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 are now seeking new financing in the form of equity, debt or a
combination thereof to meet development and general operating obligations. In
the absence of achieving sufficient funds soon, our viability will be in doubt.
Having said that, the Company has managed to raise some capital by sale of
shares, but as of December 31, 2020, it 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.
Current Business and Operations
With the acquisition of Solar Quartz Technologies Limited we owned mining
exploration and development rights to significant deposits of High Purity Quartz
that we have determined in our evaluation of independent reports and considered
judgment to have reserves which are adequate to provide the Company with
adequate resources for 25-30 years of production. See Item 1 in the FY 2020 10-K
Business for further details.
However, in November 2020 the Queensland Department of Natural Resources Mines
and Energy, DNRME, questioned the validity of the mining leases which had been
originally filed by the Company in 2011 and held in good standing since. In
December 2020, the Company engaged legal assistance to protect these interests
of the Company.
During January and February2021 Australian based lawyers continued preparation
of evidence to address the dispute with the Queensland Department Natural
Resources, Mines and Energy in respect of the mining leases held by the wholly
owned subsidiary company Graphene & Solar Technologies Limited (New Zealand).
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The Company is actively seeking interim working capital in order to complete
mining plans and build a pre-processing plant in Townsville, North Queensland,
Australia, build upon our management team and market high purity quartz (HPQS)
to established markets with whom our management team have had prior
relationships. These organizational efforts will be to secure significant new
capital for the acquisition of a site and the building of the pre-processing
plant. Upon completion, that plant will enable the Company to upgrade its newly
mined HPQS to its crushed grades and higher purity level sand and powder
products that have significant world-wide demand for use in the production of
advanced PV solar Panels and all high-end electronics, lighting, telecom, optic
and microelectronics. Failure to secure these financings will have potential
impact on the Company's ability to continue as a going concern.
Results of Operations
For the fiscal quarters ended December 31, 2020 and December 31, 2019 we
generated no revenues, and thus no cost of sales or gross profits.
For the fiscal quarters ended December 31, 2020 and December 31, 2019, we
incurred $627,100 and $235,338, respectively, in operating expenses.
For the fiscal quarter ended December 31, 2020 we recorded other expenses of
$14,276 while in December 31, 2019 we incurred expenses of $7,366 both items are
represented by accrued interest on debt. Other income of $2,191 was earned in
the fiscal quarter, December 31, 2020 and $2,050 in fiscal quarter, December 31,
2019.
For the fiscal quarter ended December 31, 2020, we reported net loss of $639,185
while in the fiscal quarter ended December 31, 2019, we reported a net loss
before taxes of $240,654.
For the periods ended December 31, 2020 and September 30, 2020, our cash
positions were $3,266 and $12 respectively.
As of December 31, 2020, we had total current liabilities of $1,929,500 while as
of September 30, 2020, we had total current liabilities of $1,684,546 an
increase of about 14%. Accrued interest payable increased from $132,099 to
$141,283 on notes and other loans payable that increased from $181,896 to
$302,216 and other accounts payable and related party debt that increased from
$1,370,551 to $1,486,001 during the period.
Liquidity and Capital Resources
As of December 31, 2020, we had $25,141 in total assets and $1,929,500 in total
liabilities. Accordingly, we had a working capital deficit of $1,904,359.
Operating activities used $113,232 for the quarter ended December 31, 2020, as
compared to $119,364 for the quarter ended December 31, 2019.
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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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GRAPHENE & SOLAR TECHNOLOGIES LIMITED 
