Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2020 | Jul. 08, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | SolarWindow Technologies, Inc. | |
Entity Central Index Key | 0001071840 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,959,323 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 333-127953 | |
Entity Interactive Data Current | Yes |
BALANCE SHEETS (UNAUDITED)
BALANCE SHEETS (UNAUDITED) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Current assets | ||
Cash | $ 14,705,621 | $ 16,604,011 |
Deferred research and development costs | 658,150 | 580,879 |
Prepaid expenses and other current assets | 89,872 | 46,832 |
Total current assets | 15,453,643 | 17,231,722 |
Operating lease right-of-use asset | 48,198 | 65,646 |
Equipment, net of accumulated depreciation of $87,542 and $68,858, respectively | 1,355,276 | 1,368,929 |
Security deposit | 2,200 | 2,200 |
Total assets | 16,859,317 | 18,668,497 |
Current liabilities | ||
Accounts payable and accrued expenses | 79,861 | 97,549 |
Related party payables | 192,803 | 57,933 |
Current maturities of operating lease | 24,272 | 23,169 |
Total current liabilities | 296,936 | 178,651 |
Non-current operating lease | 24,212 | 42,564 |
Total long term liabilities | 24,212 | 42,564 |
Total liabilities | 321,148 | 221,215 |
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 May 31, 2020 and August 31, 2019 | 52,959 | 52,959 |
Additional paid-in capital | 72,456,580 | 71,166,300 |
Retained deficit | (55,971,370) | (52,771,977) |
Total stockholders' equity | 16,538,169 | 18,447,282 |
Total liabilities and stockholders' equity | $ 16,859,317 | $ 18,668,497 |
BALANCE SHEETS (UNAUDITED) (Par
BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Current assets | ||
Equipment, net of accumulated depreciation | $ 87,542 | $ 68,858 |
Stockholders' equity (deficit) | ||
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 52,959,323 | 52,959,323 |
Common stock, shares outstanding | 52,959,323 | 52,959,323 |
STATEMENTS OF OPERATIONS (UNAUD
STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Consolidated Statements Of Operations | ||||
Revenue | ||||
Operating expense | ||||
Selling, general and administrative | 521,523 | 511,296 | 1,707,446 | 1,454,363 |
Research and product development | 515,663 | 594,157 | 1,710,064 | 1,454,666 |
Total operating expense | 1,037,186 | 1,105,453 | 3,417,510 | 2,909,029 |
Loss from operations | (1,037,186) | (1,105,453) | (3,417,510) | (2,909,029) |
Other income (expense) | ||||
Interest income | 49,769 | 118,111 | 218,117 | 200,091 |
Interest expense | (128,239) | |||
Accretion of debt discount | (663,918) | |||
Total other income (expense) | 49,769 | 118,111 | 218,117 | (592,066) |
Net loss | $ (987,417) | $ (987,342) | $ (3,199,393) | $ (3,501,095) |
Basic and Diluted Loss per Common Share | $ (0.02) | $ (0.02) | $ (0.06) | $ (0.07) |
Weighted average number of common shares outstanding - basic and diluted | 52,959,323 | 52,959,323 | 52,959,323 | 47,616,857 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Deficit | Total |
Beginning Balance, Shares at Aug. 31, 2018 | 36,292,656 | |||
Beginning Balance, Amount at Aug. 31, 2018 | $ 36,293 | $ 42,223,599 | $ (45,884,299) | $ (3,624,407) |
November 2018 Private Placement units issued for cash, Shares | 13,200,000 | |||
November 2018 Private Placement units issued for cash, Amount | $ 13,200 | 19,786,800 | 19,800,000 | |
November 2018 Private Placement units issued in exchange for convertible debt, Shares | 3,466,667 | |||
November 2018 Private Placement units issued in exchange for convertible debt, Amount | $ 3,466 | 5,196,534 | 5,200,000 | |
Stock based compensation due to common stock purchase options | 385,734 | 385,734 | ||
Net loss | (1,686,917) | (1,686,917) | ||
Ending Balance, Shares at Nov. 30, 2018 | 52,959,323 | |||
Ending Balance, Amount at Nov. 30, 2018 | $ 52,959 | 67,592,667 | (47,571,215) | 20,074,411 |
Stock based compensation due to common stock purchase options | 355,227 | 355,227 | ||
Net loss | (826,836) | (826,836) | ||
Ending Balance, Shares at Feb. 28, 2019 | 52,959,323 | |||
Ending Balance, Amount at Feb. 28, 2019 | $ 52,959 | 67,947,894 | (48,398,052) | 19,602,801 |
Stock based compensation due to common stock purchase options | 355,226 | 355,226 | ||
Net loss | (987,342) | (987,342) | ||
Ending Balance, Shares at May. 31, 2019 | 52,959,323 | |||
Ending Balance, Amount at May. 31, 2019 | $ 52,959 | 68,303,119 | (49,385,394) | 18,970,684 |
Beginning Balance, Shares at Aug. 31, 2019 | 52,959,323 | |||
Beginning Balance, Amount at Aug. 31, 2019 | $ 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 | (1,105,278) | (1,105,278) | ||
Ending Balance, Shares at Nov. 30, 2019 | 52,959,323 | |||
Ending Balance, Amount at Nov. 30, 2019 | $ 52,959 | 71,587,270 | (53,877,255) | 17,762,974 |
Stock based compensation due to common stock purchase options | 434,656 | 434,656 | ||
Net loss | (1,106,698) | (1,106,698) | ||
Ending Balance, Shares at Feb. 29, 2020 | 52,959,323 | |||
Ending Balance, Amount at Feb. 29, 2020 | $ 52,959 | 72,021,926 | (54,983,953) | 17,090,932 |
Stock based compensation due to common stock purchase options | 434,654 | 434,654 | ||
Net loss | (987,417) | (987,417) | ||
Ending Balance, Shares at May. 31, 2020 | 52,959,323 | |||
Ending Balance, Amount at May. 31, 2020 | $ 52,959 | $ 72,456,580 | $ (55,971,370) | $ 16,538,169 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (3,199,393) | $ (3,501,095) |
Adjustments to reconcile net loss to net cash flows from operating activities | ||
Depreciation | 18,684 | 13,652 |
Stock based compensation expense | 1,290,280 | 1,096,186 |
Security deposits | (2,200) | |
Accretion of debt discount | 663,918 | |
Changes in operating assets and liabilities: | ||
Deferred research and development costs | (77,271) | (323,435) |
Prepaid expenses and other assets | (43,040) | (27,808) |
Accounts payable and accrued expenses | (17,688) | (9,243) |
Operating lease assets and liabilities | 199 | 22 |
Increase (decrease) in related party payable | 134,870 | 51,868 |
Increase (decrease) in interest payable | 128,239 | |
Net cash flows from operating activities | (1,893,359) | (1,909,896) |
Cash flows used in investing activity | ||
Purchase of equipment | (5,031) | (596,651) |
Net cash flows used in investing activity | (5,031) | (596,651) |
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 | (1,898,390) | 17,293,453 |
Cash at beginning of period | 16,604,011 | 696,826 |
Cash at end of period | 14,705,621 | 17,990,279 |
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 |
Basis of Presentation and Organ
Basis of Presentation and Organization | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 1 - Basis of Presentation and Organization | NOTE 1 – Basis of Presentation and Organization Basis of Presentation The accompanying unaudited interim financial statements of SolarWindow Technologies, Inc. (the “ Company U.S. 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. 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 May 31, 2020, results of operations, stockholders’ equity and cash flows for the three and nine months ended May 31, 2020 and 2019. 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 Photovoltaics are commonly known as “solar panels” providing a method to generate electricity using solar cells to convert energy from light 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 very thin layers of specially developed compounds that allow our 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 has filed patent applications related to the application and fabrication of SolarWindow™ devices using these 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 May 31, 2020, the Company had $14,705,621 of cash on hand and working capital of $15,156,707. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 2 - Summary of Significant Accounting Policies | 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 $14,705,621 of cash deposits as of May 31, 2020, including $52,764 in domestic bank accounts and $14,652,857 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 Computer equipment and software 3 years Equipment, furniture and fixtures 5 years 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. 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 product 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 Accounting Standards Codification (“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 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. 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 Loss Per Share The computation of basic earnings per share (“ EPS Following is the computation of basic and diluted net loss per share for the three and nine months ended May 31, 2020 and 2019: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (987,417 ) $ (987,342 ) $ (3,199,393 ) $ (3,501,095 ) Denominator: Weighted average number of common shares outstanding 52,959,323 52,959,323 52,959,323 47,616,857 Basic and diluted EPS $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.07 ) 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 2,935,334 1,271,334 Warrants 19,483,518 19,483,517 19,483,518 19,483,517 Total shares not included in the computation of diluted losses per share 22,418,852 20,754,851 22,418,852 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. |
Equipment
Equipment | 9 Months Ended |
May 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
NOTE 3 - Equipment | NOTE 3 - Equipment May 31, August 31, 2020 (Unaudited) 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 (87,542 ) (68,858 ) Equipment, net $ 1,355,276 $ 1,368,929 During the nine months ended May 31, 2020 and 2019, the Company purchased $5,031 and $596,651, respectively, of equipment. During the three months ended May 31, 2020 and 2019, the Company recognized depreciation expense of $5,782 and $5,209, respectively. During the nine months ended May 31, 2020 and 2019, the Company recognized depreciation expense of $18,684 and $13,652, respectively During the year ended August 31, 2019, the Company made payments for in-process equipment totaling $1,292,655 towards the purchase of manufacturing equipment with an estimated total cost of $1,803,000. That in-process 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.” Contingent on entering into an agreement with a manufacturing partner for our cleanroom process equipment, the remaining $510,345 is planned to be paid upon completion of the equipment fabrication and factory acceptance sometime before December, 2020. |
Common Stock and Warrants
Common Stock and Warrants | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 4 - Common Stock and Warrants | NOTE 4 – Common Stock and Warrants Common Stock At May 31, 2020, 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 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 May 31, 2020 and August 31, 2019 is as follows: Shares of Common Stock Weighted May 31, August 31, Exercise Description 2020 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 |
Stock Options
Stock Options | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 5 - Stock Options | 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 May 31, 2020. 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. 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: Nine Months Ended May 31, 2020 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 $1.55 A summary of the Company’s stock option activity for the nine months ended May 31, 2020 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term 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 May 31, 2020 2,935,334 4.21 7.66 years 111,690 Exercisable at May 31, 2020 2,010,434 4.23 8.08 years 21,718 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 May 31, 2020. 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 $3.05 on May 31, 2020 and 153,000 outstanding options have an exercise price below $3.05 per share, as of May 31, 2020, there is $111,690 of intrinsic value to the Company’s outstanding stock options. Three and Nine Months Ended May 31, 2020 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 1/36 th th Three and Nine Months Ended May 31, 2019 Due to his resignation from the Board of Directors on October 22, 2018, Joseph Sierchio, the Company’s current counsel, 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 nine months ended May 31, 2019, the Company did not grant any stock 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 and nine months ended May 31, 2020 and 2019: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Stock Compensation Expense: SG&A $ 172,219 $ 118,409 $ 516,658 $ 372,260 R&D 262,436 236,817 773,622 723,927 Total $ 434,655 $ 355,226 $ 1,290,280 $ 1,096,187 As of May 31, 2020, the Company had $3,391,022 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 4.25 years. The following table summarizes information about stock options outstanding and exercisable at May 31, 2020: Stock Options Outstanding Stock Options Exercisable Weighted Number of Number Average Shares Weighted Weighted of Shares Remaining Weighted Range of Subject to Average Average Subject Contractual Average Exercise Outstanding Contractual Exercise to Options Life Exercise Prices Options Life (Years) Price ($) Exercise (Years) Price ($) 2.32 153,000 9.36 2.32 29,750 9.36 2.32 3.28 7,500 6.46 3.28 7,500 6.46 3.28 3.46 35,000 5.60 3.46 35,000 5.60 3.46 3.54 1,511,000 7.78 3.54 1,108,350 8.74 3.54 4.87 187,500 7.48 4.87 187,500 7.48 4.87 5.35 1,008,000 7.59 5.35 609,000 7.59 5.35 5.94 33,334 0.56 5.94 33,334 0.56 5.94 Total 2,935,334 7.66 4.21 2,010,434 8.08 4.23 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 6 - Related Party Transactions | 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. (“VAMI”), pursuant to a Consulting Agreement dated February 1, 2014, as amended on November 11, 2016 and 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 received compensation of $18,750 per month. The Company recognized expense in connection with the Consulting Agreement of $56,250 and $56,250 during the three months ended May 31, 2020 and 2019, respectively, and $168,750 and $108,750 during the nine months ended May 31, 2020 and 2019, respectively. On July 1, 2020 the Company and VAMI entered into an Executive Services Consulting Agreement, which supersedes the foregoing agreements and pursuant to which Mr. Bhogal, in addition to continuing to serve as a director of the Company will also serve as the Company’s President and Chief Executive Officer. Please refer to “ NOTE 8 – Subsequent Events.” 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. |
Lease
Lease | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
NOTE 7 - Lease | 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 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 May 31, 2020, 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 Nine Months Ended Operating lease cost $ 6,666 $ 19,998 Short-term lease costs – – Total net lease costs $ 6,666 $ 19,998 Supplemental balance sheet information related to the Lease is as follows: As of May 31, 2020 As of August 31, 2019 Operating lease right-of-use asset $ 48,198 $ 65,646 Current maturities of operating lease $ 24,272 $ 23,169 Non-current operating lease 24,2112 42,564 Total operating lease liabilities $ 48,484 $ 65,733 Weighted Average remaining lease term (in years): 1.92 2.9 Discount rate: 5.85 % 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 May 31, 2020 are as follows: Amount 2020 $ 6,600 2021 26,664 2022 18,128 Total lease payments 51,392 Less: Imputed interest (2,908 ) Total lease obligation 48,484 Less: current lease obligations 24,272 Long term lease obligations $ 24,212 |
Subsequent Events
Subsequent Events | 9 Months Ended |
May 31, 2020 | |
Subsequent Events [Abstract] | |
NOTE 8 - Subsequent Events | NOTE 8 – Subsequent Events Management has reviewed material events subsequent to the period ended May 31, 2020 and through the date of filing of financial statements in accordance with FASB ASC 855 “ Subsequent Events Effective July 1, 2020, the Company, Jatinder S. Bhogal, Vector Asset Management, Inc., a Canadian entity wholly-owned by Mr. Bhogal (“VAMI”), entered into an Executive Consulting Agreement (“ECA”) whereby Mr. Bhogal, in addition to Mr. Bhogal’s current role as a Director, will serve the Company as its President and Chief Executive Officer. Pursuant to the ECA, which has an initial term of three years with one year extensions thereafter unless otherwise terminated, 1) VAMI will be paid an annual base fee of $410,000, payable in accordance with the Company’s general payroll practices; 2) VAMI is eligible for a discretionary performance-based annual bonus of up to 40% of the then annual base fee in effect; 3) VAMI received a stock option grant to purchase up to 2,500,000 shares of the Company’s common stock at a strike price of $2.60 per share exercisable on, among other methods, a cashless basis prior to up-listing to a national exchange and exercisable for cash thereafter. The stock option vests as to 50% on July 1, 2020 and as to the remaining 50% on July 1, 2021. VAMI assigned and transferred the Stock Option to Mr. Bhogal. The Stock Option is subject to the terms and conditions of the Stock Option Grant and Grant Agreement dated June 29, 2020 with an effective date of July 1, 2020, 2020 by and among the Company, VAMI and Mr. Bhogal. Capitalized terms used in this Item 5 not otherwise defined shall have the meaning ascribed thereto in the ECA. The ECA provides that any party, at its option, may terminate the ECA with or without cause on 30 days prior written notice. If terminated by the Company without cause, subject to delivery to the Company, by each of VAMI and the Assigned Consultant, of an executed written general release of claims in favor of the Company and its affiliates in a form acceptable to the Company (the “ Release Effective July 1, 2020, Mr. John Conklin resigned as the Company’s President and Chief Executive Officer and as a Director. Effective July 1, 2020, Mr. Conklin will be assuming a new executive role with the Company as its Chief Technology Officer (CTO). The terms and conditions of Mr. Conklin’s current employment agreement will remain in full force and effect. The Company accepted the resignations of Steve Horovitz and Dr. Alastair Livesey as members of the Board of Directors and appointed John Rhee to the Board of Directors effective July 1, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 2020 | |
Summary Of Significant Accounting Policies | |
Use of Estimates | 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 | 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 $14,705,621 of cash deposits as of May 31, 2020, including $52,764 in domestic bank accounts and $14,652,857 held in Canadian bank accounts in excess of Canadian Deposit Insurance Corporation insured limits. |
Equipment | 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 Computer equipment and software 3 years Equipment, furniture and fixtures 5 years |
Patent and Trademark Costs | 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 | 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. |
Fair Value of Financial Instruments | 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 Research and product development costs represent costs incurred to develop the Company’s technology, including salaries and benefits for research and product 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 | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“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 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 | 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. |
Segment Reporting | 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 Loss Per Share | Net Loss Per Share The computation of basic earnings per share (“ EPS Following is the computation of basic and diluted net loss per share for the three and nine months ended May 31, 2020 and 2019: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (987,417 ) $ (987,342 ) $ (3,199,393 ) $ (3,501,095 ) Denominator: Weighted average number of common shares outstanding 52,959,323 52,959,323 52,959,323 47,616,857 Basic and diluted EPS $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.07 ) 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 2,935,334 1,271,334 Warrants 19,483,518 19,483,517 19,483,518 19,483,517 Total shares not included in the computation of diluted losses per share 22,418,852 20,754,851 22,418,852 20,754,851 |
Recent Accounting Standards | 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
May 31, 2020 | |
Share-based Compensation (monthly) | |
Schedule of estimated useful lives | The estimated useful lives of depreciable assets are: Estimated Useful Lives Computer equipment and software 3 years Equipment, furniture and fixtures 5 years |
Computation of basic and diluted net loss per share | Following is the computation of basic and diluted net loss per share for the three and nine months ended May 31, 2020 and 2019: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (987,417 ) $ (987,342 ) $ (3,199,393 ) $ (3,501,095 ) Denominator: Weighted average number of common shares outstanding 52,959,323 52,959,323 52,959,323 47,616,857 Basic and diluted EPS $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.07 ) 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 2,935,334 1,271,334 Warrants 19,483,518 19,483,517 19,483,518 19,483,517 Total shares not included in the computation of diluted losses per share 22,418,852 20,754,851 22,418,852 20,754,851 |
Equipment (Tables)
Equipment (Tables) | 9 Months Ended |
May 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Equipment | May 31, August 31, 2020 (Unaudited) 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 (87,542 ) (68,858 ) Equipment, net $ 1,355,276 $ 1,368,929 |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 9 Months Ended |
May 31, 2020 | |
Common Stock And Warrants Tables | |
Warrants outstanding and exercisable | A summary of the Company’s warrants outstanding and exercisable as of May 31, 2020 and August 31, 2019 is as follows: Shares of Common Stock Weighted May 31, August 31, Exercise Description 2020 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 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
May 31, 2020 | |
Stock Options Tables | |
Assumptions | 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: Nine Months Ended May 31, 2020 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 $1.55 |
Stock option activity | A summary of the Company’s stock option activity for the nine months ended May 31, 2020 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term 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 May 31, 2020 2,935,334 4.21 7.66 years 111,690 Exercisable at May 31, 2020 2,010,434 4.23 8.08 years 21,718 |
Share-based compensation cost | 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 and nine months ended May 31, 2020 and 2019: Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 Stock Compensation Expense: SG&A $ 172,219 $ 118,409 $ 516,658 $ 372,260 R&D 262,436 236,817 773,622 723,927 Total $ 434,655 $ 355,226 $ 1,290,280 $ 1,096,187 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at May 31, 2020: Stock Options Outstanding Stock Options Exercisable Weighted Number of Number Average Shares Weighted Weighted of Shares Remaining Weighted Range of Subject to Average Average Subject Contractual Average Exercise Outstanding Contractual Exercise to Options Life Exercise Prices Options Life (Years) Price ($) Exercise (Years) Price ($) 2.32 153,000 9.36 2.32 29,750 9.36 2.32 3.28 7,500 6.46 3.28 7,500 6.46 3.28 3.46 35,000 5.60 3.46 35,000 5.60 3.46 3.54 1,511,000 7.78 3.54 1,108,350 8.74 3.54 4.87 187,500 7.48 4.87 187,500 7.48 4.87 5.35 1,008,000 7.59 5.35 609,000 7.59 5.35 5.94 33,334 0.56 5.94 33,334 0.56 5.94 Total 2,935,334 7.66 4.21 2,010,434 8.08 4.23 |
Lease (Tables)
Lease (Tables) | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Components of lease expenses | The components of Lease expenses are as follows: Three Months Ended Nine Months Ended Operating lease cost $ 6,666 $ 19,998 Short-term lease costs – – Total net lease costs $ 6,666 $ 19,998 |
Supplemental balance sheet information related to Lease | Supplemental balance sheet information related to the Lease is as follows: As of May 31, 2020 As of August 31, 2019 Operating lease right-of-use asset $ 48,198 $ 65,646 Current maturities of operating lease $ 24,272 $ 23,169 Non-current operating lease 24,2112 42,564 Total operating lease liabilities $ 48,484 $ 65,733 Weighted Average remaining lease term (in years): 1.92 2.9 Discount rate: 5.85 % 5.85 % |
Schedule of future lease payments | 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 May 31, 2020 are as follows: Amount 2020 $ 6,600 2021 26,664 2022 18,128 Total lease payments 51,392 Less: Imputed interest (2,908 ) Total lease obligation 48,484 Less: current lease obligations 24,272 Long term lease obligations $ 24,212 |
Basis of Presentation and Org_2
Basis of Presentation and Organization (Details Narrative) | 9 Months Ended |
May 31, 2020USD ($) | |
Basis Of Presentation Organization And Going Concern Details Narrative Abstract | |
State of incorporation | NV |
Date of incorporation | May 5, 1998 |
Cash | $ 14,705,621 |
Working capital | $ 15,156,707 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Aug. 31, 2019 | |
Computers, office equipment and software [Member] | |
Estimated useful lives | 3 years |
Furniture and Fixtures [Member] | |
Estimated useful lives | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Numerator: | ||||
Loss available to common stockholders' | $ (987,417) | $ (987,342) | $ (3,199,393) | $ (3,501,095) |
Denominator: | ||||
Weighted average number of common shares outstanding | 52,959,323 | 52,959,323 | 52,959,323 | 47,616,857 |
Basic and diluted EPS | $ (0.02) | $ (0.02) | $ (0.06) | $ (0.07) |
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 | 2,935,334 | 1,271,334 |
Warrants | 19,483,518 | 19,483,517 | 19,483,518 | 19,483,517 |
Total shares not included in the computation of diluted losses per share | 22,418,852 | 20,754,851 | 22,418,852 | 20,754,851 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) | May 31, 2020USD ($) |
Summary Of Significant Accounting Policies Details Narrative Abstract | |
Cash | $ 14,705,621 |
Domestic bank accounts | 52,764 |
CDIC limit | $ 14,652,857 |
Equipment (Details)
Equipment (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Total equipment | $ 1,442,818 | $ 1,437,787 |
Accumulated depreciation | (87,542) | (68,858) |
Equipment, net | 1,355,276 | 1,368,929 |
Computers, office equipment and software [Member] | ||
Total equipment | 23,709 | 18,678 |
Furniture and Fixtures [Member] | ||
Total equipment | 12,634 | 12,634 |
Product Development and Manufacturing Equipment [Member] | ||
Total equipment | 113,820 | 113,820 |
In process equipment [Member] | ||
Total equipment | $ 1,292,655 | $ 1,292,655 |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||||
Purchase of equipment | $ (5,031) | $ (596,651) | |||
Depreciation Expenses | $ 5,782 | $ 5,209 | $ 18,684 | $ 13,652 | |
Initial payment of equipment | $ (1,292,655) | ||||
Estimated cost | $ 1,803,000 | ||||
Cost of equipment description | The remaining $510,345 is planned to be paid upon completion of the equipment fabrication and factory acceptance sometime before December, 2020. |
Common Stock and Warrants (Deta
Common Stock and Warrants (Details) - $ / shares | 9 Months Ended | |
May 31, 2020 | Aug. 31, 2019 | |
Shares of Common Stock Issuable from Warrants | 19,483,517 | 19,483,517 |
Weighted Average Exercise Price | $ 4.21 | |
Series M warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 246,000 | 246,000 |
Weighted Average Exercise Price | $ 2.34 | $ 2.34 |
Expiration | Dec. 31, 2022 | |
Date of Issuance | Dec. 7, 2015 | |
Series N warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 767,000 | 767,000 |
Weighted Average Exercise Price | $ 3.38 | $ 3.38 |
Expiration | Dec. 31, 2022 | |
Date of Issuance | Dec. 31, 2015 | |
Series P warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 213,500 | 213,500 |
Weighted Average Exercise Price | $ 3.70 | $ 3.70 |
Expiration | Dec. 31, 2022 | |
Date of Issuance | Mar. 25, 2016 | |
Series R warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 468,750 | 468,750 |
Weighted Average Exercise Price | $ 4 | $ 4 |
Expiration | Dec. 31, 2022 | |
Date of Issuance | Jun. 20, 2016 | |
Series S-A warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 300,000 | 300,000 |
Weighted Average Exercise Price | $ 2.53 | $ 2.53 |
Expiration | Dec. 31, 2022 | |
Date of Issuance | Jul. 24, 2017 | |
Series S warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 821,600 | 821,600 |
Weighted Average Exercise Price | $ 3.42 | $ 3.42 |
Expiration | Sep. 29, 2022 | |
Date of Issuance | Sep. 29, 2017 | |
Series T warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 16,666,667 | 16,666,667 |
Weighted Average Exercise Price | $ 1.70 | $ 1.70 |
Expiration | Nov. 26, 2025 | |
Date of Issuance | Nov. 26, 2018 |
Common Stock and Warrants (De_2
Common Stock and Warrants (Details Narrative) - $ / shares | May 31, 2020 | Aug. 31, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 52,959,323 | 52,959,323 |
Common stock, shares outstanding | 52,959,323 | 52,959,323 |
October 10, 2006 [Member] | 2006 Incentive Stock Option Plan [Member] | ||
Reserved for issuance under long term incentive plan | 906,085 |
Stock Options (Details)
Stock Options (Details) | 9 Months Ended |
May 31, 2020$ / shares | |
Minimum [Member] | |
Expected stock price volatility | 82.94% |
Risk-free interest rate | 1.40% |
Expected term (in years) | 4 years 6 months |
Exercise price | $ 2.32 |
Weighted-average grant date fair-value | $ 1.61 |
Maximum [Member] | |
Expected stock price volatility | 86.23% |
Risk-free interest rate | 1.69% |
Expected term (in years) | 5 years 9 months |
Exercise price | $ 3.54 |
Weighted-average grant date fair-value | $ 1.55 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended | |
May 31, 2020 | May 31, 2019 | Aug. 30, 2019 | |
Number of Options | |||
Outstanding Ending | 2,935,334 | ||
Exercisable Ending | 2,010,434 | ||
Weighted Average Exercise Price | |||
Weighted-average exercise price Ending | $ 4.21 | ||
Exercisable Ending | $ 4.23 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding Ending | 7 years 7 months 28 days | ||
Aggregate Intrinsic Value | |||
Outstanding Ending | $ 111,690 | $ 0 | |
Stock Option [Member] | |||
Number of Options | |||
Outstanding Beginning | 2,777,334 | 1,291,334 | 1,291,334 |
Grants | 158,000 | 1,506,000 | |
Forfeitures and cancellations | (20,000) | (20,000) | |
Outstanding Ending | 2,935,334 | 2,777,334 | |
Exercisable Ending | 2,010,434 | ||
Weighted Average Exercise Price | |||
Weighted-average exercise price Beginning | $ 4.31 | $ 5.22 | $ 5.22 |
Grants | 2.36 | 3.54 | |
Forfeitures and cancellations | $ 4.87 | 4.87 | |
Weighted-average exercise price Ending | 4.21 | $ 4.31 | |
Exercisable Ending | $ 4.23 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding Ending | 7 years 7 months 28 days | ||
Exercisable Ending | 8 years 29 days | ||
Aggregate Intrinsic Value | |||
Outstanding Ending | $ 111,690 | ||
Exercisable Ending | $ 21,718 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Stock Compensation Expense: | ||||
SG&A | $ 172,219 | $ 118,409 | $ 516,658 | $ 372,260 |
R&D | 262,436 | 236,817 | 773,622 | 723,927 |
Total stock based compensation expense | $ 434,655 | $ 355,226 | $ 1,290,280 | $ 1,096,186 |
Stock Options (Details 3)
Stock Options (Details 3) | 9 Months Ended |
May 31, 2020$ / sharesshares | |
Number of Shares Subject to Outstanding Options | shares | 2,935,334 |
Weighted average contractural life (years) | 7 years 7 months 28 days |
Weighted-average exercise price | $ / shares | $ 4.21 |
Number of Shares Subject to options exercisable | shares | 2,010,434 |
Weighted average contractural life (years) of options exercisable | 8 years 29 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 4.23 |
$2.32 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 153,000 |
Weighted average contractural life (years) | 9 years 4 months 9 days |
Weighted-average exercise price | $ / shares | $ 2.32 |
Number of Shares Subject to options exercisable | shares | 29,750 |
Weighted average contractural life (years) of options exercisable | 9 years 4 months 9 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 2.32 |
$3.28 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 7,500 |
Weighted average contractural life (years) | 6 years 5 months 16 days |
Weighted-average exercise price | $ / shares | $ 3.28 |
Number of Shares Subject to options exercisable | shares | 7,500 |
Weighted average contractural life (years) of options exercisable | 6 years 5 months 16 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.28 |
$3.46 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 35,000 |
Weighted average contractural life (years) | 5 years 7 months 6 days |
Weighted-average exercise price | $ / shares | $ 3.46 |
Number of Shares Subject to options exercisable | shares | 35,000 |
Weighted average contractural life (years) of options exercisable | 5 years 7 months 6 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.46 |
$3.54 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 1,511,000 |
Weighted average contractural life (years) | 7 years 9 months 11 days |
Weighted-average exercise price | $ / shares | $ 3.54 |
Number of Shares Subject to options exercisable | shares | 1,108,350 |
Weighted average contractural life (years) of options exercisable | 8 years 8 months 26 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.54 |
$4.87 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 187,500 |
Weighted average contractural life (years) | 7 years 5 months 23 days |
Weighted-average exercise price | $ / shares | $ 4.87 |
Number of Shares Subject to options exercisable | shares | 187,500 |
Weighted average contractural life (years) of options exercisable | 7 years 5 months 23 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 4.87 |
$5.35 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 1,008,000 |
Weighted average contractural life (years) | 7 years 7 months 2 days |
Weighted-average exercise price | $ / shares | $ 5.35 |
Number of Shares Subject to options exercisable | shares | 609,000 |
Weighted average contractural life (years) of options exercisable | 7 years 7 months 2 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 5.35 |
$5.94 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 33,334 |
Weighted average contractural life (years) | 6 months 21 days |
Weighted-average exercise price | $ / shares | $ 5.94 |
Number of Shares Subject to options exercisable | shares | 33,334 |
Weighted average contractural life (years) of options exercisable | 6 months 21 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 5.94 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 30, 2019 | |
Closing stock price | $ 3.05 | |||
Option outstanding | 153,000 | |||
Option exercise price | $ 3.05 | |||
Aggregate intrinsic value of options | $ 0 | $ 111,690 | $ 0 | |
Share based compensation expenses not yet recognized | $ 3,391,022 | |||
Share based compensation recognition period | 4 years 2 months 30 days | |||
2006 Incentive Stock Option Plan [Member] | ||||
Stock options approved for grant | 5,000,000 | |||
Stock options available for grant, shares | 906,085 | |||
Net shares issued pursuant to exercises of vested options (due to the cashless exercise feature) | 629,677 | |||
Stock options exercised, total | 1,305,001 | |||
Maturity date | Feb. 7, 2021 | |||
Stock Option [Member] | ||||
Stock options exercise price | $ 4.87 | $ 4.87 | ||
Aggregate intrinsic value of options | $ 111,690 | |||
Nonvested options forfeited, shares | 20,000 | 20,000 | ||
Share based compensation | $ 58,367 | |||
Stock options granted | 0 | 0 | ||
Stock Option [Member] | Consultant [Member] | ||||
Stock options exercise price | $ 3.54 | |||
Stock options granted | 5,000 | |||
Option grant term | 6 years | |||
Stock Option [Member] | Employee [Member] | ||||
Stock options exercise price | $ 2.32 | |||
Stock options granted | 153,000 | |||
Option grant term | 10 years |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - Mr. Bhogal [Member] - Consulting Agreement [Member] - USD ($) | Dec. 02, 2018 | Aug. 07, 2017 | May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 |
Share-based Compensation (monthly) | $ 5,000 | $ 18,750 | ||||
Related party expense | $ 56,250 | $ 56,250 | $ 168,750 | $ 108,750 |
Lease (Details)
Lease (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
May 31, 2020 | May 31, 2020 | |
Notes to Financial Statements | ||
Operating lease cost | $ 6,666 | $ 19,998 |
Short-term lease costs | ||
Total net lease costs | $ 6,666 | $ 19,998 |
Lease (Details 1)
Lease (Details 1) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Notes to Financial Statements | ||
Operating lease right-of-use asset | $ 48,198 | $ 65,646 |
Current maturities of operating lease | 24,272 | 23,169 |
Non-current operating lease | 24,212 | 42,564 |
Total operating lease liabilities | $ 48,484 | $ 65,733 |
Weighted Average remaining lease term (in years): | 1 year 11 months 1 day | 2 years 10 months 25 days |
Discount rate: | 5.85% | 5.85% |
Lease (Details 2)
Lease (Details 2) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Notes to Financial Statements | ||
2020 | $ 6,600 | |
2021 | 26,664 | |
2022 | 18,128 | |
Total lease payments | 51,392 | |
Less: Imputed interest | (2,908) | |
Total operating lease liabilities | 48,484 | $ 65,733 |
Less: current lease obligations | 24,272 | 23,169 |
Long term lease obligations | $ 24,212 | $ 42,564 |
Lease (Details Narrative)
Lease (Details Narrative) | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Lease Term | 3 years |
Lease description | 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 $2,266 during year three. The Company has the sole option to renew the lease for an additional two years through May 1, 2024. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - President and Chief Executive Officer [Member] | 1 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Annual salary | $ | $ 410,000 |
Options granted | shares | 2,500,000 |
Strike Price | $ / shares | $ 2.60 |