Graphene & Solar Technologies Ltd SEC 10-K Report

Graphene & Solar Technologies Ltd, a company focused on the photovoltaic manufacturing sector, has released its Form 10-K report for the fiscal year ended September 30, 2024. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces. Despite facing significant financial hurdles, the company is actively pursuing strategic initiatives to position itself for future growth in the clean energy sector.

Financial Highlights

• Revenue: $0 million. The company generated no revenues for the years ended September 30, 2024, and 2023.
• Gross Profit: Not provided. As there were no revenues, there were no cost of sales or gross profits.
• Operating Expenses: $2.56 million. Operating expenses increased due to higher costs of contracting professional services, legal fees, and other general and administrative expenses.
• Net Income (Loss): $(2.64) million. The net loss increased compared to the previous year, primarily due to higher operating expenses.
• Basic and diluted loss per common share: $(0.01). Reflects the increased net loss and higher number of shares outstanding.

Business Highlights

• Acquisition of Solar Quartz Technologies Limited: In July 2017, the company acquired Solar Quartz Technologies Limited, a New Zealand corporation with substantial mineral resource and technical engineering assets, enhancing its capabilities in the photovoltaic manufacturing sector.
• Acquisition of Specialty Material Group: In September 2021, through its subsidiary US Thin Film Corporation, the company acquired Specialty Material Group, a Cayman Island corporation with significant patents in nanoparticle conductive thin film material, expanding its technological portfolio.
• Focus on Silicon Wafers and Solar Cells: The company has renewed its strategy to supply silicon wafers and solar cells for the photovoltaic manufacturing sector, leveraging existing operations and upstream supply chain components.
• Partnerships for Reshoring Production: The company is exploring partnerships with established manufacturers to reshore production to the USA and Australia, aiming to strengthen its market position and operational efficiency.
• Recruitment for Strategic Plan Implementation: Actively recruiting new management team members to assist with implementing its strategic plan, indicating a focus on strengthening leadership to drive business growth.
• Development of Silicon Wafers and Solar Cells: The company is primarily focused on completing development and initial sample production of commercially viable silicon wafers and solar cells, with a goal to establish initial production and begin generating revenue in FY 2025.
• Impact of Inflation Reduction Act: The company operates in sectors that management believes will benefit from the clean energy incentives and initiatives included in the Inflation Reduction Act of 2022.

Strategic Initiatives

• Strategic Initiatives: The company is focused on expanding its operations in the photovoltaic manufacturing sector by supplying silicon wafers and solar cells. It is exploring partnerships to reshore production to the USA and Australia. Additionally, the company acquired Ausquartz Group Holdings Pty Ltd to enhance its control over key raw materials necessary for semiconductor and solar-related applications.
• Capital Management: The company has been actively raising capital through the issuance of equity and convertible notes. During the fiscal year, it issued 148,487,277 shares of common stock for various purposes, including stock-based compensation, debt settlement, and acquisitions. The company also entered into several promissory loan notes with related parties to secure additional funding. As of September 30, 2024, the company had a working capital deficit of $3,012,641, highlighting the need for continued capital management efforts.
• Future Outlook: The company plans to raise additional debt and/or equity financing to meet its cash flow requirements and strategic objectives. It is actively seeking new financing to support its operations and strategic initiatives, with a focus on achieving initial production and revenue generation in the photovoltaic sector by FY 2025. The company acknowledges the risk of insufficient funding and is prepared to explore strategic alternatives, including joint ventures or asset monetization, if necessary.

Challenges and Risks

• Financial Challenges: The company is facing significant financial challenges, as it has not been successful in raising sufficient funds to maintain primary operations. The ability to secure funding is of vital importance, and while efforts are underway, there is no assurance of success.
• Revenue Generation: The company has not generated any revenues for the years ended September 30, 2024, and 2023, which poses a substantial risk to its financial stability. Operating expenses have increased significantly due to higher costs of contracting professional services, legal fees, and other general and administrative expenses.
• Working Capital Deficit: The company is also facing a working capital deficit, which has improved from the previous year but remains a critical concern.
• Operational Risks: The company is exploring partnerships to reshore production to the USA and Australia, which could mitigate some operational risks but also introduces uncertainties related to execution and market acceptance. The company is also actively recruiting new management team members to assist with implementing its strategic plan, which may help address some operational challenges.
• Liquidity Concerns: The company’s liquidity is a major concern, with a minimal cash balance and a significant working capital deficit. Management plans to raise additional capital through debt and/or equity markets, but there is no assurance that these efforts will be successful. If funding is insufficient, the company may need to seek joint venture partners, monetize assets, or explore other strategic alternatives, including a merger or sale of the company.
• Inflationary Pressures: The company is also exposed to potential inflationary pressures, although it has not experienced significant impacts in the past quarter. The Inflation Reduction Act of 2022 may provide some benefits through clean energy incentives, but the impact remains uncertain.
• Going Concern: The company’s ability to continue as a going concern is in doubt due to its accumulated deficit, net loss, and lack of revenue generation. Management’s plans to address these issues include raising capital and potentially incurring additional liabilities with related parties. However, there is no assurance that these plans will be successful, and the company may need to seek protection under bankruptcy laws if it cannot secure adequate funding.

SEC Filing: Graphene & Solar Technologies Ltd [ GSTX ] - 10-K - Jul. 15, 2025