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SolarWindow Technologies, Inc. - Quarter Report: 2019 November (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended November 30, 2019

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission file number 333-127953

 

SOLARWINDOW TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada  

59-3509694

(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
     
300 Main Street, Suite 6    
Vestal, NY   13850
(Address of principal executive offices)   (Zip Code)

 

(800) 213-0689

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has 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 such filing requirements for the past 90 days.

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “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

         
      Emerging growth company

 

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

 

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

 

Yes ☐ No ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 WNDW OTC Pink

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 52,959,323 shares of common stock, par value $0.001, were outstanding on January 13, 2020.

 

 

 

 

SOLARWINDOW TECHNOLOGIES, INC.

FORM 10-Q

 

For the Quarterly Period Ended November 30, 2019

 

Table of Contents

 

PART I FINANCIAL INFORMATION  
   
Item 1. Financial Statements (Unaudited)  
   
Balance Sheets 1
   
Statements of Operations 2
   
Statements of Stockholders’ Equity 3
   
Statements of Cash Flows 4
   
Notes to Financial Statements 5
   
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13
   
Item 4. Controls and Procedures 20
   
   
PART II OTHER INFORMATION  
   
Item 6. Exhibits 22
   
Signatures 23
   
Certifications  

 

 

 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements (Unaudited)

 

SOLARWINDOW TECHNOLOGIES, INC.

BALANCE SHEETS

 

   November 30,  August 31,
   2019  2019
ASSETS  (Unaudited)   
Current assets          
Cash  $15,950,512   $16,604,011 
Deferred research and development costs   658,585    580,879 
Prepaid expenses and other current assets   26,785    46,832 
Total current assets   16,635,882    17,231,722 
           
Operating lease right-of-use asset   59,913    65,646 
Equipment, net of accumulated depreciation of $75,542 and $68,858, respectively   1,367,276    1,368,929 
Security deposit   2,200    2,200 
Total assets   18,065,271   $18,668,497 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Current liabilities          
Accounts payable and accrued expenses   123,249   $97,549 
Related party payables   118,980    57,933 
Current maturities of operating lease   23,510    23,169 
Total current liabilities   265,739    178,651 
           
Non-current operating lease   36,558    42,564 
Total long term liabilities   36,558    42,564 
Total liabilities   302,297    221,215 
           
Commitments and contingencies          
           
Stockholders' equity          
Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding   -    - 
Common stock: $0.001 par value; 300,000,000 shares authorized, 52,959,323 shares issued and outstanding at November 30, 2019 and August 31, 2019   52,959    52,959 
Additional paid-in capital   71,587,270    71,166,300 
Retained deficit   (53,877,255)   (52,771,977)
Total stockholders' equity   17,762,974    18,447,282 
Total liabilities and stockholders' equity  $18,065,271   $18,668,497 

 

(The accompanying notes are an integral part of these financial statements)

 

1

 

 

SOLARWINDOW TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)

 

   Three Months Ended November 30,
   2019  2018
           
Revenue  $-   $- 
           
Operating expenses          
Selling, general and administrative   620,781    506,847 
Research and product development   579,000    387,912 
Total operating expenses   1,199,781    894,759 
           
Loss from operations   (1,199,781)   (894,759)
           
Other income (expense)          
Interest income   94,503    - 
Interest expense   -    (128,239)
Accretion of debt discount   -    (663,918)
Total other income (expense)   94,503    (792,157)
           
Net loss  $(1,105,278)  $(1,686,916)
           
Basic and Diluted Loss per Common Share  $(0.02)  $(0.03)
           
Weighted average number of common shares outstanding - basic and diluted   52,959,323    52,887,931 

 

(The accompanying notes are an integral part of these financial statements)

 

 

 

2

 

 

SOLARWINDOW TECHNOLOGIES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

 

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2019  Common Stock 

Additional

Paid-in

  Retained 

Total

Stockholders'

   Shares  Amount  Capital  Deficit  Equity
Balance, August 31, 2019   52,959,323   $52,959   $71,166,300   $(52,771,977)  $18,447,282 
                          
Stock based compensation due to common stock purchase options   -    -    420,970    -    420,970 
Net loss for the three months ended November 30, 2019   -    -    -    (1,105,278)   (1,105,278)
Balance, November 30, 2019   52,959,323   $52,959   $71,587,270   $(53,877,255)  $17,762,974 

 

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2018  Common Stock 

Additional

Paid-in

  Retained 

Total

Stockholders'

   Shares  Amount  Capital  Deficit  Equity
Balance, August 31, 2018   36,292,656   $36,293   $42,223,599   $(45,884,299)  $(3,624,407)
                          
November 2018 Private Placement units issued for cash   13,200,000    13,200.00    19,786,800    -    19,800,000 
November 2018 Private Placement units issued in exchange for convertible debt   3,466,667    3,466.00    5,196,534         5,200,000 
Stock based compensation due to common stock purchase options   -    -    385,734    -    385,734 
Net loss for three months ended November 30, 2018   -    -    -    (1,686,916)   (1,686,916)
Balance, November 30, 2018   52,959,323   $52,959   $67,592,667   $(47,571,215)  $20,074,411 

 

(The accompanying notes are an integral part of these financial statements)

 

 

3

 

 

SOLARWINDOW TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

 

   Three Months Ended November 30,
   2019  2018
Cash flows from operating activities          
Net loss  $(1,105,278)  $(1,686,916)
Adjustments to reconcile net loss to net cash flows used in operating activities          
Depreciation   6,684    3,988 
Stock based compensation expense   420,970    385,734 
Non cash lease expense   68    - 
Accretion of debt discount   -    663,918 
Changes in operating assets and liabilities:          
Decrease (increase) in deferred research and development costs   (77,706)   (52,226)
Decrease (increase) in prepaid expenses and other assets   20,047    19,070 
Increase (decrease) in accounts payable and accrued expenses   25,700    15,030 
Increase (decrease) in related party payable   61,047    - 
Increase (decrease) in interest payable   -    128,239 
Net cash flows used in operating activities   (648,468)   (523,163)
           
Cash flows used in investing activity          
Purchase of equipment   (5,031)   (11,855)
Net cash flows used in investing activity   (5,031)   (11,855)
           
Cash flows from financing activities          
Proceeds from the issuance of equity securities   -    19,800,000 
Net cash flows from financing activities   -    19,800,000 
           
Change in cash   (653,499)   19,264,982 
           
Cash at beginning of period   16,604,011    696,826 
           
Cash at end of period  $15,950,512   $19,961,808 
           
Supplemental disclosure of cash flow information:          
Interest paid in cash  $-   $- 
Income taxes paid in cash  $-   $- 
           
Supplemental disclosure of non-cash transactions:          
Common stock issued for conversion of note payable  $-   $5,200,000 

 

(The accompanying notes are an integral part of these financial statements)

 

4

 

 

SOLARWINDOW TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1 – Basis of Presentation and Organization

 

Basis of Presentation

 

The accompanying unaudited interim financial statements of SolarWindow Technologies, Inc. (the “Company”) as of November 30, 2019, and for the three months ended November 30, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

 

The preparation of financial statements in conformity with U.S. 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 expenses during the reporting periods. Actual results may differ from those estimates. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2019. In the opinion of management, the accompanying unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) necessary for the fair presentation of the Company’s financial position as of November 30, 2019, results of operations for the three months ended November 30, 2019 and 2018, and stockholders’ equity and cash flows for the three months ended November 30, 2019 and 2018. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

 

Organization

 

SolarWindow Technologies, Inc. was incorporated in the State of Nevada on May 5, 1998. Products derived from the Company’s SolarWindow™ technology harvest light energy from the sun and from artificial light sources, by generating electricity from a transparent coating of organic photovoltaic (“OPV”) solar cells, applied to glass and plastics, thereby creating a “photovoltaic” effect. The Company’s ticker symbol is WNDW.

 

Photovoltaics are best known as “solar panels” providing a method to generate electricity using solar cells to convert energy from the sun into a flow of electrons. Conventional PV power is generated by solar modules composed of interconnected mono- or poly-crystalline cells containing PV and electricity-conducting materials. These materials are usually opaque (i.e., non-transparent) and only effectively generate electricity with sun light. The Company’s researchers have replaced these materials with a very thin layer of specially developed compounds that allow SolarWindow™ technology to remain see-through or “transparent” while generating electricity when exposed to either sun or artificial light. SolarWindow™ coatings generate electricity when exposed to direct, diffused, filtered, low, or reflected natural or artificial light. The company filed a patent application related to these specially developed compounds.

 

Liquidity and Management’s Plan

 

The Company does not have any commercialized products, has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. Due to the “start-up” nature of our business, we expect to incur losses as we continue development of our products and technologies. As of November 30, 2019, the Company had $15,590,512 of cash on hand and current liabilities of $265,739. The Company believes that it currently has sufficient cash to meet its funding requirements over the next twelve months following the issuance of this Quarterly Report on Form 10-Q. However, the Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it may need to raise additional capital to accomplish its business plan over the next several years. If additional funding is required, the Company expects to seek to obtain that funding through private equity or convertible debt. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

 

5

 

 

NOTE 2 – Summary of Significant Accounting Policies

 

Use of Estimates

 

The preparation of the Company’s financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions.

 

Cash and Cash Equivalents

 

The Company considers cash deposits to be cash and all highly liquid investment instruments with original maturities of 90 days or less when purchased, to be cash equivalents. Cash deposits are carried at cost which approximates their fair value.

 

The Company had $15,950,512 of cash deposits as of November 30, 2019, including $232,025 in domestic bank accounts and $15,718,487 held in Canadian bank accounts in excess of Canadian Deposit Insurance Corporation insured limits.

 

Equipment

 

Fixed assets are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in that period.

 

Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

 

   Estimated
   Useful Lives
   (in years)
Computer equipment and software  3
Equipment, furniture and fixtures  5

 

Patent and Trademark Costs

 

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

 

Fair Value Measurements

 

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value:

 

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 1 inputs.

 

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 2 inputs.

 

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 3 inputs.

 

6

 

 

Fair Value of Financial Instruments

 

The carrying value of cash and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Company’s notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

 

Research and Product Development

 

Research and product development costs represent costs incurred to develop the Company’s technology, including salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, supplies, equipment purchase and repair and other costs. Research and product development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718, Stock Based Compensation.  ASC 718 requires all stock-based payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. The Company uses the Black-Scholes option pricing model (the “Black-Scholes Model”) to determine the weighted-average fair value of options granted and recognizes the compensation expense of stock-based awards on a straight-line basis over the vesting period of the award. If a stock-based award contains performance-based conditions, at the point that it becomes probable that the performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based condition is probable based on the expected satisfaction of the performance conditions as of the reporting date.

 

The determination of the fair value of stock-based payment awards utilizing the Black-Scholes option pricing model requires the use of the following assumptions: expected volatility of our common stock, which is based on our own calculated historical rate; expected life of the option award, which we elected to calculate using the simplified method; expected dividend yield, which is 0%, as we have not paid and do not have any plans to pay dividends on our common stock; and the risk-free interest rate, which is based on the U.S. Treasury rate in effect at the time of grant with maturities equal to the stock option award’s expected life. The Company evaluates the assumptions used to value the awards at each grant date and if factors change and different assumptions are utilized, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Forfeitures are accounted for as they occur. See “NOTE 4 – Common Stock and Warrants” and “NOTE 5 - Stock Options” for additional information on the Company’s stock-based compensation plans.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

 

7

 

 

Segment Reporting

 

The Company’s business is considered to be operating in one segment based upon the Company’s organizational structure, the way in which the operations are managed and evaluated, the availability of separate financial results and materiality considerations.

 

Net Income (Loss) Per Share

 

The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money).

 

Following is the computation of basic and diluted net loss per share for the three months ended November 30, 2019 and 2018:

 

   Three Months Ended November 30,
   2019  2018
Basic and Diluted EPS Computation          
Numerator:          
Loss available to common stockholders'  $(1,105,278)  $(1,686,916)
Denominator:          
Weighted average number of common shares outstanding   52,959,323    52,887,931 
Basic and diluted EPS  $(0.02)  $(0.03)
           
The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented:          
Stock options   2,935,334    1,271,334 
Warrants   19,483,517    19,483,517 
Total shares not included in the computation of diluted losses per share   22,418,851    20,754,851 

 

Recent Accounting Standards

 

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion. The Company believes that none of the new standards will have a significant impact on the financial statements.

 

NOTE 3 - Equipment

 

   November 30,  August 31,
   2019  2019
Computers, office equipment and software  $23,709  $18,678
Furniture and fixtures   12,634    12,634 
Product development and manufacturing equipment   113,820    113,820 
In-process equipment   1,292,655    1,292,655 
Total equipment   1,442,818    1,437,787 
Accumulated depreciation   (75,542)   (68,858)
Equipment, net  $1,367,276   $1,368,929 

 

8

 

 

During the three months ended November 30, 2019 and 2018, the Company purchased $5,031 and $11,855 of equipment, respectively. During the three months ended November 30, 2019 and 2018, the Company recognized depreciation expense of $6,684 and $3,988, respectively.

 

During the year ended August 31, 2019, the Company made payments totaling $1,292,655 towards the purchase of manufacturing equipment with an estimated total cost of $1,803,000. That equipment is currently being fabricated to our particular design specifications and will provide a significant increase in our ability to develop and showcase prototype products and components at or near “commercial size.” The remaining $510,345 is planned to be paid upon completion of the equipment sometime during or before April, 2020.

 

NOTE 4 – Common Stock and Warrants

 

Common Stock

 

At November 30, 2019, the Company had 300,000,000 authorized shares of common stock with a par value of $0.001 per share, 52,959,323 shares of common stock outstanding and 906,085 shares reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “2006 Plan”) as adopted and approved by the Company’s Board on October 10, 2006 that provides for the grant of stock options to employees, directors, officers and consultants (See “NOTE 5 - Stock Options”).

 

Warrants

 

Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. Other than the Series O Warrants and Series P Warrants, all of the following warrants may be exercised on a cashless basis. A summary of the Company’s warrants outstanding and exercisable as of November 30, 2019 and August 31, 2019 is as follows:

 

  

Shares of Common Stock

Issuable from Warrants

Outstanding as of

 

Weighted

Average

 

   
   November 30,  August 31,  Exercise     
Description  2019  2019  Price  Date of Issuance  Expiration
Series M   246,000    246,000   $2.34   December 7, 2015  December 31, 2022
Series N   767,000    767,000   $3.38   December 31, 2015  December 31, 2022
Series P   213,500    213,500   $3.70   March 25, 2016  December 31, 2022
Series R   468,750    468,750   $4.00   June 20, 2016  December 31, 2022
Series S-A   300,000    300,000   $2.53   July 24, 2017  December 31, 2022
Series S   821,600    821,600   $3.42   September 29, 2017  September 29, 2022
Series T   16,666,667    16,666,667   $1.70   November 26, 2018  November 26, 2025
Total   19,483,517    19,483,517            

 

NOTE 5 - Stock Options

 

Stock option grants pursuant to the 2006 Plan vest either immediately or over one to five years and expire from six to ten years after the date of grant. Stockholders previously approved 5,000,000 shares for grant under the 2006 Plan, of which 906,085 remain available for grant, 1,305,001 have been exercised in total with 629,677 net shares (due to a cashless exercise feature) issued pursuant to such exercises of vested options from inception of the 2006 Plan through November 30, 2019. All shares approved for grant and subsequently forfeited are available for future grant. The Company does not repurchase shares to fulfill the requirements of options that are exercised and therefore issues new shares when options are exercised. The 2006 Plan was approved by stockholders on February 7, 2011 and expires according to its terms on February 7, 2021.

 

9

 

 

The Company employs the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes Model and the simplified method to estimate the expected term of “plain vanilla” options:

 

    Three Months Ended  
    November 30, 
    2019 
Expected dividend yield    
Expected stock price volatility   82.94 – 86.23% 
Risk-free interest rate   1.40 – 1.69% 
Expected term (in years)   4.5 – 5.75 
Exercise price   $2.32 and $3.54 
Weighted-average grant date fair-value per share   $1.61 and $1.55 

 

A summary of the Company’s stock option activity for the three months ended November 30, 2019 and related information follows:

 

  

Number of

Shares

Subject to

Option Grants

 

Weighted

Average

Exercise

Price ($)

 

Weighted

Average

Remaining

Contractual

Term (Years)

 

Aggregate

Intrinsic

Value ($)

Outstanding at August 31, 2018   1,291,334    5.22           
Grants   1,506,000    3.54           
Forfeitures and cancellations   (20,000)   4.87           
Outstanding at August 31, 2019   2,777,334    4.31           
Grants   158,000    2.36           
Outstanding at  November 30, 2019   2,935,334    4.21    8.16    131,580 
Exercisable at  November 30, 2019   1,808,634    4.20    8.69    4,250 

 

The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of the period covered by this report and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all in-the-money option holders exercised their vested options on November 30, 2019. The intrinsic value of the option changes based upon the fair market value of the Company’s common stock. Since the closing stock price was $3.18 on November 30, 2019 and only 153,000 outstanding options have an exercise price below $3.18 per share, as of November 30, 2018, there is $131,580 of intrinsic value to the Company’s outstanding, in-the-money stock options.

 

Three Months Ended November 30, 2019

 

On October 9, 2019, the Company granted 153,000 options to an employee with an exercise price of $2.32, vesting at the rate of 1/36th per month and ten-year term. Additionally, on September 16, 2019, the Board granted 5,000 options to a consultant with an exercise price of $3.54, vesting at the rate of 1/20th per quarter and six-year term.

 

Three Months Ended November 30, 2018

 

Due to his resignation from the Board of Directors on October 22, 2018, Joseph Sierchio forfeited 20,000 unvested stock options with an exercise price of $4.87 which resulted in the Company reversing previously recorded stock compensation expense related to the vesting of said options in the amount of $58,367. During the three months ended November 30, 2018, the Company did not grant any stock options.

 

10

 

 

The following table sets forth the share-based compensation cost resulting from stock option grants, including those previously granted and vesting over time, that were recorded in the Company’s Statements of Operations for the three months ended November 30, 2019 and 2018:

 

   Three Months Ended
   November 30,
   2019  2018
Stock Compensation Expense:          
SG&A  $172,219   $135,442 
R&D   248,751    250,292 
Total  $420,970   $385,734 

 

As of November 30, 2019, the Company had $4,260,333 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 4.75 years.

 

The following table summarizes information about stock options outstanding and exercisable at November 30, 2019:

 

   Stock Options Outstanding  Stock Options Exercisable
Range of
Exercise
Prices
 

Number of

Shares
Subject to
Outstanding Options

  Weighted
Average
Contractual
Life (Years)
  Weighted
Average
Exercise
Price ($)
 

Number of

Shares

Subject to

Options Exercise

 

Weighted

Average
Remaining
Contractual
Life (Years)

  Weighted
Average
Exercise
Price ($)
 2.32    153,000    9.87    2.32    4,250    9.87    2.32 
 3.28    7,500    6.96    3.28    7,500    6.96    3.28 
 3.46    35,000    6.10    3.46    35,000    6.10    3.46 
 3.54    1,511,000    8.28    3.54    1,058,050    9.41    3.54 
 4.87    187,500    7.98    4.87    187,500    7.98    4.87 
 5.35    1,008,000    8.09    5.35    483,000    8.09    5.35 
 5.94    33,334    1.07    5.94    33,334    1.07    5.94 
 Total    2,935,334    8.16    4.21    1,808,634    8.69    4.20 

 

NOTE 6 - Related Party Transactions

 

A related party with respect to the Company is generally defined as any person (i) (and, if a natural person, inclusive of his or her immediate family) that holds 10% or more of the Company’s securities, (ii) that is part of the Company’s management, (iii) that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

 

On August 7, 2017, the Company appointed Jatinder Bhogal to the Board of Directors. Mr. Bhogal has provided consulting services to the Company through his wholly owned company, Vector Asset Management, Inc., pursuant to a Consulting Agreement dated February 1, 2014, as amended on November 11, 2016 and on December 1, 2018 (Amendment No. 2). Pursuant to the Consulting Agreements in effect prior to December 1, 2018, Mr. Bhogal received compensation of $5,000 per month. Beginning with Amendment No. 2, Mr. Bhogal receives compensation of $18,750 per month. During the three months ended November 30, 2019 and 2018, the Company recognized $56,250 and $15,000 of expense in connection with the Consulting Agreement.

 

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

 

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NOTE 7 – Lease

 

On May 1, 2019, the Company leased office space in Vestal, New York and entered into a Professional Building Lease Agreement (the “Lease”). The Lease has an initial term of three years through May 1, 2022 with monthly rent due of $2,200 for the first two years and $2,266 during year three. The Company has the sole option to renew the lease for an additional two years through May 1, 2024. The amounts disclosed in the Balance Sheets pertaining to the right-of-use asset and lease liability are measured based on only the initial, three-year term.

 

The Company’s existing Lease is not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing, or enter into additional Lease’s.

 

As of November 30, 2019, the Company has not entered into any leases which have not yet commenced which would entitle the Company to significant rights or create additional obligations.

 

The Company used its estimated incremental borrowing rate as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment.

 

The components of Lease expenses are as follows:

 

  

Three Months Ended

November 30, 2019

Operating lease cost  $6,666 
Short-term lease costs   - 
Total net lease costs  $6,666 

 

Supplemental balance sheet information related to the Lease is as follows:

 

  

As of November 30,

2019

    
Operating lease right-of-use asset  $59,913 
      
Current maturities of operating lease  $23,510 
Non-current operating lease   36,558 
Total operating lease liabilities  $60,068 
      
Weighted Average remaining lease term (in years):   2.42 
Discount rate:   5.85%

 

The Company’s future lease payments, which are presented as current maturities of operating leases and non-current operating leases liabilities on the Company’s balance sheets as of November 30, 2019 are as follows:

 

   Amount
2020  $19,800 
2021   26,664 
2022   18,128 
Total lease payments   64,592 
Less: Imputed interest   (4,525)
Total lease obligation   60,067 
Less: current lease obligations   23,510 
Long term lease obligations  $36,557 

 

NOTE 8 – Subsequent Events

 

Management has reviewed material events subsequent to the period ended November 30, 2019 and through the date of filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”.

 

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

 

Forward-Looking Statements

 

This Report on Form 10-Q contains forward-looking statements which involve assumptions and describe our future plans, strategies, and expectations, and are generally identifiable by use of words such as “may,” “will,“ “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project,” or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

 

Such forward-looking statements include statements regarding, among other things, (a) the potential markets for our technologies, our potential profitability, and cash flows, (b) our growth strategies, (c) expectations from our ongoing research and development activities, (d) anticipated trends in the technology industry, (e) our future financing plans, and (f) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our filings with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect our actual results may vary materially from those expected or projected.

 

Except where the context otherwise requires and for purposes of this Form 10-Q only, “we” “us“ “our“ “Company“ “our Company“ and “SolarWindow” refer to SolarWindow Technologies, Inc., a Nevada corporation.

 

Overview

 

We are a pre-revenue company developing proprietary SolarWindow™ transparent electricity generating coatings. SolarWindow™ coatings are an OPV device comprised of ultra-thin layers that can be applied to glass, flexible glass and plastic surfaces. Our SolarWindow™ transparent electricity-generating coatings and technology is capable of harvesting light energy from the sun and artificial sources and could potentially be used on any of the more than 85 million commercial and residential buildings in the U.S. alone. Our SolarWindow™ technology is the subject of over sixty (60) U. S. and international patent, and thirty (30) trademark application filings for our electricity-generating coating and SolarWindow™ technology development efforts.

 

The development of our SolarWindow™ technology continues to advance under the Stevenson-Wydler Cooperative Research and Development Agreement (the “CRADA”) with the Alliance for Sustainable Energy, LLC (the “Alliance for Sustainable Energy”), which is the operator of The National Renewable Energy Laboratory (“NREL”). SolarWindow™ technology and product development continues under the initial NREL CRADA.

 

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In addition, the Company was awarded an Advanced Materials Manufacturing Cooperative Research and Development Agreement (“AMM CRADA”) from the U.S. Department of Energy (“DOE”) Office of Energy Efficiency and Renewable Energy’s (“EERE”) Advanced Manufacturing Office (“AMO”). The purpose of AMM CRADA is to develop and demonstrate a unique high-throughput process methodology for semitransparent OPV modules compatible with high process speeds for many different advanced material manufacturing systems.

 

We have achieved numerous important milestones and overcome major technical challenges in the development of our SolarWindow™ technology, including the ability to generate electricity on glass while remaining transparent and the application of our coatings on to glass at room temperature and pressure.

 

A brief list of some of our more important milestones includes:

 

·SolarWindow™ coatings were successfully processed through a rigorous laminated commercial window glass fabrication autoclave system. Layered with SolarWindow™ electricity-generating liquid coatings, glass modules were subjected to the extremely high heat and pressure of autoclave equipment located at a commercial glass fabricator’s facility. Despite the SolarWindow™ modules being subjected to the harsh pressure and temperature conditions, subsequent performance testing confirmed that the modules continued to produce power. This is an important milestone for the commercialization of SolarWindow products, showing that our PV layers are compatible with autoclave production equipment.

 

·SolarWindow has been awarded a Grant by the U.S. Department of Energy, for Advanced Manufacturing. The Company was awarded the CRADA after submitting a proposal outlining its process technologies and fabrication methods to the DOE’s Roll-to-Roll Advanced Materials Manufacturing Consortium, led by Oak Ridge National Laboratory (“ORNL”) and partnering with Argonne National Laboratory (“ANL”), Lawrence Berkeley National Laboratory (“LBNL”), and NREL. The AMM CRADA will be carried out with the DOE by SolarWindow, ANL, and NREL.

 

·the Company has set a new performance record for power efficiency with a 34% increase in performance over previous generations of its transparent electricity-generating glass. Performance results are based on independent testing and certification of SolarWindow™ devices by NREL’s Device Performance Measurement Laboratory;

 

·successfully completed important freeze/thaw performance testing necessary for the commercialization of our transparent electricity-generating coatings; modules were subjected to more than 200 freeze/thaw cycles, which yielded favorable performance results of the edge sealing processes and minimal impact on the device electrical performance;

 

·expanded product development and successfully applied our electricity-generating coatings onto flexible glass – as thin as a business card (only 0.1-millimeter-thick) – that is flexible enough to be bent without breaking or cracking;

 

·entered into the NREL CRADA which is still in effect and continues to support our on-going R&D and product development to improve our device, materials, and processes;

 

·filed over ninety (90) U. S. and international patent and trademark applications for our electricity-generating coating and SolarWindow™ technology development efforts;

 

·expanded the use of our SolarWindow™ coatings to include two new product lines for commercial and military aircraft, and the safety and security of military pilots;

 

·generated electricity on flexible plastic using novel see-through SolarWindow™ coatings;

 

·developed new SolarWindow™ coatings with increased transparency and improved color;

 

14

 

 

·produced the largest OPV device ever fabricated at NREL in the institute’s history;

 

·successfully collected and transported electricity using a virtually ‘invisible’ conductive wiring system developed for SolarWindow™

 

We are currently developing “SolarWindow™ Products” derived from our SolarWindow™ technology designed to address several potential markets, including:

 

·SolarWindow™ – Commercial – A flat glass product for installation in new commercial towers under construction and replacement windows;

 

·SolarWindow™ – Structural Glass – Structural glass walls and curtains for tall structures;

 

·SolarWindow™– Architectural Glass – Textured and decorative interior glass walls, room dividers, etc.;

 

·SolarWindow™ – Residential – A window glass for installation in new residential homes under construction and replacement windows;

 

·SolarWindow™ – Flex – Flexible films which may be applied directly to different surfaces;

·SolarWindow™ - PowerWrap™ - A proprietary product under development that plans to feature multiple colors and high-power production; and

 

·SolarWindow™ Retrofit Veneer - Transparent, tinted, and flexible veneers that installers can apply directly on to existing, previously installed, window glass.

 

This product line is established to broaden our market reach goals beyond new and replacement installations, to include windows currently installed on the estimated five million commercial buildings constructed in the U.S. alone. As noted, the SolarWindow™ Retrofit Veneer products will be developed concurrently with the other SolarWindow™ products currently under development.

 

Our product development efforts have produced early working prototypes for these applications, which we are sharing with potential commercialization partners, who will work along-side us to ascertain whether the SolarWindowTM technology can form the basis for a commercially viable technology or product and which products will be first to market.

 

We also developed the capability to integrate transparent SolarWindow™ coatings on to flexible glass. This presents new product opportunities for curved and non-flat surfaces in automotive, aircraft, and military applications.

 

We plan to advance the technical and product development, and subsequent commercialization of our SolarWindow™ technologies and products through process integration with existing glass fabricators, research and development agreements, licensing, joint venture arrangements, and co-marketing and co-promotion and distribution arrangements with third party collaborators. We are actively seeking additional technology and product licensing, joint venture arrangements, and manufacturing process integration relationships with commercial partners and industry; and organizations which have established technical competencies, market reach, and mature distribution networks in the solar PV, building-integrated PV, and alternative and renewable energy market industries. We believe that this approach could provide immediate access to existing distribution channels which can increase market penetration and commercial acceptance of our products and enable us to avoid expending significant funds for development of a large sales and marketing organization. At the time of this filing, we have not entered into any such arrangements for these services or relationships.

 

15

 

 

We do not currently have any commercial products and there is no assurance that we will successfully be able to design, develop, manufacture, or sell any commercial products in the future. Our product development programs involve ongoing R&D and product development efforts, and the commitment of significant resources to support the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by our contract engineers, scientists, and consultants.

 

We cannot accurately predict the amount of funding or the time required to successfully commercialize or fabricate SolarWindow™ products. The actual cost and time required to commercialize our SolarWindow™ technology may vary significantly depending on, among other things, the results of our product development efforts; the cost of developing, acquiring, or licensing various enabling technologies; changes in the focus and direction of our business or product development plans; competitive and technological advances; the cost of patent filing, prosecuting, defending and enforcing claims; demonstrating compliance with regulations and standards; and manufacturing, marketing and other costs that may be associated with product fabrication. Because of this uncertainty, even if financing is available to us, we may secure insufficient funding to effectuate our business and/or product development plans.

 

Research and Related Agreements

 

We are a party to certain agreements related to the development of our SolarWindow™ technology.

 

Stevenson-Wydler Cooperative Research and Development Agreement with the Alliance for Sustainable Energy

 

On March 18, 2011, we entered into the NREL CRADA with Alliance for Sustainable Energy, the operator of the NREL under its U.S. Department of Energy contract to advance the commercial development of the SolarWindow™ technology. Under terms of the NREL CRADA, NREL researchers will make use of our exclusive intellectual property (“IP”), newly developed IP, and NREL’s background IP in order to work towards specific product development goals, established by the Company. Under the terms of the NREL CRADA, we agreed to reimburse Alliance for Sustainable Energy for filing fees associated with all documented, out-of-pocket costs directly related to patent application preparation and filings, and maintenance of the patent applications.

 

On January 16, 2013, we entered into a modification to the NREL CRADA for the purpose of extending the date pursuant to which NREL’s researchers will make use of our exclusive IP and NREL’s background IP.

 

On March 6, 2013, we entered into Phase II of our NREL CRADA. Under the terms of the agreement, researchers will additionally work towards:

 

·further improving SolarWindow™ technology efficiency and transparency;

 

·optimizing electrical power (current and voltage) output;

 

·optimizing the application of the active layer coatings which make it possible for SolarWindow™ coatings to generate electricity on glass surfaces;

 

·developing improved electricity-generating coatings by enhancing performance, processing, reliability, and durability;

 

·optimizing SolarWindow™ coating performance on flexible substrates; and

 

·developing high speed and large area roll-to-roll (R2R) and sheet-to-sheet (S2S) coating methods required for commercial-scale building integrated photovoltaic (“BIPV”) products and windows.

 

On December 28, 2015, we entered into another modification to the NREL CRADA (the “Modification”). The purpose of the Modification was to extend the date of completion to December 2019 pursuant to which NREL’s researchers work towards specific product development goals.

 

16

 

 

On November 18, 2019, we entered into a No Cost Time Extension (“NCTE”) under the NREL CRADA. Under the terms of the NCTE, all terms and conditions of the NREL CRADA remain in full force and effect without change, with a new completion date of March 21, 2020. Specifically, we are preparing to commercialize our OPV-based SolarWindow™ transparent electricity-generating coatings for BIPV, and glass and flexible plastic applications. Under the Modification, NREL and the Company will work jointly towards achieving specific commercialization goals and objectives. As of November 30, 2019, the Company made $658,585 of advances to Alliance for Sustainable Energy for work to be performed under the NREL CRADA, which is capitalized as deferred research and development costs on our balance sheets.

 

U.S. Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy’s (EERE) Advanced Manufacturing Office (AMO) Cooperative Research and Development Agreement

 

On March 15, 2018 the Company was awarded it’s first-ever AMM CRADA by the DOE EERE AMO. SolarWindow was awarded the AMM CRADA after submitting a proposal outlining its coating technologies and fabrication methods to the DOE’s Roll-to-Roll Advanced Materials Manufacturing Consortium, led by ORNL and partnering with ANL, LBNL, and NREL. The AMM CRADA will be carried out with the DOE by SolarWindow, ANL, and NREL.

 

The purpose of the AMM CRADA is to develop and demonstrate a unique high-throughput process methodology for semitransparent OPV modules compatible with high process speeds for many different advanced material manufacturing systems.

 

Results of Operations

 

Three months ended November 30, 2019 compared with the three months ended November 30, 2018

 

Operating Expenses

 

A summary of our operating expense for the three months ended November 30, 2019 and 2018 follows:

 

   Three Months Ended      
   November 30,  Increase /  Percentage
   2019  2018  (Decrease)  Change
Operating expenses:                    
Selling, general and administrative  $448,562   $371,405   $77,157    21 
Research and product development   330,249    137,620    192,629    140 
Stock based compensation   420,970    385,734    35,236    9 
Total operating expenses  $1,199,781   $894,759   $305,022    34 

 

Selling, General and Administrative

 

Selling, general and administrative (“SG&A”) costs include all expenditures incurred other than research and development related costs, including costs related to personnel, professional fees, travel and entertainment, public company costs, insurance and other office related costs. During the three months ended November 30, 2019 compared to the three months ended November 30, 2018, SG&A costs increased due primarily to an approximately $51,000 increase in personnel costs and $24,000 increase in other administrative costs.

 

Research and Product Development

 

Research and Product Development (“R&PD”) costs represent costs incurred to develop our SolarWindow™ technology and are incurred pursuant to our research agreements and agreements with other third-party providers and certain internal R&PD cost allocations. Payments under these agreements include salaries and benefits for R&PD personnel, allocated overhead, contract services and other costs. R&PD costs are expensed when incurred, except for non-refundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed. During the three months ended November 30, 2019 compared to the three months ended November 30, 2018, R&PD costs increased primarily as a result of an approximate $130,000 increase in CRADA costs, $48,000 increase in personnel costs and $15,000 increase in other R&PD related costs.

 

17

 

 

Stock Based Compensation

 

The Company grants stock options to its Directors, employees and consultants. Stock compensation represents the expense associated with the amortization of our stock options. Expense associated with equity-based transactions is calculated and expensed in our financial statements as required pursuant to various accounting rules and is non-cash in nature. Stock based compensation expense increased during the three months ended November 30, 2019 compared to the three months ended November 30, 2018 due to differences in the terms of option grants and the roll off of expense related to older grants offset by expense related to more recent grants.

 

Other Income (Expense)

 

A summary of our other income (expense) for the three months ended November 30, 2019 and 2018 follows:

 

   Three Months Ended November 30,  Increase /
   2019  2018  (Decrease)
Other income (expense)               
Interest income  $94,503   $-   $94,503 
Interest expense   -    (128,239)   (128,239)
Accretion of debt discount   -    (663,918)   (663,918)
Total other income (expense)  $94,503   $(792,157)  $(886,660)

 

“Interest income” relates to the interest earned on our cash. “Interest expense” relates to the stated interest of our convertible promissory notes and bridge note. “Accretion of debt discount” represents the accretion of the discount applied to those notes as a result of the issuance and modification of detachable warrants and the beneficial conversion feature contained therein. As a result of the financing received by the Company on November 26, 2018, all outstanding debt was converted resulting in the elimination of further interest expense and an increase in accretion due to the recognition of all remaining debt discount related to the 2013 Note.

 

Liquidity and Capital Resources

 

Our principal source of liquidity is cash in the bank. As of November 30, 2019, the Company had $15,950,512 of cash compared to $16,604,011 as of August 31, 2019. We have financed our operations primarily from the sale of equity and debt securities.

 

Summary of Cash Flows

 

Presented below is a table that summarizes the cash provided or used in our activities and the amount of the respective increases or decreases in cash provided by (used in) those activities between the fiscal periods:

 

   Three Months Ended November 30,  Increase /
   2019  2018  (Decrease)
Operating activities  $(648,468)  $(523,163)  $125,305 
Investing activities   (5,031)   (11,855)   (6,824)
Financing activities   -    19,800,000    (19,800,000)
Net increase (decrease) in cash and cash equivalents  $(653,499)  $19,264,982   $(19,681,519)

 

18

 

 

Operating Activities

 

Net cash used in operating activities increased $125,305 due to increases in personnel and R&PD costs.

 

Investing Activities

 

Net cash used in investing activities decreased due to fewer purchases of equipment.

 

Financing Activities

 

Net cash provided by financing activities decreased due to the Company being adequately financed for the foreseeable future as a result of the receipt of $19,800,000 from the November 2018 Private Placement.

 

Other Contractual Obligations

 

None.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Recently Issued Accounting Pronouncements

 

See Note 2 to our Financial Statements for more information regarding recent accounting pronouncements and their impact to our results of operations and financial position.

 

Critical Accounting Policies and Significant Judgments’ and Use of Estimates

 

We have prepared our consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our preparation of these financial statements and related disclosures requires us 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 revenue and expenses during the reporting periods. These estimates can also affect supplemental disclosures including information about contingencies, risk and financial condition. Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties and potentially yield materially different results under different assumptions or conditions. Given current facts and circumstances, we believe that our estimates and assumptions are reasonable, adhere to GAAP and are consistently applied. The accounting estimates that require our most significant estimates include stock compensation. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies are more fully described above under the Notes to Financial Statements “NOTE 2 – Summary of Significant Accounting Policies”.

 

New Accounting Standards to be Adopted Subsequent to November 30, 2019

 

None.

 

New Accounting Standards

 

For a discussion of our New Accounting Pronouncements, refer to “Note 2. Summary of Significant Accounting Policies to our Financial Statements” included in this Quarterly Report on Form 10-Q.

 

Related Party Transactions

 

For a discussion of our Related Party Transactions, refer to “Note 6 - Related Party Transactions” to our Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

 

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Corporate Information

 

SolarWindow Technologies, Inc., a Nevada corporation, was incorporated in 1998. The Company’s executive offices are located at 300 Main Street, Suite 6, Vestal, NY 13850. The Company’s telephone number is (800) 213-0689. Our Internet address is www.solarwindow.com. We make available free of charge through our Internet website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). The information accessible through our website is not a part of this Annual Report on Form 10-K.

 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains or incorporates a number of “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations, and are not strictly historical statements. In some cases, you can identify forward-looking statements by terminology such as “if,” “may,” “should,” “believe,” “anticipate,”“future,” “forward,” “potential,” “estimate,” “opportunity,” “goal,” “objective,” “growth,” “outcome,” “could,” “expect,” “intend,” “plan,” “strategy,” “provide,” “commitment,” “result,” “seek“ “pursue“ “ongoing“ “include” or in the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties and are not guarantees of performance, results, or the creation of shareholder value, although they are based on our current plans or assessments which we believe to be reasonable as of the date hereof.

 

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.

 

Factors that could cause actual results, events and developments to differ include, without limitation: the ability of our Company to generate sufficient net income and cash flows, capital market conditions, efficiencies/cost avoidance, cost savings, income and margins, growth, economies of scale, combined operations, future economic performance, litigation, potential and contingent liabilities, management’s plans, changes in regulations and taxes.

 

Forward-looking statements are not guarantees of performance. You should understand that the foregoing factors, in addition to those discussed under the section entitled “Risk Factors” in our SEC filings and in any documents incorporated by reference, could affect our future results and could cause actual results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. As a result, you should consider all of the relevant factors, together with all of the other information presented herein, in evaluating our business and that of our subsidiaries.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of November 30, 2019, that our disclosure controls and procedures were effective such that the information required to be disclosed in our SEC filings is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

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Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PART II – OTHER INFORMATION

 

Item 6. Exhibits

 

Exhibit No.Description of Exhibit
  
31.1Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
  
31.2Certification of Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
  
32.1Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
  
101.INSXBRL Instance Document**
101.SCHXBRL Taxonomy Extension Schema Document**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document**
101.LABXBRL Taxonomy Extension Label Linkbase Document**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document**

____________________

 

*Filed herewith

 

** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

 

 

 

 

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SIGNATURE

 

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.

 

SolarWindow Technologies, Inc.

 

By: /S/ Steve Yan-Klassen  
  Steve Yan-Klassen  
  Chief Financial Officer  
  (Principal Financial Officer)  
Date: January 13, 2020  

 

 

 

 

 

 

 

 

 

 

 

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