Graphene & Solar's Losses Widen Amid Soaring Professional Fees

TL;DR

**GSTX is a pre-revenue penny stock with ballooning losses and a going concern warning; avoid at all costs.**

AI Summary

Graphene & Solar Technologies Ltd. (GSTX) reported no revenue for the quarter ended December 31, 2024, consistent with the prior year. The company's net loss significantly widened to $1,042,617 for the quarter, compared to a net loss of $369,136 in the same period of 2023, primarily due to a substantial increase in professional fees to $945,655 from $292,736. Total operating expenses surged to $965,764 from $316,962 year-over-year. Cash increased to $103,019 as of December 31, 2024, from $1,845 on September 30, 2024, largely driven by $199,416 in financing activities, including the issuance of new convertible notes. The company's total liabilities grew to $3,803,607 from $3,143,686, and it continues to operate with a significant accumulated deficit of $72,058,142, raising substantial doubt about its ability to continue as a going concern without further capital raises. GSTX issued 51,500,000 shares of common stock for stock-based compensation during the quarter, valued at $321,650.

Why It Matters

This filing reveals Graphene & Solar Technologies Ltd. is a pre-revenue company with rapidly escalating losses and a precarious financial position, posing significant risks for investors. The substantial increase in professional fees and related-party debt, alongside no revenue, suggests a company struggling to establish a viable business model. For employees, the going concern warning indicates job insecurity. Customers and the broader market are unaffected as the company has no current revenue-generating operations. Competitively, GSTX is far from being a player in the graphene or solar technology sectors, which are capital-intensive and require significant R&D and market penetration.

Risk Assessment

Risk Level: high — The company reported a net loss of $1,042,617 for the quarter ended December 31, 2024, and has an accumulated deficit of $72,058,142, indicating severe financial distress. The explicit 'Going Concern' warning in Note 1, stating the company requires capital to fund working capital deficits and for future operating activities, provides specific evidence of high risk.

Analyst Insight

Investors should avoid Graphene & Solar Technologies Ltd. given its pre-revenue status, widening losses, significant accumulated deficit, and explicit going concern warning. The company's reliance on debt and equity issuances, including related-party transactions, to sustain operations suggests a highly speculative investment with a high probability of further dilution and capital loss.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

$3,803,607

net Income

$(1,042,617)

eps

N/A

gross Margin

N/A

cash Position

$103,019

revenue Growth

0.0%

Revenue Breakdown

Key Numbers

• $0 — Revenue (No revenue reported for Q4 2024 or Q4 2023, indicating pre-revenue stage.)
• $(1,042,617) — Net Loss (Widened significantly from $(369,136) in Q4 2023, a 182% increase.)
• $945,655 — Professional Fees (Increased 223% from $292,736 in Q4 2023, a primary driver of increased losses.)
• $103,019 — Cash (Increased from $1,845 on September 30, 2024, primarily due to financing activities.)
• $3,803,607 — Total Liabilities (Increased from $3,143,686 on September 30, 2024, reflecting growing debt.)
• $(72,058,142) — Accumulated Deficit (Continued to grow, highlighting long-term unprofitability and going concern issues.)
• 718,194,059 — Outstanding Common Shares (As of October 18, 2025, indicating significant share count and potential for dilution.)
• 51,500,000 — Stock-based Compensation Shares (Issued in Q4 2024, contributing to share dilution.)
• $199,416 — Net Cash from Financing Activities (Primary source of cash inflow, including new convertible notes.)
• $60,000 — Notes Payable in Default (As of December 31, 2024, indicating financial instability.)

Key Players & Entities

• Graphene & Solar Technologies Limited (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• $1,042,617 (dollar_amount) — Net Loss for Q4 2024
• $369,136 (dollar_amount) — Net Loss for Q4 2023
• $945,655 (dollar_amount) — Professional fees for Q4 2024
• $292,736 (dollar_amount) — Professional fees for Q4 2023
• $72,058,142 (dollar_amount) — Cumulative net losses since inception as of December 31, 2024
• $103,019 (dollar_amount) — Cash as of December 31, 2024
• $1,845 (dollar_amount) — Cash as of September 30, 2024
• 51,500,000 (dollar_amount) — Shares of common stock issued for stock-based compensation in Q4 2024

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a significant accumulated deficit of $72,058,142 and incurred a net loss of $1,042,617 in the quarter ended December 31, 2024. With only $103,019 in cash and $60,000 in notes payable in default, substantial doubt exists about its ability to continue as a going concern without further capital raises.
• Increasing Operating Expenses [high — financial]: Total operating expenses surged by 205% to $965,764 from $316,962 in the prior year's quarter. A significant portion of this increase is attributed to professional fees, which rose 223% to $945,655, exacerbating the net loss.
• Growing Liabilities and Debt [high — financial]: Total liabilities increased to $3,803,607 from $3,143,686 as of September 30, 2024. The company also has $60,000 in notes payable in default, indicating financial distress and potential covenant breaches.
• Dilution from Stock Issuances [medium — financial]: The company issued 51,500,000 shares for stock-based compensation valued at $321,650 during the quarter. With a substantial outstanding common share count, such issuances contribute to significant dilution for existing shareholders.
• Unregistered Equity Sales [medium — regulatory]: The filing mentions unregistered sales of equity securities. If these sales were not properly registered or exempt from registration requirements, the company could face regulatory scrutiny and potential penalties.
• Defaults on Senior Securities [high — legal]: The company reported defaults on senior securities, which could lead to acceleration of debt, legal action from creditors, and further damage to its financial standing and reputation.

Industry Context

The graphene and solar technology sectors are characterized by rapid innovation and high capital requirements. Companies in these fields often operate in pre-revenue stages for extended periods, relying heavily on external financing. Competition is intense, with established players and emerging startups vying for market share and technological advancements.

Regulatory Implications

The company's disclosures regarding unregistered sales of equity securities and defaults on senior securities suggest potential non-compliance with securities regulations. This could lead to SEC investigations, fines, and increased scrutiny from investors and creditors.

What Investors Should Do

1. Monitor future financing activities closely for signs of dilution and assess the terms of any new debt or equity issuances.
2. Evaluate the company's ability to secure additional funding to address its going concern issues and operational deficits.
3. Scrutinize the management's strategy for achieving revenue generation and profitability in its graphene and solar technology segments.
4. Assess the potential impact of regulatory actions or legal proceedings stemming from defaults on senior securities and unregistered equity sales.

Key Dates

• 2024-12-31: Quarter End — Reported $0 revenue, a net loss of $1,042,617, and cash of $103,019. Total liabilities stood at $3,803,607.
• 2024-09-30: Prior Quarter End — Cash balance was $1,845, and total liabilities were $3,143,686, showing an increase in cash and liabilities in the subsequent quarter.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. It represents a negative balance in retained earnings. (GSTX has a substantial accumulated deficit of $72,058,142, indicating a long history of unprofitability and raising concerns about its long-term viability.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future, typically at least 12 months. If substantial doubt exists, it must be disclosed. (The company's financial situation, including its large deficit, recent losses, and limited cash, raises substantial doubt about its ability to continue as a going concern.)

Convertible Notes

Debt instruments that can be converted into a predetermined amount of equity (stock) in the issuing company. (The increase in cash was partly driven by the issuance of new convertible notes, which represent future potential dilution if converted.)

Stock-based Compensation

Compensation provided to employees or others in the form of stock or stock options, rather than cash. (GSTX issued a significant number of shares (51,500,000) for stock-based compensation, which increases the total share count and dilutes existing shareholders.)

Notes Payable in Default

Loans or other debt obligations that the company has failed to pay according to the agreed-upon terms. (The existence of $60,000 in notes payable in default highlights immediate financial instability and potential legal repercussions.)

Year-Over-Year Comparison

Compared to the prior year's quarter, Graphene & Solar Technologies Ltd. (GSTX) saw a dramatic increase in its net loss, widening by 182% to $1,042,617, primarily driven by a 223% surge in professional fees. While cash reserves have improved significantly from $1,845 to $103,019 due to financing, total liabilities have also grown to $3,803,607. The company continues to operate with a substantial accumulated deficit, and new risks related to defaults on senior securities and unregistered equity sales have emerged.

Filing Documents

• gstx_10q.htm (10-Q) — 657KB
• ex31_1.htm (EX-31.1) — 13KB
• ex31_2.htm (EX-31.2) — 13KB
• ex32_1.htm (EX-32.1) — 5KB
• ex32_2.htm (EX-32.2) — 5KB
• 0001903596-25-000488.txt ( ) — 3718KB
• gstx-20241231.xsd (EX-101.SCH) — 32KB
• gstx-20241231_cal.xml (EX-101.CAL) — 43KB
• gstx-20241231_def.xml (EX-101.DEF) — 116KB
• gstx-20241231_lab.xml (EX-101.LAB) — 276KB
• gstx-20241231_pre.xml (EX-101.PRE) — 227KB
• gstx_10q_htm.xml (XML) — 419KB

Management's Discussion and Analysis of Financial

Management's Discussion and Analysis of Financial Condition and Results of Operations. 17 Item 6.

Controls and Procedures

Controls and Procedures. 20

OTHER INFORMATION

PART II OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 22 Item 1A

Risk Factors

Risk Factors 22 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 22 Item 3 Defaults on Senior Securities 22 Item 4 Mine Safety Disclosures 22 Item 5 Other Information 22 Item 6. Exhibits. 22

SIGNATURES

SIGNATURES 23 GRAPHENE & SOLAR TECHNOLOGIES LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, 2024 2024 Assets Current Assets: Cash $ 103,019 $ 1,845 Prepaid expenses 10,693 11,923 Total Current Assets 113,712 13,768 Other Assets: Furniture and equipment, net of depreciation $ 79,059 and $ 88,063 23,474 26,262 Other Receivable 7,363 89,864 Other Assets 164,532 16,204 Right of Use Asset 133,622 160,615 Total Assets $ 442,703 $ 306,713 Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable and other payable $ 1,236,041 $ 1,295,394 Accrued interest payable 224,209 222,679 Due to related party 1,505,965 852,743 Lease Liability 43,740 46,968 Notes payable – $ 60,000 in default, at 12/31/24 and 09/30/24 297,602 324,928 Notes payable – related party 93,605 97,395 Convertible notes, net of discount $ 44,772 and $ 0 157,104 101,876 Convertible notes payable – related party, net of discount $ 45,760 and $ 4,083 151,917 84,426 Total Current Liabilities 3,710,183 3,026,409 Lease Liability 93,424 117,277 Total Liabilities $ 3,803,607 $ 3,143,686 Stockholders' Deficit Preferred stock: 10,000,000 shares authorized; $ 0.00001 par value; no shares issued and outstanding — — Common stock: 800,000,000 shares authorized; $ 0.00001 par value; 643,233,431 and 569,779,887 shares issued and outstanding 6,433 5,698 Additional paid-in capital 69,185,319 68,769,472 Stock Receivable ( 795,000 ) ( 795,000 ) Accumulated deficit ( 72,058,142 ) ( 71,015,630 ) Accumulated other comprehensive income 300,776 198,672 Non-Controlling Interest ( 290 ) ( 185 ) Total Stockholders' Deficit ( 3,360,904 ) ( 2,836,973 ) Total Liabilities and Stockholders' Deficit $ 442,703 $ 306,713 The accompanying notes are an integral part of these consolidated financial statements. 3 GRAPHENE & SOLAR TECHNOLOGIES LIMITED CO

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View this 10-Q filing on SEC EDGAR