10-Q 1 f10q_011024.htm FORM 10-Q
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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, 2023

 

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.)

 

9375 E. Shea Blvd., Suite 107-B    
Scottsdale, AZ   85260
(Address of principal executive offices)   (Zip Code)

 

(800) 213-0689

(Registrant’s telephone number, including area code)

 

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

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
     

 

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 ☐

 

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: None

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 53,198,399 shares of common stock, par value $0.001, were outstanding on January 10, 2024.

 

 

 

 

 

SOLARWINDOW TECHNOLOGIES, INC.

FORM 10-Q

 

For the Quarterly Period Ended November 30, 2023

 

Table of Contents

 

 

PART I FINANCIAL INFORMATION  
   
Item 1. Consolidated Financial Statements  
   
Consolidated Balance Sheets 1
   
Consolidated Statements of Operations and Comprehensive Loss 2
   
Consolidated Statements of Stockholders’ Equity 3
   
Consolidated Statements of Cash Flows 4
   
Notes to Consolidated Financial Statements 5
   
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
   
Item 4. Controls and Procedures 15
   
PART II OTHER INFORMATION  
   
Item 1A. Risk Factors 16
   
Item 6. Exhibits 16
   
Signatures 17
   
Certifications  

 

 

 

 

 

 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

 

       
   November 30,  August 31,
   2023  2023
ASSETS  (Unaudited)   
Current assets          
Cash and cash equivalents  $135,020   $492,610 
Short-term investments   5,300,000    5,500,000 
Deferred research and development costs   103,633    56,698 
Prepaid expenses and other current assets   320,319    241,688 
Current assets of discontinued operations   13,775    13,522 
Total current assets   5,872,746    6,304,498 
Property and Equipment, net of accumulated depreciation of $128,721 and $125,127, respectively   1,311,688    1,315,282 
Total assets  $7,184,434   $7,619,780 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Current liabilities          
Accounts payable and accrued expenses  $167,336   $114,092 
Related party payables   24,583    37,025 
Current liabilities of discontinued operations   139,646    136,109 
Total current liabilities   331,565    287,226 
Total liabilities   331,565    287,226 
           
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, 53,198,399 shares issued and outstanding at November 30, 2023 and August 31, 2023   53,198    53,198 
Additional paid-in capital   82,758,599    82,735,384 
Accumulated other comprehensive income (loss)   (79,687)   (78,159)
Retained deficit   (75,879,241)   (75,377,869)
Total stockholders' equity   6,852,869    7,332,554 
Total liabilities and stockholders' equity  $7,184,434   $7,619,780 

 

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

 

 

 

 

 

 

 

 

 1 

 

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

 

           
   Three Months Ended November 30,
   2023  2022
       
Revenue  $-   $- 
           
Operating expenses          
Selling, general and administrative   451,501    384,484 
Research and development   116,696    216,566 
Total operating expenses   568,197    601,050 
Loss from operations   (568,197)   (601,050)
           
Other income (expense)          
Interest income   68,695    42,013 
Total other income (expense)   68,695    42,013 
Net loss from continuing operations  $(499,502)  $(559,037)
Net loss from discontinued operations   (1,870)   (167,120)
Net loss  $(501,372)  $(726,157)
Other comprehensive income (loss)          
Foreign currency translation gain/(loss)   (1,528)   (5,431)
Comprehensive income (loss)  $(502,900)  $(731,588)
           
Loss per Share from continuing operations basic and diluted  $(0.01)  $(0.01)
Loss per Share from discontinued operations basic and diluted  $(0.00)  $(0.00)
Loss per Share basic and diluted  $(0.01)  $(0.01)
           
Weighted average number of common shares outstanding - basic and diluted   53,198,399    53,198,399 

 

 

 

 

 

 

 2 

 

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

 

                               
   Common Stock            
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2023  Shares  Amount  Additional Paid-in Capital  Accumulated Other Comprehensive Income (Loss)  Retained Deficit  Total Stockholders' Equity
Balance, August 31, 2023   53,198,399   $53,198   $82,735,384   $(78,159)  $(75,377,869)  $7,332,554 
Stock based compensation due to common stock purchase options   -    -    23,215    -    -    23,215 
Foreign currency translation adjustment   -    -    -    (1,528)   -    (1,528)
Net loss for the three months ended November 30, 2023   -    -    -    -    (501,372)   (501,372)
Balance, November 30, 2023   53,198,399   $53,198   $82,758,599   $(79,687)  $(75,879,241)  $6,852,869 
                               
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2022                              
                               
Balance, August 31, 2022   53,198,399   $53,198   $82,576,002   $(73,631)  $(72,981,474)  $9,574,095 
Stock based compensation due to common stock purchase options   -    -    85,200    -    -    85,200 
Foreign currency translation adjustment   -    -    -    (5,431)   -    (5,431)
Net loss for the three months ended November 30, 2022   -    -    -    -    (726,157)   (726,157)
Balance, November 30, 2022   53,198,399   $53,198   $82,661,202   $(79,062)  $(73,707,631)  $8,927,707 

 

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

 

 

 

 

 

 

 

 

 3 

 

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

           
   Three Months Ended November 30,
   2023  2022
Cash flows from operating activities          
Loss from continuing operations  $(499,502)  $(559,037)
Loss from discontinued operations   (1,870)   (167,120)
Adjustments to reconcile net loss to net cash flows used in operating activities:          
Depreciation   3,594    3,927 
Stock based compensation expense   23,215    85,200 
Changes in operating assets and liabilities:          
Deferred research and development costs   (46,935)   (5,327)
Prepaid expenses and other assets   (78,650)   68,051 
Accounts payable and accrued expenses   55,000    39,895 
Related party payable   (12,442)   64,964 
Net cash used in operating activities   (557,590)   (469,447)
           
Cash flows from investing activities          
Redemption of short-term investments   200,000    - 
Net cash provided by (used in) investing activities   200,000    - 
Effect of exchange rate changes on cash and cash equivalents   -    (500)
Net increase (decrease) in cash and cash equivalents   (357,590)   (469,947)
Cash  and cash equivalents at beginning of period   492,610    8,077,849 
Cash and cash equivalents at end of period  $135,020   $7,607,902 

 

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

 

 

 

 

 

 

 

 

 4 

 

SOLARWINDOW TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1 – Organization

 

Organization

 

SolarWindow Technologies, Inc. was incorporated in the State of Nevada on May 5, 1998 (“SWT” and together with its controlled subsidiary companies, collectively, the “Company”). SolarWindow® technology harvests light energy from the sun and from artificial light sources using a transparent and ultra-lightweight coating of organic photovoltaic (“OPV”) solar cells applied to glass and plastics, thereby generating electricity. The Company’s ticker symbol is WNDW.

 

On August 24, 2020, SolarWindow Technologies, Inc. formed wholly owned SolarWindow Asia (USA) Corp., a Nevada Corporation, as the holding company for SolarWindow Asia Co. Ltd., (the “Korean Subsidiary”) a company formed in the Republic of Korea for the purpose of expansion into the Asian markets. On January 13, 2023, the Board formally elected to dissolve the Korean Subsidiary. SWT has retained accountants and counsel in South Korea to assist in the dissolution of the Korean Subsidiary.

 

Liquidity

 

The Company has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. We expect to incur losses as we continue to develop and further refine and promote our technologies and potential product applications. As of November 30, 2023, the Company had $5,435,020 of cash, cash equivalents and short-term investments on hand, and working capital of $5,541,181. The Company believes that it currently has sufficient cash to meet its funding requirements over the next twelve months following the issuance of this Annual Report on Form 10-K. However, the Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for additional capital investment. The Company expects that it may need to raise additional capital to commercialize its electricity generating coatings and application methodology. If additional funding is required, the Company expects to seek to obtain that funding through financial or strategic investors. There can be no assurance as to the availability of such financings nor is it possible to determine at this time the terms and conditions upon which such financing and capital might be available.

 

NOTE 2 – Interim Statement Presentation

 

Basis of Presentation and Use of Estimates

 

The accompanying unaudited interim consolidated financial statements of SolarWindow Technologies, Inc. and its controlled subsidiary companies (collectively, the “Company”) as of November 30, 2023, and for the three months ended November 30, 2023 and 2022 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on November 21, 2023.

 

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Actual results may differ from those estimates. The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position as of November 30, 2023, results of operations, stockholders’ equity and cash flows for the three months ended November 30, 2023, and 2022. 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.

 

 5 

 

 

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the accounting period. The Company considers its accounting policies relating to stock-based compensation to be the most significant accounting policy that involves management estimates and judgments. The Company has made accounting estimates based on the facts and circumstances available as of the reporting date. Actual amounts could differ from these estimates, and such differences could be material.

 

These consolidated financial statements presented are those of SolarWindow Technologies, Inc. and its wholly owned subsidiaries, SolarWindow Asia (USA) Corp., and SolarWindow Asia Co. Ltd. All significant intercompany balances and transactions have been eliminated.

 

As more fully described in Note 3, on January 13, 2023, the Board determined that it is in the best interests of the Company to discontinue operations in South Korea and to dissolve the Korean Subsidiary. In accordance with applicable accounting guidance, the results of the Korean Subsidiary are presented as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Korean Subsidiary as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of August 31, 2022. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

 

Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended August 31, 2023. Presented below and in the following notes is supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report.

 

Fiscal quarter

 

The Company’s quarterly periods end on November 30, February 28, May 31, and August 31. The Company’s first quarter in fiscal 2024 and 2023 ended on November 30, 2023, and 2022, respectively.

 

Cash and Highly Liquid Investments

 

Cash includes cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. The Company had $5,435,020 of cash and short-term deposits as of November 30, 2023, including $127,979 held in the US and covered by FDIC insurance, and $5,307,041 held in Canadian bank accounts with $5,239,510  in excess of Canadian Deposit Insurance Corporation insured limits.

 

          
   November 30,  August 31,
   2023  2023
Cash  $135,020   $492,610 
Short-term investments   5,300,000    5,500,000 
Total cash and short-term investments  $5,435,020   $5,992,610 

 

 6 

 

 

Short-term investments

 

The Company determines the balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. Money market funds, certificates of deposit, and time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments. As of November 30, 2023, short-term investments consist of a 12-month $4,000,000 fixed-term deposit earning interest of 5.3%, and a 12-month $1,300,000 fixed term deposit earning interest of 4.25% purchased in February 2023 and which $200,000 was redeemed during the three months ended November 30, 2023.

 

Accounting Pronouncements

 

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.

 

Recent accounting pronouncements not yet adopted

 

None.

 

Recently adopted accounting pronouncements

 

None.

 

NOTE 3 – Discontinued Operations

 

On January 13, 2023, the Board determined that it is in the best interests of the Company to discontinue operations in South Korea and to dissolve the Korean Subsidiary. The Company is working to dispose the Korean Subsidiary other than by sale in accordance with Accounting Standards Codification (“ASC”) 360-10-45-15, Long-Lived Assets to Be Disposed of Other Than by Sale.

 

In accordance with ASC 205-20, Discontinued Operations, the results of the Korean Subsidiary are presented as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss, and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Korean Subsidiary as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of August 31, 2022. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

 

The following table summarizes the significant items included in income from discontinued operations, net of tax in the Consolidated Statement of Operations and Comprehensive Loss for the three months ended November 30, 2023 and 2022:

 

          
   Three Months Ended November 30,
   2023  2022
Operating expenses          
Selling, general and administrative  $1,870   $150,876 
Research and development   -    16,253 
Total operating expenses   1,870    167,129 
           
Other income          
Interest income   -    9 
Net loss from discontinued operations  $(1,870)   (167,120)

 

The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of November 30, 2023 and August 31, 2023:

 

          
   November 30, 2023  August 31, 2023
Current assets          
Prepaid expenses and other current assets  $13,775   $13,522 
Total current assets   13,775    13,522 
Total assets  $13,775   $13,522 
           
Current liabilities          
Accounts payable and accrued expenses  $139,646   $136,109 
Total current liabilities  $139,646   $136,109 


 7 

 

 

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows for all periods presented.

 

NOTE 4 - 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).

 

The shares listed below were not included in the computation of diluted losses per share because to do so would be antidilutive for the periods presented:

 

          
   Three Months Ended November 30,
   2023  2022
Stock options   4,183,000    6,684,400 
Warrants   16,666,667    18,661,917 
    20,849,667    25,346,317 

 

NOTE 5 – Property and Equipment

 

Property and equipment consists of the following:

 

          
   November 30,  August 31,
   2023  2023
Computers, office equipment and software  $14,102   $14,102 
Equipment   133,653    133,653 
In-process equipment   1,292,655    1,292,655 
Total property and equipment   1,440,410    1,440,410 
Accumulated depreciation   (128,721)   (125,128)
Property and equipment, net  $1,311,688   $1,315,282 

 

During the three months ended November 30, 2023 and 2022, the Company recognized straight-line depreciation expense of $3,594 and $3,927, respectively.

 

During the year ended August 31, 2019, the Company made deposits for in-process equipment totaling $1,292,655 towards the purchase of manufacturing equipment. The Company is currently evaluating configuration options in order to optimize the equipment for manufacturing of the Company’s initial product. Completion of the equipment may require additional payments of up to approximately $510,000.

 

NOTE 6 – Common Stock and Warrants

 

Common Stock

 

At November 30, 2023, the Company had 300,000,000 authorized shares of common stock with a par value of $0.001 per share, and 53,198,399 shares of common stock outstanding.

 

 8 

 

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. The following warrants may be exercised on a cashless basis. A summary of the Company’s warrants outstanding and exercisable as of November 30, 2023 and August 31, 2023 is as follows:

 

               
   Shares of Common Stock Issuable from Warrants Outstanding as of         
Description  November 30, 2023  August 31, 2023  Weighted Average Exercise Price  Date of Issuance  Expiration
Series T   16,666,667    16,666,667   $1.70   November 26, 2018  November 26, 2025

 

NOTE 7 - Stock Options

 

The Company measures share-based compensation cost on the grant date, based on the fair value of the award, and recognizes the expense on a straight-line basis over the requisite service period for awards expected to vest. The Company estimates the grant date fair value of stock options using a Black-Scholes valuation model. No stock options were granted in the past two years. A summary of the Company’s stock option activity for the three months ended November 30, 2023 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, 2023   4,207,400    3.04           
Forfeitures and cancellations   (24,400)   3.54           
Outstanding at November 30, 2023   4,183,000    3.04    3.56    - 
Exercisable at November 30, 2023   4,164,200    3.03    3.57    - 

 

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, 2023. 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 $0.70 on November 30, 2023, and no outstanding options have an exercise price below $0.70 per share, as of November 30, 2023, there is no intrinsic value in the Company’s outstanding stock options and vested options.

 

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, 2023 and 2022:

 

          
   Three Months Ended November 30,
Stock compensation expense:  2023  2022
Selling, general and administrative  $22,510   $70,810 
Research and development   705    14,390 
Total  $23,215   $85,200 

 

 9 

 

As of November 30, 2023, the Company had $44,180 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 0.50 years.

 

The following table summarizes information about stock options outstanding and exercisable at November 30, 2023:

 

                               
   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    5.86    2.32    153,000    5.86    2.32 
2.60    2,500,000    2.59    2.60    2,500,000    2.59    2.60 
3.42    50,000    2.89    3.42    50,000    2.89    3.42 
3.46    35,000    2.10    3.46    35,000    2.10    3.46 
3.54    1,225,000    4.90    3.54    1,206,200    4.95    3.54 
4.87    110,000    3.98    4.87    110,000    3.98    4.87 
6.21    110,000    7.91    6.21    110,000    7.91    6.21 
Total    4,183,000    3.57    3.04    4,165,700    3.56    3.03 

 

NOTE 8 - Transactions with Related Persons

 

A related party with respect to the Company is generally defined as any person (and, if a natural person, inclusive of his or her immediate family) (i) 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.

 

Joseph Sierchio, one of the Company’s directors, has maintained his role as the Company’s general counsel since its inception as Principal of the law firm of Sierchio & Partners, LLP, and then as a Partner with Satterlee Stephens LLP and beginning in August 2020, as Principal of Sierchio Law, LLP pursuant to an engagement letter which provides for an annual fee of $175,000 in exchange for general counsel services, and the reimbursement of expenses. Fees for legal services and expense reimbursement billed by Sierchio Law, LLP totaled $43,750 and $43,750 for the three months ended November 30, 2023, and 2022, respectively. As of November 30, 2023, the Company recognized a related party payable to Sierchio Law, LLP of $17,083, including $14,583 related to legal services and $2,500 related to the quarterly board fee for the three months ended November 30, 2023.

 

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.

 

NOTE 9 – Commitments and Contingencies

 

On June 9, 2022, the Company was served the Notice of Civil Claim dated May 16, 2022 (the “Notice of Claim”), and related Notice of Application (the “Application”) and Order Made After Application (the “Order”) copies of which are referenced in this report as Exhibit 99.0. The Notice of Claim, the Application and Order are collectively referred to herein as the “Complaint.” Please refer to our Form 8-K filed on June 15, 2022, and Exhibit 99.0 hereto.

 

NOTE 10 – Subsequent Events

 

Management has reviewed material events subsequent of the period ended November 30, 2023 and through the date of filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”. In managements opinion, no material subsequent events have occurred as of the date of this quarterly report.

 

 


 10 

 

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, the terms “we,” “us,” “our,” “Company” “our Company,” and “SolarWindow” refer to SolarWindow Technologies, Inc., a Nevada corporation.

 

Overview

 

We are a developer of transparent electricity-generating coatings, and methods for their application to various materials (collectively, “LiquidElectricity® Coatings”). When applied in ultra-thin layers to rigid glass, and flexible glass and plastic surfaces our LiquidElectricity® Coatings transform otherwise ordinary surfaces into photovoltaic devices capable of generating electricity from natural sun, artificial light, and low, shaded, or reflected light conditions while maintaining transparency.

 

We have overcome major technical challenges and achieved many important milestones resulting in an expansion of the potential applications of LiquidElectricity® Coatings which span multiple industries, including architectural, automotive, agrivoltaic, aerospace, commercial transportation and marine. Our LiquidElectricity® Coatings are under development with support from commercial contract firms and at the U.S. Department of Energy’s National Renewable Energy Laboratory, through Cooperative Research and Development Agreements.

 

 11 

 

Research and Related Agreements

 

We are a party to certain agreements related to the development of our 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 our technology. Under terms of the NREL CRADA, NREL researchers 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 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 our technology efficiency and transparency;
·optimizing electrical power (current and voltage) output;
·optimizing the application of the active layer coatings and application processes which make it possible for LiquidElectricity® Coatings to generate electricity on glass surfaces;
·developing improved electricity-generating coatings by enhancing performance, processing, reliability, and durability;
·optimizing LiquidElectricity® Coating performance on flexible substrates; and
·developing high speed and large area roll-to-roll (R2R) and sheet-to-sheet (S2S) coating application methods required for commercial-scale building integrated photovoltaic (“BIPV”) products and windows.

 

On December 28, 2015, we executed another modification to the NREL CRADA (the “Modification”). Under the Modification, (i) the date of completion was extended to December 2017; and (ii) the Company and the NREL will work jointly towards achieving specific product development goals and objectives for the purpose of preparing to commercialize our OPV-based transparent electricity-generating coatings for various applications, including BIPV, glass and flexible plastics.

 

Over the course of our collaborative research and development efforts with the NREL under the CRADA, both parties have agreed to modifications to extend the date of completion. The Company and NREL have entered into eleven such No Cost Time Extensions (“NCTE”). Under the terms of each NCTE, all terms and conditions of the NREL CRADA remain in full force and effect without change. The current NCTE was executed on December 6, 2021, and extends the date of completion to December 31, 2024. As of November 30, 2023, the Company had a capitalized asset balance of $103,633 related to deferred research and development costs for advances to Alliance for Sustainable Energy for work to be performed under the NREL CRADA.

 

 

 12 

 

Results of Operations

 

Our operating results for the three months ended November 30, 2023 may not be indicative of the results that may be expected for the fiscal year. Our quarterly results of operations have varied in the past and are likely to do so again in the future. As such, we believe that period-to-period comparisons of our results of operations should not be relied upon as an indication of our future performance.

 

The following table presents the components of our consolidated results of operations for the periods indicated:

 

         2024 compared to 2023
  

Three Months Ended

November 30,

  Increase /  Percentage
   2023  2022  (Decrease)  Change
Operating expenses:                    
Selling, general & administrative  $428,991   $313,674   $115,317    37%
Research and development   115,991    202,176    (86,185)   -43%
Stock compensation   23,215    85,200    (61,985)   -73%
Total Operating expense  $568,197   $601,050   $(32,853)   -5%

 

Comparison of the three months ended November 30, 2023 to the three months ended November 30, 2022

 

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, 2023, compared to the three months ended November 30, 2022, SG&A costs increased primarily due to higher professional and consulting fees ($133,000), offset by decreases in personnel costs ($16,000) and other administrative costs ($2,000).

 

Research and development

 

Research and Development (“R&D”) 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&D cost allocations. Payments under these agreements include salaries and benefits for R&D personnel, allocated overhead, contract services and other costs. R&D 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, 2023, compared to the three months ended November 30, 2022, R&D costs decreased primarily as a result of a decrease in CRADA costs.

 

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 decreased due to the tapering off of the vesting period of prior granted options combined with no option grants over the past few years.

 

Net loss from continuing operations

 

Consolidated net loss from continuing operations decreased $59,535 to $499,502 during the three months ended November 30, 2023, as compared to a net loss of $559,037 in the same period of the prior year. The decrease during the three months ended November 30, 2023, compared to 2022 is primarily due to lower costs related to stock compensation, and R&D offset by higher professional and consulting fees.

 

 13 

 

Net loss from discontinued operations

 

Net loss from discontinued operations of $1,870 during the three months ended November 30, 2023, and is primarily comprised of costs related to accounting fees. Net loss from discontinued operations of $167,120 during the three months ended November 30, 2022, is primarily comprised of costs related to SG&A ($87,000), legal fees ($64,000) and R&D ($16,000).

 

Liquidity and Capital Resources

 

Our primary cash needs are for personnel, professional and R&D related fees and other administrative costs. Our principal sources of liquidity are cash and short-term investments. As of November 30, 2023, the Company had cash, cash equivalents, and short-term investments of $5,435,020. We have financed our operations primarily from the sale of equity and debt securities.

 

The following table presents a summary of our cash flows for the periods indicated:

 

   Three Months Ended
November 30,
  2024 compared
   2023  2022  to 2023
Net cash used in operating activities  $(557,590)  $(469,447)  $(88,143)
Net cash provided by in investing activities   200,000    -    200,000 
Effect of exchange rate changes on cash   -    (500)   500 
Net increase (decrease) in cash and cash equivalents  $(357,590)  $(469,947)  $112,357 

 

Operating Activities - Operating activities consist of net loss adjusted for certain non-cash items, including depreciation, stock-based compensation expense, and the effect of changes in working capital. The amount of cash used during the three months ended November 30, 2023 compared to cash used during the three months ended November 30, 2022 decreased $88,143 due to an approximate decrease in cash layouts related to personnel ($16,000), R&D ($45,000), and working capital items ($27,000).

 

Investing Activities - We have used cash primarily for liquid short-term investments, purchases of furniture, office equipment, leasehold improvements, and computers. In February 2023, we purchased $5,500,000 of twelve-month term deposits of which the Company redeemed $200,000 during the three months ended November 30, 2023

 

Indebtedness

 

None.

 

Other Contractual Obligations

 

None.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Recent accounting pronouncements not yet adopted

 

See Note 2 to our consolidated financial statements, “Interim Statement Presentation - Accounting Pronouncements.”

 

Recently adopted accounting pronouncements

 

See Note 2 to our consolidated financial statements, “Interim Statement Presentation - Accounting Pronouncements.”

 

 14 

 

Critical Accounting Policies and Significant Judgments’ and Use of Estimates

 

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements required the use of estimates and judgments that affect the reported amounts of our assets, liabilities, and expenses. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an on-going basis. Actual results may differ from these estimates. There have been no significant changes to the critical accounting policies and estimates included in our Quarterly Report on Form 10-Q for the three and nine months ended November 30, 2023.

 

Related Party Transactions

 

See Note 8 to our consolidated financial statements for a discussion of our related party transactions.

 

Corporate Information

 

SolarWindow Technologies, Inc., a Nevada corporation, was incorporated in 1998. The Company’s executive offices are located at 9375 E Shea Blvd., Suite 107-B, Scottsdale AZ 85260. 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 Quarterly Report on Form 10-Q.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our Acting Principal Executive Officer and Principal Financial Officer (“Management”), after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of November 30, 2023, have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management does not expect that the Company’s disclosure controls or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We will conduct periodic evaluations of our internal controls to enhance, where necessary, our procedures and controls.

 

 15 

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting identified in connection with the evaluation described above that occurred during the three months ended November 30, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2023, which could materially affect our business, financial condition, financial results, or future performance. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended August 31, 2023.

 

Item 6. Exhibits

 

Exhibit No.Description of Exhibit
  
31.1Certification of the Acting 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 the 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 the Acting 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.INS Inline XBRL Instance Document**
101.SCH Inline XBRL Taxonomy Extension Schema Document**
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document**
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document**
104Cover Page Interactive Data File (embedded within the Inline XBRL 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.

 

 16 

 

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/ Amit Singh  
   Amit Singh
   Vice President
   (Acting Principal Executive Officer)
Date:  January 12, 2024
    
    
By:  /S/ Justin Frere  
   Justin Frere, CPA
   Interim Chief Financial Officer
   (Principal Financial Officer)
Date:  January 12, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17