UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the quarterly period ended March 31, 2009

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

For the transition period from _________ to _________

Commission file number 001-13549

SOLAR THIN FILMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-4356228
(State or other jurisdiction of incorporation or organization)	(IRS Employee Identification No.)

25 Highland Blvd, Dix Hills, New York 11746

(Address of principal executive offices)

(516) 417-8454

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the 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 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes o No x

Number of outstanding shares of the registrant's par value $0.01 common stock, as of May 14, 2009: 58,136,113.

SOLAR THIN FILMS, INC.

FORM 10-Q

INDEX

		PAGE

Cautionary Statement Concerning Forward-Looking Statements		3

PART I	FINANCIAL INFORMATION	F-1
Item 1.	Condensed Consolidated Balance Sheets at March 31, 2009 (unaudited) and December 31, 2008	F-1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2009 and 2008 (unaudited)	F-2
	Condensed Consolidated Statement of Stockholders’ Deficit for the Twelve Months Ended December 31, 2008 and Three Months Ended March 31, 2009 (unaudited)	F-3 to F-4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 (unaudited)	F-5
	Notes to Unaudited Condensed Consolidated Financial Statements	F-6 to F-33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4T.	Controls and Procedures	19

PART II	OTHER INFORMATION	20
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults on Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 5.	Other Information	21
Item 6.	Exhibits	21

Signatures		22

Cautionary Statement Concerning Forward-Looking Statements

Our representatives and we may from time to time make written or oral statements that are "forward-looking," including statements contained in this Quarterly Report on Form 10-Q and other filings with the Securities and Exchange Commission, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements within the meaning of the Act. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "may," "should," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. These risks may relate to, without limitation:

·	we have a significant working capital shortage; are currently in default in payment of approximately $1.75 million of indebtedness which became due in March 2009, and may face litigation or even bankruptcy if we are unable to met our obligations;

·	we need to raise additional capital which may not be available on acceptable terms or at all;

·	we have a history of substantial losses, may incur addition losses in 2009 and beyond, and may never achieve or maintain profitability;

·	our revenues and operating results are likely to fluctuate significantly;

·	we have only generated limited revenues and may never achieve profitability;

·	our equipment business is small and projected revenues may not materialize;

·	our equipment business is dependent on a small amount of customers and any loss of these customers will have a negative impact on our operations;

·	evaluating our business and future prospects may be difficult due to the rapidly changing market landscape;

·	our future success substantially depends on our ability to significantly increase our manufacturing capacity through the development of additional manufacturing facilities;

·	our “turnkey” manufacturing facility may not gain market acceptance, which would prevent us from achieving increased sales and market share;

·	technological changes in the solar power industry could render our turnkey manufacturing facilities uncompetitive or obsolete, which could reduce our market share and cause our sales to decline;

·	we face risks associated with the marketing, development and sale of our turnkey facilities internationally, and if we are unable to effectively manage these risks, it could impair our ability to expand our business abroad;

·	we may not be able to successfully develop and commercialize our turnkey PV manufacturing facilities which would result in continued losses and may require us to curtail or cease;

·	our fixed-price contracts could subject us to losses in the event that we have cost overruns;

·	we are selling 49% of the equity of our Kraft subsidiary in order to acquire BudaSolar Technologies Co. Ltd;

·	we need to raise significant additional financing to complete the acquisition of Algatec Solar Ag;

·	substantially all of Algatec's existing and projected 2009 revenues from the manufacture and sale of metallurgical crystalline solar modules are derived from its OEM contract with Q-Cells, which contract will expire at the end of 2009;

·	our inability to perform under significant contracts would have a material adverse effect on our consolidated business and prospects;

·	prices of metallurgical crystalline cells and other components may increase causing Algatec's profit margins to decrease;

·	even if we finance and complete the Algatec acquisition, there is no assurance that Algatec will be able to build equip and operate its new manufacturing facilities on schedule or within the amount budgeted for such purpose;

·	we have a few proprietary rights, the lack of which may make it easier for our competitors to compete against us;

·	we depend on the services of key executives and technical and other personnel, the loss of whom could materially harm our business or reduce our operational effectiveness;

·	we do not maintain theft or casualty insurance and only maintain modest liability and property insurance coverage and therefore we could incur losses as a result of an uninsured loss; and

·	governmental regulation may have a negative impact on our business.

Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described herein and in other documents we file from time to time with the Securities and Exchange Commission, including our Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and any Current Reports on Form 8-K filed by us.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SOLAR THIN FILMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2009			2008
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,909,936		$	619,257
Accounts receivable, net of allowance for doubtful accounts of $696,067 and $696,067, respectively		-			194,341
Accounts receivable, related party, net of allowance for doubtful accounts of $831,863 and $831,863, respectively		500,000			500,000
Inventory		701,146			207,041
Advances to suppliers		1,022,674			931,370
Note receivable, net of allowance for doubtful accounts of $250,000		-			-
Deposits and other current assets		180,689			378,331
Total current assets		4,314,445			2,830,340

Property, plant and equipment, net of accumulated depreciation of $371,731 and $439,998, respectively		334,378			413,241

Other assets:
Deferred financing costs, net of accumulated amortization of $595,454 and $581,000, respectively		12,046			26,500
Investments into CG Solar, at cost		1,500,000			1,500,000
Deposits		30,704			38,072
Other assets		583			3,893
Total other assets		1,543,333			1,568,465

Total Assets	$	6,192,156		$	4,812,046

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	4,824,291		$	4,028,115
Notes payable, current portion		2,797,774			2,560,997
Advances received from customers		2,171,678			1,969,390
Deferred revenue		434,079			33,452
Derivative liability		8,867			-
Note payable-other		1,500,000			1,500,000
Total current liabilities		11,736,689			10,091,954

Convertible notes payable, net of unamortized discount		-			-
Dividends payable		115,954			143,778
Total long term debt		115,954			143,778

Commitments and contingencies

Stockholder's Deficit
Preferred stock, par value $0.01 per share; 2,700,000 shares authorized:
Series A Preferred stock, par value $0.01 per share; 1,200,000 shares designated; -0- issued and outstanding at March 31, 2009 and December 31, 2008		-			-
Series B Preferred stock, par value $0.01 per share; 1,500,000 shares designated:
Series B-1 Preferred stock, par value $0.01 per share, 1,000,000 shares designated, 228,652 issued and outstanding at March 31, 2009 and December 31, 2008		2,286			2,286
Series B-3 Preferred stock, par value $0.01 per share, 232,500 shares designated, 47,502 and 47,518 issued and outstanding at March 31, 2009 and December 31, 2008, respectively		475			475
Series B-4 Preferred stock, par value $0.01 per share, 100,000 shares designated, -0- issued and outstanding at March 31, 2009 and December 31, 2008		-			-
Common stock, par value $0.01 per share, 150,000,000 shares authorized, 58,136,113 and 57,810,601 issued and outstanding as of March 31, 2009 and December 31, 2008, respectively		581,361			578,106
Additional paid in capital		22,011,206			24,838,003
Treasury stock		(80,000	)		(80,000	)
Deferred compensation		(69,986	)		(26,250	)
Accumulated deficit		(29,893,251	)		(32,549,564	)
Accumulated other comprehensive income (loss)		632,027			666,670
Total Solar Thin Film's stockholders' deficit		(6,815,882	)		(6,570,274	)
Noncontrolling interest		1,155,395			1,146,588
Total Stockholders’ deficit		(5,660,487	)		(5,423,686	)

Total Liabilities and Stockholders' Deficit	$	6,192,156		$	4,812,046

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

F-1

SOLAR THIN FILMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)

	Three months ended March 31,
	2009			2008

REVENUE:
Equipment sales	$	-		$	287,994
Factory Sales		1,658,740			-
Total revenue		1,658,740			287,994

Cost of sales		828,676			270,584
Gross profit		830,064			17,410

OPERATING EXPENSES:
General, selling and administrative expenses		1,169,787			941,640
Research and development		-			90,000
Depreciation and amortization		24,050			35,731
Total operating expenses		1,193,837			1,067,371

NET (LOSS) FROM OPERATIONS		(363,773	)		(1,049,961	)

Other income/(expense):
Foreign currency transaction gain		87,782			40,669
Interest expense, net		(268,214	)		(413,211	)
Gain on change in fair value of derivative liability		12,909			-
Debt acquisition costs		(14,455	)		(25,563	)
Other income		1,269			2,515

Net loss before provision for income taxes		(544,482	)		(1,445,551	)

Income taxes		-			-

Net Loss		(544,482	)		(1,445,551	)

Loss (income) attributable to the noncontrolling interest		349			(8,087	)

NET LOSS ATTRIBUTABLE TO SOLAR THIN FILMS, INC.	$	(544,133	)	$	(1,453,638	)

Net Loss per common share (basic and diluted)	$	(0.01	)	$	(0.03	)
Weighted average shares outstanding (basic and diluted)		58,081,696			57,404,579

Comprehensive Loss:
Net Loss	$	(544,482	)	$	(1,445,551	)
Foreign currency translation (loss) gain		(34,643	)		107,682

Comprehensive Loss		(579,125	)		(1,337,869	)
Comprehensive loss (income) attributable to the noncontrolling interest		349			(8,087	)
Comprehensive loss attributable to Solar Thin Films, Inc.	$	(578,776	)	$	(1,345,956	)

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

F-2

	SOLAR THIN FILMS, INC.
	Preferred Series B-1				Preferred Series B-3					Common shares
	Shares		Amount		Shares			Amount		Shares		Amount
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 ownership of majority owned subsidiary		-		-		-			-		-		-
Issuance of 199,000 shares of common stock in exchange for convertible notes payable		-		-		-			-		199,000		1,990
Issuance of 4,000 shares of common stock in exchange for convertible notes payable		-		-		-			-		4,000		40
Amortization of deferred compensation		-		-		-			-		-		-
Foreign currency translation gain		-		-		-			-		-		-
Net loss		-		-		-			-		-		-
Balance, December 31, 2008		228,652		2,286		47,518			475		57,810,601		578,106
Cumulative effect of a change in accounting principle adoption of EITF 07-05 effective January 1, 2009		-		-		-			-		-		-
Issuance of 325,000 shares of common stock in exchange for services rendered		-		-		-			-		325,000		3,250
Issuance of 512 shares of common stock in exchange for 16 Preferred Series B-3 shares		-		-		(16	)		-		512		5
Change in majority owned subsidiary equity		-		-		-			-		-		-
Fair value of vested portion of employee options granted		-		-		-			-		-		-
Amortization of deferred compensation		-		-		-			-		-		-
Foreign currency translation loss		-		-		-			-		-		-
Net loss		-		-		-			-		-		-
		228,652	$	2,286		47,502		$	475		58,136,113	$	581,361

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

F-3

SOLAR THIN FILMS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
TWELVE MONTHS ENDED DECEMBER 31, 2008 AND THREE MONTHS ENDED MARCH 31, 2009
(UNAUDITED)

	SOLAR THIN FILMS, INC.
										Other						Non			Total
	Additional			Deferred			Treasury			Comprehensive			Accumulated			contolling			Stockholders'
	Paid in Capital			Compensation			Stock			Income (loss)			Deficit			Interest			Deficiency
Balance, December 31, 2007		22,857,742			(79,750	)		(80,000	)		441,044			(24,075,554	)		999,496			635,865
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		1,085,016			-			-			-			-						1,085,016
Sale of majority owned subsidiary common stock by subsidiary		105,225			-			-			-			-			44,775			150,000
Reduction in ownership of majority owned subsidiary		-			-			-			-			-			170,221			170,221
Issuance of 199,000 shares of common stock in exchange for convertible notes payable		197,010			-			-			-			-			-			199,000
Issuance of 4,000 shares of common stock in exchange for convertible notes payable		3,960			-			-			-			-			-			4,000
Amortization of deferred compensation		-			53,500			-			-			-			-			53,500
Foreign currency translation gain		-			-			-			225,626			-			-			225,626
Net loss		-			-			-			-			(8,474,010	)		(67,904	)		(8,541,914	)
Balance, December 31, 2008		24,838,003			(26,250	)		(80,000	)		666,670			(32,549,564	)		1,146,588			(5,423,686	)
Cumulative effect of a change in accounting principle adoption of EITF 07-05 effective January 1, 2009		(3,222,222	)		-			-			-			3,200,446			-			(21,776	)
Issuance of 325,000 shares of common stock in exchange for services rendered		74,750			(78,000	)		-			-			-						-
Issuance of 512 shares of common stock in exchange for 16 Preferred Series B-3 shares		(5	)		-			-			-			-						-
Change in majority owned subsidiary equity		(9,156	)		-			-			-			-			9,156			-
Fair value of vested portion of employee options granted		329,836			-			-			-			-						329,836
Amortization of deferred compensation		-			34,264			-			-			-						34,264
Foreign currency translation loss		-			-			-			(34,643	)		-						(34,643	)
Net loss		-			-			-			-			(544,133	)		(349	)		(544,482	)
		22,011,206		$	(69,986	)		(80,000	)	$	632,027			(29,893,251	)		1,155,395		$	(5,660,487	)

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

F-4

SOLAR THIN FILMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Three months ended March 31,
	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Solar Thin Films, Inc.	$	(544,133	)	$	(1,453,638	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		33,533			49,922
(Loss) income attributable to noncontrolling interest, net of tax		(349	)		8,087
Amortization of deferred financing costs		14,454			25,562
Amortization of debt discounts		236,777			361,679
Amortization of deferred compensation costs		34,264			10,875
Fair value of vested options granted to officer and director		329,836			161,362
Change in fair value of derivative liability		(12,909	)		-
Changes in operating assets and liabilities:
Accounts receivable		161,280			189,810
Accounts receivable, related party		-			125,000
Inventory		(549,671	)		(491,941	)
Deposits and other current assets		173,389			(35,267	)
Accounts payable and accrued liabilities		851,582			223,198
Advances received from customers		340,783			635,055
Deferred revenue		412,251			-
Net cash provided by (used in) operating activities		1,481,087			(190,296	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments

SOLAR THIN FILMS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

TWELVE MONTHS ENDED DECEMBER 31, 2008 AND THREE MONTHS ENDED MARCH 31, 2009

(UNAUDITED)