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Graphene & Solar Technologies Ltd - Quarter Report: 2018 June (Form 10-Q)

sqti_10q.htm

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

þ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2018

 

¨ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

SOLAR QUARTZ TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

 

27-2888719

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

433 N. Camden Dr., Ste. 400

Beverly Hills, CA 90212

(Address of principal executive offices, including Zip Code)

 

(310) 279-5100
(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

 

Emerging growth company

¨

 

If and emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period of complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

As of August 20, 2018, the registrant had 235,884,815 outstanding shares of common stock.

 

 

 
 
 
 

 

Solar Quartz Technologies Corporation

 

Form 10-Q

 

INDEX

 

 

 

Page

 

Part I Financial Information

 

 

 

 

 

 

 

 

Item 1

Financial Statements

 

4

 

 

 

 

 

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

8

 

 

 

 

 

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk.

 

10

 

 

 

 

 

 

Item 4

Controls and Procedures.

 

10

 

 

 

 

 

 

Part II Other Information

 

 

 

 

 

 

 

 

Item 1

Legal Proceedings.

 

 

 

 

 

 

 

 

Item 1A

Risk Factors

 

 

 

 

 

 

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

 

 

 

 

 

 

Item 3

Defaults Upon Senior Securities.

 

 

 

 

 

 

 

 

Item 4

Mine Safety Disclosures

 

 

 

 

 

 

 

 

Item 5

Other Information

 

 

 

 

 

 

 

 

Item 6

Exhibits - None

 

11

 

 

 

 

 

 

Signatures

 

12

 

 

 
2
 
 

 

SOLAR QUARTZ TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS 

(Unaudited)

 

 

 

June 30

 

 

September 30

 

 

 

2018

 

 

2017

 

ASSETS

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

28

 

 

$ 10,738

 

Due from SQTL

 

 

-

 

 

 

 

 

Due from SQTX

 

 

-

 

 

 

 

 

Due from affiliates

 

 

27,638

 

 

 

26,890

 

Total Current Assets

 

 

27,666

 

 

 

37,628

 

Other Assets:

 

 

 

 

 

 

 

 

Furniture, Fixtures & Equipment (Net)

 

 

52,798

 

 

 

92,653

 

Quartz Deposits

 

 

30,102

 

 

 

30,000

 

Total Assets

 

$ 110,566

 

 

$ 160,280

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

231,910

 

 

$ 364,101

 

Accounts payable – related party

 

 

295,754

 

 

 

-

 

Accrued interest payable

 

 

53,019

 

 

 

45,060

 

Accrued liabilities to related party

 

 

32,711

 

 

 

26,011

 

Short term notes payable

 

 

90,000

 

 

 

85,000

 

Due to Affiliates

 

 

424,048

 

 

 

418,755

 

Current portion of notes payable

 

 

70,747

 

 

 

70,747

 

Total Current Liabilities

 

 

1,198,189

 

 

 

1,009,674

 

Shareholders Deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value, 10,000,000 shares

 

 

-

 

 

 

-

 

authorized; none issued or outstanding

 

 

 

 

 

 

 

 

Common Stock, $0.00001 par value, 500,000,000 shares

 

 

2,359

 

 

 

2,245

 

authorized; 235,884,815 and 224,426,229 shares issued and outstanding

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

7,533,947

 

 

 

5,888,210

 

Accumulated deficit

 

 

(8,693,671 )

 

 

(6,739,849 )

Other comprehensive income

 

 

69,742

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(1,087,623 )

 

 

(849,394 )

Total liabilities and stockholders' deficit

 

$ 110,566

 

 

$ 160,280

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
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SOLAR QUARTZ TECHNOLOGIES CORPORATION 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ending June 30,

 

 

Nine Months Ending June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$ -

 

 

$ -

 

 

$ 1

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional Services

 

 

235,833

 

 

 

 

 

 

 

1,757,702

 

 

 

 

 

General and administrative

 

 

16,156

 

 

 

3,788

 

 

 

183,327

 

 

 

12,522

 

Total costs and expenses

 

 

251,989

 

 

 

3,788

 

 

 

1,941,029

 

 

 

(12,522 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(251,989 )

 

 

(3,788 )

 

 

(1,941,029 )

 

 

(12,522 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

1,665

 

 

 

27

 

 

 

-

 

 

 

27

 

Interest income

 

 

(1 )

 

 

-

 

 

 

1,665

 

 

 

-

 

Interest expense

 

 

(2,653 )

 

 

(2,653 )

 

 

(7,959 )

 

 

(7,959 )

Other interest costs

 

 

(2,250 )

 

 

(2,125 )

 

 

(6,500 )

 

 

(6,375 )

Total other income (expense)

 

 

(3,239 )

 

 

(4,751 )

 

 

(12,794 )

 

 

(14,307 )

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(255,228 )

 

 

(8,539 )

 

 

(1,953,823 )

 

 

(26,829 )

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency Translation Adjustment

 

 

69,742

 

 

 

-

 

 

 

69,742

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$ (185,486 )

 

$ (8,539 )

 

$ (1,884,081 )

 

$ (26,829 )
 

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.00 )

 

$ (0.01 )

 

$

(0.00

 

$ (0.03 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

235,012,370

 

 

 

1,002,134

 

 

 

229,768,805

 

 

 

1,002,134

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
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SOLAR QUARTZ TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 

 

 

 

Nine months ended June 30

 

 

 

2018

 

 

2017

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$ (1,884,081 )

 

$ (26,829 )

Adjustments to reconcile net loss

 

 

 

 

 

 

 

 

To net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

39,855

 

 

 

-

 

Stock based compensation

 

 

1,443,749

 

 

 

-

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

(102 )

 

 

966

 

Accounts payable

 

 

(132,912 )

 

 

11,560

 

Accrued interest payable

 

 

7,959

 

 

 

7,959

 

Accrued liabilities

 

 

6,700

 

 

 

6,375

 

Accrued compensation

 

 

295,754

 

 

 

-

 

Other liabilities

 

 

30,345

 

 

 

-

 

Net cash provided by (used in) operating activities

 

 

(192,013

)

 

 

31

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock for cash

 

 

176,003

 

 

 

-

 

Issuance of short term note payable

 

 

5,000

 

 

 

-

 

Net cash from financing activities

 

 

181,303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and equivalents

 

 

(10,710 )

 

 

31

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

10,738

 

 

 

35

 

End of period

 

$ 28

 

 

$ 66

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

Noncash financing activities

 

 

 

 

 

 

 

 

Issuance of shares to Vanguard shareholders

 

$ 2

 

 

$ -

 

Cash paid for interest expense

 

-

 

 

-

 

Cash paid for income taxes

 

-

 

 

-

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 
 
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SOLAR QUARTZ TECHNOLOGIES CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These consolidated financial statements of Solar Quartz Technologies Corporation (Solar Quartz or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Solar Quartz’s audited financial statements as of September 30, 2017.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

 

Principles of Consolidation and Basis of Presentation— The consolidated financial statements include the accounts of Solar Quartz Technologies Corporation and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

 

Use of Estimates -The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Significant estimates include but are not limited to the estimate of percentage of completion on construction contracts in progress at each reporting period which we rely on as a primary basis of revenue recognition, estimated useful lives of equipment for purposes of depreciation and the valuation of common shares issued for services, equipment and the liquidation of liabilities.

 

Stock-Based Compensation - The Company accounts for employee stock-based compensation using the fair value method. The fair value attributable to stock options is calculated based on the Black-Scholes option pricing model and is amortized to expense over the service period which is equivalent to the time required to vest the stock options.

 

Earnings Per Share - Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential shares.

 

 
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SOLAR QUARTZ TECHNOLOGIES CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Reclassifications - Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported. 

 

Recently Issued Accounting Pronouncements - Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. Recently accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements. These include accounting standards as they apply to leases. The Company will treat its development of mineral rights under standards for operating leases commonly applied in mineral extraction industries. 

  

NOTE 3 – CONVERTIBLE NOTES PAYABLE

 

The Company’s indebtedness as of June 30, 2018 and September 30, 2017 were as follows:

 

Description

 

June 30,

2018

 

 

September 30,

2017

 

 

 

 

 

 

 

 

Convertible notes

 

$ 70,747

 

 

$ 70,747

 

Notes Payable

 

$ 90,000

 

 

$ 85,000

 

 

The notes payable bear interest at 10% and are due on demand. The convertible notes bear interest at 15% and are also due on demand. The principal and accrued interest of these notes can be converted at the discretion of the holders into common shares at $3.31/share.

 

NOTE 4 –  RELATED PARTY

 

In the fiscal year ended September 30, 2017 we reported $418,755 due to affiliated parties that was an obligation on the books of Solar Quartz Technologies Limited upon its acquisition. That amount on June 30, 2018 was $424,048, represented by an increase on the books of Solar Quartz Technologies Limited (SQTL) to its affiliate, Australian Oil and Gas Holdings, Inc. (AOGH) the owner of nearly 95% of the shares of the Company and the CEO of Solar Quartz Technologies. Receivables from AOGH reported in the fiscal year ended September 30, 2017 was $26,890, increasing to $27,638 at June 30, 2018.

 

As of June 30, 2018, and September 30, 2017 the Company had accounts payable of $295,754 and $0, respectively, to directors of the Company for accrued consulting fees and compensation.

 

NOTE 5 – STOCKHOLDERS' EQUITY

 

2,000,334 common shares were issued for $176,303 in cash during the nine months ended June 30, 2018, resulting in an increase to Common Stock of $13 and Additional Paid-in Capital of $176,290.

 

10,000,000 shares of common stock were issued for services provided by members of board of directors and associated parties; which resulted in an increase of Common Stock of $101 and Additional Paid-in Capital of $1,443,648.

 

208,252 shares of common stock were issued to Vanguard shareholders who held all of the shares of the company prior to the acquisition in July 2017 of Solar Quartz Technologies Limited in order to adjust their respective holdings to reflect the terms of the acquisition agreement. This resulted in an increase in common stock of $2 and a reduction in Additional Paid-in Capital of $2.

 

NOTE 6 – SUBSEQUENT EVENTS

 

On August 13, 2018 the Company entered into a convertible note payable with a third party for the amount of $63,000, the note bears interest of 12% and is due May 30, 2019. Conversion price to be 55% of the lowest trading price during the 20 days prior to the latest trading day prior to conversion date. The Company is evaluating the accounting for the apparent imbedded derivative liability included in this note but as of the date these financial statements were released, has not completed that evaluation.

 

 
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

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, 2017, 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, as described in Note 1 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of June 30, 2018, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

Current Business and Operations

 

With the acquisition of Solar Quartz Technologies Limited we now own 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 an aggregate market value of $530,000,000. The reserves are adequate to provide the Company with adequate resources for 25-30 years of production. See Item 1 Business for greater details.

 

 
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We are currently 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 already significant management team and market HPQ and HPQS to established markets with whom our management team have had prior relationships. These organizational efforts will also include securing 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 a higher level of purity (HPQS) that has a 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 a negative impact on the Company’s ability to continue as a going concern.

 

Results of Operations

 

For the quarters ended June 30, 2017 and June 30, 2018 we generated no revenues, and thus no cost of sales or gross profits.

 

For the quarters ended June 30, 2017 and June 30, 2018, we incurred $3,788 and $251,989 respectively in operating expenses. The operating expense increases are due to the acquisition of Solar Quartz Technologies Limited, which had much more administrative activity in the current fiscal year, primarily in the form of professional services and other general and administrative expenses.

 

For the quarter ended June 30, 2017 we recorded other expenses of $4,751, all of which was represented by interest on debt, while for the fiscal quarter ended June 30, 2018 we incurred other expenses of $3,239 including interest on debt of 4,903 offset by $1,665 of other comprehensive Income.

 

For the quarter ended June 30, 2017, we reported net loss and comprehensive loss of $8,539 with no translation gains or losses while in the fiscal quarter ended June 30, 2018 we reported a net loss of $255,228 and a comprehensive loss of $185,486, after translation gains of $69,742.

 

For the periods ended September 30, 2017 and June 30, 2018, our cash positions were $10,738 and $28 respectively. As of September 30, 2017, we reported $418,755 due to affiliated parties that was an obligation on the books of Solar Quartz Technologies Limited upon its acquisition. That amount on June 30, 2018 was $424,048, represented by an increase on the books of Solar Quartz Technologies Limited (SQTL) to its affiliate, Australian Oil and Gas Holdings, Inc. (AOGH) the owner of nearly 95% of the shares of the Company. Receivables from AOGH reported in the fiscal year ended September 30, 2017 was $26,011, increasing to $32,711 at June 30, 2018.

 

Liquidity and Capital Resources

 

As of June 30, 2018, we had total current liabilities of $1,198,189 while as of September 30, 2017, we had total current liabilities of $1,009,674, an increase of about 19%. Accrued interest payable increased from $45,060 to $53,019 all attributable to accruals on convertible notes payable.

 

Operating activities used $192,013 in cash for the 9 months ended June 30, 2018, as compared with $31 for the 9 months ended June 30, 2017. Our increase in cash used in operating activities was due to increased professional and contract labor costs as a result of the combination of the companies. The increases were attributable to the operating loss of $1,884,081 for the 9 months ended June 30, 2018 as compared to the operating loss of $26,829 in the 9 months ended June 30, 2017.

 

Cash from financing activities in the quarter ended June 30, 2018, used $181,303 for the 9 months ended June 30, 2018, which included the issuance of stock for $176,303, amounts due to related parties of $295,754 and issuance of short term note payable of $5,000, as compared to $0 for the 9 months ended June 30, 2017.

 

Additionally, during the nine-month period ended June 30, 2018, we reflected share based compensation in the amount of $1,483,749 compared to $- for the nine-month period ended June 30, 2017.

  

 
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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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of June 30, 2018, our Chief Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were not effective.

 

Warren Dillard, our Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of June 30, 2018 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework (1992). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls.

 

Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of June 30, 2018. Material weaknesses are inherent when we are unable to file current and periodic reports with the SEC as required by regulation. This limitation resulted from a general lack of financial support and resources in accounting and financial reporting systems to enable us to provide accurate reports on a timely basis

 

Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Management is in the process of addressing the underlying causes for our weaknesses in internal control. We plan to raise both debt and equity capital in the near future and to use those resources to engage outside consultants to assist with the processing of date and drafting financial reports on a timely basis in future reporting periods.

 

 
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PART II

 

ITEM 6. EXHIBITS

 

Exhibits

 

31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32.1

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  SOLAR QUARTZ TECHNOLOGIES CORPORATION
       
Date: August 20, 2018 By: /s/ Warren M. Dillard

 

 

Warren M. Dillard,  
   

Chief Financial and
Accounting Officer

 

 

 
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