Form 10-Q

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _________

Commission file number 001-13549

SOLAR THIN FILMS, INC.

(Exact name of small business issuer as specified in its charter)

Delaware		95-4356228
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

25 Highland Blvd, Dix Hills, New York 11746

(Address of principal executive offices)

(516) 417-8454

Issuer’s telephone number

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 requirement for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(do not check if smaller reporting company)

Smaller reporting company x

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Common Stock, $0.01 par value		57,608,601
(Class)		(Outstanding at May 13, 2008)

SOLAR THIN FILMS, INC .

Form 10-Q

for the Quarter Ended March 31, 2008

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2008 (Unaudited) and December 31, 2007	3

	Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the Three Months Ended March 31, 2008 and 2007 (Unaudited)	4

	Condensed Consolidated Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2008 (Unaudited) and Twelve Months Ended December 31, 2007	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007 (Unaudited)	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Result of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4T	Controls and Procedures	33

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3	Defaults upon Senior Securities	34

Item 4.	Submission of Matters to a Vote of Security Holders	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

Signatures		35

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SOLAR THIN FILMS, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2008			2007
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	2,685,047		$	4,157,476
Accounts receivable, net of allowance for doubtful accounts of $-0-		269,764			459,574
Accounts receivable, related party		1,331,863			1,456,863
Inventory		683,656			191,715
Advances and other current assets		205,654			169,888
Total current assets		5,175,984			6,435,516

Property, plant and equipment, net of accumulated depreciation and amortization of $407,024 and $341,896, respectively		584,923			595,030

Other assets:
Deferred financing costs, net of accumulated amortization of $532,358 and $506,796		75,142			100,704
Investment into CG Solar, at cost		1,500,000			-
Other assets		7,183			7,682
Total other assets		1,582,325			108,386

Total assets	$	7,343,232		$	7,138,932

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	3,287,678		$	3,072,799
Notes payable, current portion		903,585			-
Advances received from customers		635,055			-
Note payable-other		1,500,000			1,500,000
Total current liabilities		6,326,318			4,572,799

Convertible notes payable, net of unamortized discount		636,840			1,773,746
Dividends payable		164,841			156,522
Total long term debt		801,681			1,930,268

Commitments and contingencies

Minority interest		1,086,586			999,496

Stockholders’ Deficit
Preferred stock, par value $0.01 per share; 1,200,000 shares authorized; -0- issued and outstanding		-			-
Series B-1 Preferred stock, par value $0.01 per share, 1,000,000 shares authorized, 228,652 shares issued and outstanding		2,286			2,286
Series B-3 Preferred stock, par value $0.01 per share, 232,500 shares authorized, 47,518 shares issued and outstanding		475			475
Series B-4 Preferred stock, par value $0.01 per share, 1,000,000 shares authorized, - 0 - shares issued and outstanding, respectively		-			-
Common stock, par value $0.01 per share, 150,000,000 shares authorized, 57,607,601 and 57,012,601 shares issued and outstanding, respectively		576,076			570,126
Additional paid in capital		23,679,151			22,857,742
Treasury stock, at cost		(80,000	)		(80,000	)
Deferred compensation		(68,875	)		(79,750	)
Accumulated deficit		(25,529,192	)		(24,075,554	)
Accumulated other comprehensive income		548,726			441,044
Total stockholders' deficit		(871,353	)		(363,631	)

Total Liabilities and Stockholders' Deficit	$	7,343,232		$	7,138,932

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

SOLAR THIN FILMS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER

COMPREHENSIVE LOSS

(unaudited)

	Three months ended March 31,
	2008			2007

REVENUE:	$	287,994		$	1,902,963
Cost of sales		256,393			1,680,130
Gross profit		31,601			222,833

OPERATING EXPENSES:
General, selling and administrative expenses		941,640			1,380,778
Research and development		90,000			90,000
Depreciation and amortization		49,922			23,084
Total operating expenses		1,081,562			1,493,862

NET LOSS FROM OPERATIONS		(1,049,961	)		(1,271,029	)

Other income/(expense)
Foreign exchange gain (loss)		40,669			(4,932	)
Interest expense, net		(413,211	)		(682,805	)
Debt acquisition costs		(25,563	)		(49,932	)
Other income		2,515			14,299

Net loss before provision for income taxes		(1,445,551	)		(1,994,399	)

Income taxes		-			-

Net loss before minority interest		(1,445,551	)		(1,994,399	)

Minority interest		(8,087	)		-

NET LOSS	$	(1,453,638	)	$	(1,994,399	)

Foreign currency translation gain		107,682			26,321

Comprehensive Loss	$	(1,345,956	)	$	(1,968,078	)

Net loss per common share (basic and diluted)	$	(0.03	)	$	(0.11	)

Weighted average shares outstanding (basic and diluted)		57,404,579			18,948,601

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

SOLAR THIN FILMS, INC

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

TWELVE MONTHS ENDED DECEMBER 31, 2007 AND THREE MONTHS ENDED MARCH 31, 2008

(unaudited)

	Preferred Series B-1				Preferred Series B-3				Preferred Series B-4						Common shares
	Shares		Amount		Shares		Amount		Shares			Amount			Shares		Amount
Balance at December 31, 2006		228,652	$	2,286		47,518	$	475		95,500		$	955			16,269,597	$	162,696
Fractional shares issued upon 1.6 to 1 reverse split on February 9, 2007		-		-		-		-		-			-			1,504		15
Effect of adoption of EITF 00-19-2 change in accounting principle		-		-		-		-		-			-			-		-
Issuance of 33,425,000 shares of common stock for conversion of 95,500 Preferred B-4 shares		-		-		-		-		(95,500	)		(955	)		33,425,000		334,250
Issuance of 1,312,500 shares of common stock in exchange for convertible notes payable		-		-		-		-		-			-			1,312,500		13,125
Common stock issued in June 2007 for services rendered at $0.48 per share		-		-		-		-		-			-			400,000		4,000
Fair value of warrants issued in conjunction with settlement of convertible debt		-		-		-		-		-			-			-		-
Fair value of vested portion of 3,000,000 options issued to an officer		-		-		-		-		-			-			-		-
Issuance of 1,575,000 shares of common stock to acquire minority interest in subsidiary at $0.75 per share		-		-		-		-		-			-			1,575,000		15,750
Issuance of 4,029,000 shares of common stock in exchange for convertible notes payable		-		-		-		-		-			-			4,029,000		40,290
Issuance of majority owned subsidiary common stock in exchange for services to be rendered		-		-		-		-		-			-			-		-
Issuance of majority owned subsidiary common stock in exchange for services rendered		-		-		-		-		-			-			-		-
Sale of majority owned subsidiary common stock by subsidiary		-		-		-		-		-			-			-		-
Amortization of deferred compensation		-		-		-		-		-			-			-		-
Foreign currency translation gain		-		-		-		-		-			-			-		-
Net loss, December 31, 2007		-		-		-		-		-			-			-		-
Balance, December 31, 2007		228,652	$	2,286		47,518	$	475		-		$	-			57,012,601	$	570,126
Issuance of 595,000 shares of common stock in exchange for convertible notes payable		-		-		-		-		-			-			595,000		5,950
Fair value of vested portion of employee options issued		-		-		-		-		-			-			-		-
Sale of majority owned subsidiary common stock by subsidiary		-		-		-		-		-			-			-		-
Reduction in equity ownership of majority owned subsidiary		-		-		-		-		-			-			-		-
Amortization of deferred compensation		-		-		-		-		-			-			-		-
Foreign currency translation gain		-		-		-		-		-			-			-		-
Net Loss		-		-		-		-		-			-			-		-
Balance, March 31, 2008		228,652	$	2,286		47,518	$	475		-		$	-			57,607,601	$	576,076

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

SOLAR THIN FILMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

TWELVE MONTHS ENDED DECEMBER 31, 2007 AND THREE MONTHS ENDED MARCH 31, 2008

(unaudited)

										Other					Total
	Additional			Deferred			Treasury			Comprehensive		Accumulated			Stockholders'
	Paid in Capital			Compensation			Stock			Income (loss)		Deficit			Deficiency
Balance at December 31, 2006	$	3,627,872			-		$	(80,000	)	$	269,662	$	(4,790,109	)	$	(806,163	)
Fractional shares issued upon 1.6 to 1 reverse split on February 9, 2007		(15	)		-			-			-		-			-
Effect of adoption of EITF 00-19-2 change in accounting principle		10,821,900			-			-			-		(9,356,400	)		1,465,500
Issuance of 33,425,000 shares of common stock for conversion of 95,500 Preferred B-4 shares		(333,295	)		-			-			-		-			-
Issuance of 1,312,500 shares of common stock in exchange for convertible notes payable		511,875			-			-			-		-			525,000
Common stock issued in June 2007 for services rendered at $0.48 per share		188,000			-			-			-		-			192,000
Fair value of warrants issued in conjunction with settlement of convertible debt		61,767			-			-			-		-			61,767
Fair value of vested portion of 3,000,000 options issued to an officer		356,618			-			-			-		-			356,618
Issuance of 1,575,000 shares of common stock to acquire minority interest in subsidiary at $0.75 per share		1,165,500			-			-			-		(1,181,250	)		-
Issuance of 4,029,000 shares of common stock in exchange for convertible notes payable		3,988,710			-			-			-		-			4,029,000
Issuance of majority owned subsidiary common stock in exchange for services to be rendered		87,000			(87,000	)		-			-		-			-
Issuance of majority owned subsidiary common stock in exchange for services rendered		50,000			-			-			-		-			50,000
Sale of majority owned subsidiary common stock by subsidiary		2,331,810			-			-			-		-			2,331,810
Amortization of deferred compensation		-			7,250			-			-		-			7,250
Foreign currency translation gain		-			-			-			171,382		-			171,382
Net loss, December 31, 2007		-			-			-			-		(8,747,795	)		(8,747,795	)
Balance, December 31, 2007	$	22,857,742		$	(79,750	)	$	(80,000	)	$	441,044	$	(24,075,554	)	$	(363,631	)
Issuance of 595,000 shares of common stock in exchange for convertible notes payable		589,050			-			-			-		-			595,000
Fair value of vested portion of employee options issued		161,361			-			-			-		-			161,361
Sale of majority owned subsidiary common stock by subsidiary		105,225			-			-			-		-			105,225
Reduction in equity ownership of majority owned subsidiary		(34,227	)		-			-			-		-			(34,227	)
Amortization of deferred compensation		-			10,875			-			-		-			10,875
Foreign currency translation gain		-			-			-			107,682		-			107,682
Net Loss		-			-			-			-		(1,453,638	)		(1,453,638	)
Balance, March 31, 2008	$	23,679,151		$	(68,875	)	$	(80,000	)	$	548,726	$	(25,529,192	)	$	(871,353	)

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

SOLAR THIN FILMS, INC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	Three Months Ended March 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(1,453,638	)	$	(1,994,399	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		49,922			23,084
Minority interest		8,087			-
Fair value of options issued to officers and employees		161,362			-
Amortization of deferred financing costs		25,562			49,932
Amortization of debt discounts		361,679			678,264
Amortization of deferred compensation cost		10,875			-
Changes in operating activities:
Accounts receivable		189,810			(88,752	)
Accounts receivable, related party		125,000			(590,623	)
Inventory