PART I. FINANCIAL INFORMATION [Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q3 2021 financial statements reveal improved stockholders' deficit and increased cash from financing, despite operating losses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2021, shows increased cash and assets, reduced liabilities, and an improved stockholders' deficit Condensed Consolidated Balance Sheet Highlights (unaudited) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,281,094 | $167,725 | | Total current assets | $5,090,469 | $779,270 | | Total Assets | $11,443,562 | $7,371,537 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $3,335,047 | $9,151,683 | | Total liabilities | $16,061,155 | $27,563,740 | | Total stockholders' deficit | $(4,617,593) | $(20,192,203) | | Total Liabilities and Stockholders' Deficit | $11,443,562 | $7,371,537 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 and nine-month 2021 operations show net losses, a reversal from 2020 net income, driven by increased operating expenses and reduced other income Condensed Consolidated Statements of Operations (unaudited) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $11,723 | $6,293 | $557,369 | $60,445 | | Loss from Operations | $(2,660,427) | $(491,280) | $(5,628,372) | $(1,169,334) | | Net Income/(Loss) | $(2,564,914) | $2,590,621 | $(2,411,469) | $7,625,853 | [Condensed Consolidated Statements of Cash Flow](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Nine-month 2021 cash flow shows increased operating cash burn offset by substantial financing activities, leading to a net increase in cash Cash Flow Summary for the Nine Months Ended September 30 (unaudited) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash (used in) operating activities | $(6,227,813) | $(1,473,988) | | Net cash (used in) provided by investing activities | $(158,818) | $254,444 | | Net cash provided by financing activities | $10,500,000 | $2,298,200 | | **Net change in cash and cash equivalents** | **$4,113,369** | **$1,078,656** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail focus on high-value PV markets, a key agreement with TubeSolar AG, going concern uncertainty, and significant financing and debt settlement - The company is focusing on integrating its PV products into high-value markets such as aerospace, satellites, near-earth orbiting vehicles, and fixed-wing unmanned aerial vehicles (UAVs)[25](index=25&type=chunk) - On September 15, 2021, the company entered into a Joint Development Agreement (JDA) with TubeSolar AG, which includes up to **$4 million** in NRE fees, up to **$13.5 million** in milestone payments, and product revenues. A joint venture in Germany was also established[26](index=26&type=chunk)[27](index=27&type=chunk) - A going concern uncertainty exists due to recurring losses from operations and the need for additional financing to fund requirements for the next twelve months. The company used **$6.2 million** in cash for operations in the first nine months of 2021[40](index=40&type=chunk)[41](index=41&type=chunk) - On March 9, 2021, the company settled a **$5.8 million** secured promissory note with Global Ichiban by issuing **168 million** shares of common stock, which removed a lien on substantially all of the company's assets[53](index=53&type=chunk)[54](index=54&type=chunk) - On September 4, 2021, the company received notification that its **$193,200** PPP loan was forgiven by the SBA[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic focus, TubeSolar AG agreement, attributes increased losses to ramping operations, and highlights critical liquidity and going concern doubt [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Revenues increased in Q3 and nine-month 2021 due to restarted operations, but higher costs and non-recurring derivative gains led to increased operating and net losses Comparison of Three Months Ended September 30 | Metric | 2021 | 2020 | $ Change | | :--- | :--- | :--- | :--- | | Total Revenues | $11,723 | $6,293 | $5,430 | | Cost of Revenue | $687,885 | $5,528 | $(682,357) | | Loss From Operations | $(2,660,427) | $(491,280) | $(2,169,147) | | Net (Loss)/Income | $(2,564,914) | $2,590,621 | $(5,155,535) | Comparison of Nine Months Ended September 30 | Metric | 2021 | 2020 | $ Change | | :--- | :--- | :--- | :--- | | Total Revenues | $557,369 | $60,445 | $496,924 | | Cost of Revenue | $1,184,528 | $101,156 | $(1,083,372) | | Loss From Operations | $(5,628,372) | $(1,169,334) | $(4,459,038) | | Net (Loss)/Income | $(2,411,469) | $7,625,853 | $(10,037,322) | - The increase in revenues, cost of revenues, R&D, and SG&A expenses is attributed to the company ramping up operations in 2021 from a 'dormant status' in 2020[108](index=108&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is critical, with **$6.2 million** cash used in operations and insufficient cash for the next twelve months, raising substantial doubt about its going concern - The company used **$6,227,813** in cash for operations during the nine months ended September 30, 2021[119](index=119&type=chunk) - As of September 30, 2021, the company had working capital of **$1,755,422**, but management states cash liquidity is not sufficient for the next twelve months and requires additional financing[119](index=119&type=chunk) - Due to recurring losses and the need for additional financing, there is substantial doubt about the Company's ability to continue as a going concern[121](index=121&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies foreign currency and interest rate risks but believes its limited exposure will not significantly impact financial results or cash flows - The company's primary market risks are identified as foreign currency exchange risk and interest rate risk[126](index=126&type=chunk)[127](index=127&type=chunk) - Management does not believe a change in interest rates will have a significant impact on the company's financial position or results[127](index=127&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of September 30, 2021, with a previously identified material weakness in internal control over financial reporting successfully remediated - Management concluded that disclosure controls and procedures were effective as of September 30, 2021[129](index=129&type=chunk) - A material weakness related to a lack of technical accounting expertise, disclosed in the 2020 Form 10-K, has been remediated[133](index=133&type=chunk)[136](index=136&type=chunk) - Remediation steps included hiring a new CFO and Controller, reducing the complexity of the debt structure, and engaging an external resource for internal controls documentation and testing[134](index=134&type=chunk)[135](index=135&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any legal proceedings that would materially adversely affect its business or financial condition - The company is not currently aware of any legal proceedings that would have a material adverse effect on its business[139](index=139&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company highlights ongoing COVID-19 business disruption risk and confirms no material changes to previously disclosed risk factors - The COVID-19 pandemic continues to present a risk of business disruption, though the financial impact and duration cannot be reasonably estimated[140](index=140&type=chunk) - There have been no material changes to the company's risk factors from those included in the Annual Report on Form 10-K for the year ended December 31, 2020[140](index=140&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with or incorporated into the Form 10-Q, including governance documents, material agreements, and certifications - The report includes an index of exhibits, such as the Certificate of Incorporation, bylaws, material contracts like the Long-Term Supply and Joint Development Agreement, and Sarbanes-Oxley Act certifications[143](index=143&type=chunk)[144](index=144&type=chunk)[148](index=148&type=chunk)