphene. This US
production house is highly regarded internationally for their ESG" compliant
processing and production techniques utilized for Graphene manufacturing. The
production house has also established itself as a major exponent of Graphene
enhanced polymers currently used in low-cost rapid production large scale 3D
Home printing of near indestructible housing. Following three (3) years of
extensive evaluation and design consideration GSTX and its USA associate, have
agreed to progress a new Joint Venture to establish an Australian Graphene
production facility in Brisbane, Australia forthwith. The terms of the joint
venture and funding are yet to be finalized.
For 18 months the Company has been conducting due diligence on a company holding
a valuable patent portfolio in the area of transparent and conductive thin film
and that would enable the Company to complement its expertise in High Purity
quartz and downstream applications in next generation transparent and flexible
PV Solar Cell and semiconductor applications. In July, the Company closed a
Share Sale and Purchase Agreement through its wholly owned subsidiary, US
Thin-Film Corporation (a Nevada company registered in April 2021 for this
purpose) with CIMA Nanotech Holdings Limited, "CNHL", (a Cayman Island
Registered company) to acquire its wholly owned subsidiary company Cima
Specialty Materials Ltd and its wholly owned subsidiary companies, one of which
holds a valuable portfolio of patents.
Under the terms of the Agreement 31,665,604 Regulation 144, restricted Common
shares of the Company were agreed, approved and issued as full and total
consideration for the share sale and purchase.
US Thin Film Corporation (USTFC), a United States company established in April
2021 as a 100% owned subsidiary the Company, now owns via the acquisition of
Cima Specialty Materials Ltd exclusive, Intellectual Property rights to a Patent
Portfolio of 72 (seventy-two) Patents. The Patents broadly cover the production
of Transparent Conductive Thin Films (TCF)and several advanced nano-particle
technologies used to produce innovative next-generation Thin-Film Conductive
Coatings, Electro-Magnetic Shielding, transparent antennas, advanced touch
screens, transparent anti-ice heating/defogging applications and of importance
for next generation transparent solar panels.
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Results of Operations
For the fiscal quarters ended June 30, 2021 and 2020 we generated no revenues,
and thus no cost of sales or gross profits.
For the fiscal quarters ended June 30, 2021 and 2020, we incurred $660,644 and
$464,110 respectively in operating expenses.
For the fiscal quarter ended June 30, 2021 we recorded other expenses of $99,267
while in June 30, 2020 we incurred expenses of $13,349 both items are
represented by accrued interest on debt. Other income of $6,656 was earned in
the fiscal quarter, June 30, 2021.
For quarter ended June 30, 2021, we reported net loss before taxes of $753,255
while in the six months ended June 30, 2020, we reported a net loss before taxes
of $475,487. Since there were no tax obligations in either year, net income /
loss in each year was the same as that reported before taxes.
For the periods ended September 30, 2020 and June 30, 2021, our cash positions
were $12 and $1170 respectively.
As of June 30, 2021, we had total current liabilities of $2,080,586 while as of
September 30, 2020, we had total current liabilities of $1,684,546 an increase
of about23%. Accrued interest payable increased from $132,099 to $147,763 all
attributable to accruals on the loans and the convertible notes payable.
Liquidity and Capital Resources
As of June 30, 2021, we had $16,749 in total current assets, $1,041 in total
other assets and $2,080,586 in total current liabilities. Accordingly, we had a
working capital deficit of $2,079,926.
Operating activities used $218,410 in cash for the nine-month period ended June
30, 2021, as compared to $213,764 for the nine-month period ended June 30, 2020.
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Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
For a discussion of our accounting policies and related items, please see the
Notes to the Financial Statements, included in Item 1.
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