Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2020 | Nov. 09, 2020 | Feb. 28, 2020 | |
Document And Entity Information | |||
Entity Registrant Name | SolarWindow Technologies, Inc. | ||
Entity Central Index Key | 0001071840 | ||
Document Type | 10-K | ||
Document Period End Date | Aug. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Is Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 36,464,000 | ||
Entity Common Stock, Shares Outstanding | 52,959,323 | ||
Document Fiscal Period Focus | FY | ||
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
BALANCE SHEETS - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Current assets | ||
Cash | $ 14,151,523 | $ 16,604,011 |
Deferred research and development costs | 574,731 | 580,879 |
Prepaid expenses and other current assets | 56,147 | 46,832 |
Total current assets | 14,782,401 | 17,231,722 |
Operating lease right-of-use asset | 42,212 | 65,646 |
Equipment, net of accumulated depreciation of $93,323 and $68,858, respectively | 1,349,495 | 1,368,929 |
Security deposit | 2,200 | 2,200 |
Total assets | 16,176,308 | 18,668,497 |
Current liabilities | ||
Accounts payable and accrued expenses | 53,428 | 97,549 |
Related party payables | 113,186 | 57,933 |
Current maturities of operating lease | 24,828 | 23,169 |
Total current liabilities | 191,442 | 178,651 |
Non-current operating lease | 17,737 | 42,564 |
Total long term liabilities | 17,737 | 42,564 |
Total liabilities | 209,179 | 221,215 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding | ||
Common stock: $0.001 par value; 300,000,000 shares authorized, 52,959,323 shares issued and outstanding at August 31, 2020 and 2019 | 52,959 | 52,959 |
Additional paid-in capital | 76,039,209 | 71,166,300 |
Retained deficit | (60,125,039) | (52,771,977) |
Total stockholders' equity | 15,967,129 | 18,447,282 |
Total liabilities and stockholders' equity | $ 16,176,308 | $ 18,668,497 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Current assets | ||
Equipment, net of accumulated depreciation | $ 93,323 | $ 68,858 |
Stockholders' equity | ||
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
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Consolidated Statements Of Operations | ||
Revenue | ||
Operating expenses | ||
Selling, general and administrative | 5,323,579 | 4,431,643 |
Research and product development | 2,279,884 | 1,979,222 |
Total operating expenses | 7,603,463 | 6,410,865 |
Loss from operations | (7,603,463) | (6,410,865) |
Other income (expense) | ||
Interest income | 250,401 | 315,344 |
Interest expense | (128,239) | |
Accretion of debt discount | (663,918) | |
Total other income (expense) | 250,401 | (476,813) |
Net loss | $ (7,353,062) | $ (6,887,678) |
Basic and Diluted Loss per Common Share | $ (0.14) | $ (0.14) |
Weighted average number of common shares outstanding - basic and diluted | 52,959,323 | 48,686,720 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - 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 | 3,959,367 | 3,959,367 | ||
Net loss for the year | (6,887,678) | (6,887,678) | ||
Ending Balance, Shares at Aug. 31, 2019 | 52,959,323 | |||
Ending 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 | 4,872,909 | 4,872,909 | ||
Net loss for the year | (7,353,062) | (7,353,062) | ||
Ending Balance, Shares at Aug. 31, 2020 | 52,959,323 | |||
Ending Balance, Amount at Aug. 31, 2020 | $ 52,959 | $ 76,039,209 | $ (60,125,039) | $ 15,967,129 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (7,339,054) | $ (6,887,678) |
Adjustments to reconcile net loss to net cash flows used in operating activities | ||
Depreciation | 24,465 | 18,349 |
Stock based compensation expense | 4,872,909 | 3,959,367 |
Security deposits | (2,200) | |
Accretion of debt discount | 663,918 | |
Changes in operating assets and liabilities: | ||
Deferred research and development costs | 6,148 | (446,904) |
Prepaid expenses and other assets | (9,315) | 11,987 |
Accounts payable and accrued expenses | (44,121) | 3,933 |
Operating lease assets and liabilities | 266 | 87 |
Related party payable | 41,245 | 57,933 |
Interest payable | 76,057 | |
Net cash flows used in operating activities | (2,447,457) | (2,545,151) |
Cash flows used in investing activity | ||
Purchase of equipment | (5,031) | (1,347,664) |
Net cash flows used in investing activity | (5,031) | (1,347,664) |
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 | (2,452,488) | 15,907,185 |
Cash at beginning of period | 16,604,011 | 696,826 |
Cash at end of period | 14,151,523 | 16,604,011 |
Supplemental disclosure of cash flow information: | ||
Interest paid in cash | 52,182 | |
Income taxes paid in cash | ||
Supplemental disclosure of non-cash transactions: | ||
Common stock issued for conversion of note payable | $ 5,200,000 |
Organization
Organization | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 1 - Organization | NOTE 1 – 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 August 31, 2020, the Company had $14,151,523 of cash on hand and working capital of $14,590,959. 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 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 financial or strategic investors. 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 | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 2 - Summary of Significant Accounting Policies | NOTE 2 – Summary of Significant Accounting Policies Principles of Consolidation On July 5, 2019, the Board of Directors voted to dissolve Kinetic Energy Corporation (“KEC”) and New Energy Solar (“NES”). KEC was incorporated on June 19, 2008. NES was incorporated on February 9, 2009. Neither KEC nor NES had operating activity for the year ended August 31, 2019. On August 24, 2020, the Company formed wholly owned SolarWindow Asia (USA) Corp. as the holding company for SolarWindow Asia Co. Ltd., a company formed in the Republic of Korea for the purpose of expansion into the Asian markets. As of August 31, 2020, the Company had not capitalized the Korean subsidiaries and there were no transactions related to these entities during the year ended August 31, 2020. As a result, the financial statements presented are solely those of SolarWindow Technologies, Inc. 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 $14,151,523 of cash deposits as of August 31, 2020, including $282,042 in domestic bank accounts and $13,869,481 held in Canadian bank accounts in excess of Canadian Deposit Insurance Corporation insured limits. Leases The Company recognizes their leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Equipment Fixed assets are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in that period. Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: Estimated Useful Lives (in years) Computer equipment and software 3 Equipment, furniture and fixtures 5 Patent and Trademark Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Fair Value Measurements The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 3 inputs. Fair Value of Financial Instruments The carrying value of cash and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Company’s notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. Research and Product Development Research and product development costs represent costs incurred to develop the Company’s technology, including salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, supplies, equipment purchase and repair and other costs. Research and product development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with 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 6 – Common Stock and Warrants” and “NOTE 7 - 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 Income (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 years ended August 31, 2020 and 2019: Years Ended August 31, 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (7,353,062 ) $ (6,887,678 ) Denominator: Weighted average number of common shares outstanding 52,959,323 48,986,720 Basic and diluted EPS $ (0.14 ) $ (0.14 ) 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 7,804,734 2,777,334 Warrants 19,483,517 19,483,517 Total shares not included in the computation of diluted losses per share 27,288,251 22,260,851 Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after August 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company will early adopt ASU 2020-06 beginning with our fiscal year starting on September 1, 2021. We do not expect the adoption of ASU 2020-06 to have a material impact on our consolidated financial statements. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The Company adopted ASU 2017-09 beginning September 1, 2018 with no impact on its Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company early adopted ASU No. 2016-02 beginning September 1, 2018. The adoption of the standard did not impact the Company’s consolidated net earnings and had no impact on cash flows. As of May 1, 2019, the Company entered into an operating lease for office space. See “NOTE 8 – Lease” for additional information. 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 | 12 Months Ended |
Aug. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
NOTE 3 - Equipment | NOTE 3 – Equipment Equipment consists of the following: August 31, 2020 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 (93,323 ) (68,858 ) Equipment, net $ 1,349,495 $ 1,368,929 During the years ended August 31, 2020 and 2019, the Company purchased $5,031 and $1,347,664, respectively, of equipment. During the years ended August 31, 2020 and 2019, the Company recognized depreciation expense of $24,465 and $18,349, 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 will provide a significant increase in our ability to develop and showcase prototype products and components at or near “commercial size.” The remaining $510,345 will be paid upon the completion of the equipment once the final specifications have been determined pending optimization of the Company’s product iteration specific to this equipment. |
Debt
Debt | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 4 - Debt | NOTE 4 - Debt As of August 31, 2018, the Company had the following outstanding debt balances which were converted to Units (defined below) during the year ended August 31, 2019: Issue Date Maturity Date Principal Debt Discount Balance Interest Payable As of August 31, 2018: March 2015 Loan as amended 3/4/2015 12/31/2019 $ 600,000 $ - $ 600,000 $ 186,797 2013 Note as amended 10/7/2013 12/31/2019 3,000,000 (663,918 ) 2,336,082 1,337,146 $ 3,600,000 $ (663,918 ) $ 2,936,082 $ 1,523,943 March 2015 Loan as Amended On March 4, 2015, the Company entered into a Bridge Loan Agreement with 1420468 Alberta Ltd. (which has since been merged with and into Kalen Capital Corporation, a British Columbia corporation wholly-owned by our former Chairman, Harmel S. Rayat (the “ Investor March 2015 Loan On November 3, 2017, the Company entered into the Third Amendment related to the March 2015 Loan pursuant to which the Company and the Investor amended the March 2015 loan to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5%. On November 26, 2018, $798,566 of the March 2015 Loan was converted in exchange for 532,377 Units pursuant to the November 2018 Private Placement except for $7,922 of accrued interest which the Company agreed to repay from proceeds from the November 2018 Private Placement. See “Note 5 – November 2018 Private Placement” for additional information. During the year ended August 31, 2019, the Company recognized $19,691 of interest expense. 2013 Note as Amended On October 7, 2013, the Company sold to the Investor an unsecured Convertible Promissory Note (the “ 2013 Note On November 3, 2017, the Company entered into the Third Amendment related to the 2013 Note pursuant to which the Company and the Investor amended the 2013 Note to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5% and all outstanding warrants held by the Investor had their maturity date extended to December 31, 2022, resulting in an additional debt discount of $1,074,265 as of November 3, 2017. The modification did not result in a gain or loss due to the related party nature of the transaction. During the year ended August 31, 2019, the Company recognized $108,548 of interest expense. Accretion of the debt discount related to the 2013 Note as amended amounted to $663,918 during the year ended August 31, 2019. |
November 2018 Private Placement
November 2018 Private Placement | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 5 - November 2018 Private Placement | NOTE 5 – November 2018 Private Placement On November 26, 2018, the Company completed a self-directed offering (the “ November 2018 Private Placement Unit Series T Warrant The Series T Warrants were accounted for pursuant to ASC 470-20-25-2. The relative fair value of the common stock was estimated to be $13,687,151. The relative fair value of the Series T Warrants was estimated to be $11,312,849 as determined based on the relative fair value allocation of the proceeds received. The Series T Warrants were valued using the Black-Scholes option pricing model using the following variables: market price of common stock - $2.94 per share; estimated volatility – 85.85%; 7-year risk free interest rate – 2.97%; expected dividend rate - 0% and expected life - 7 years. |
Common Stock and Warrants
Common Stock and Warrants | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 6 - Common Stock and Warrants | NOTE 6 – Common Stock and Warrants Common Stock At August 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 6,036,685 shares reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “ 2006 Plan During the year ended August 31, 2019, the Company completed the November 2018 Private Placement of 16,666,667 units at a price of $1.50 per unit. Each unit consisted of one share of common stock and one Series T Stock Purchase Warrant to purchase one (1) share of common stock at an exercise price of $1.70 per share for a period of seven (7) years. See “NOTE 5 – November 2018 Private Placement” for additional information. 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 August 31, 2020 and 2019 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average August 31, Exercise Date Of Description 2020 2019 Price 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 | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 7 - Stock Options | NOTE 7 - Stock Options Stock option grants pursuant to the 2006 Plan vest either immediately or over zero to five years and expire from six to ten years after the date of grant. Stockholders previously approved 15,000,000 shares for grant under the 2006 Plan, of which 6,036,685 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 August 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: Years Ended August 31, 2020 2019 Expected dividend yield – – Expected stock price volatility 82.94 – 99.44 % 87.42 – 87.84 % Risk-free interest rate 0.08 – 1.69 % 1.84 % Expected term (in years) 1.87 – 5.75 4.5 – 5.0 Exercise price $ 2.32 – 8.00 $ 3.54 Weighted-average grant date fair-value $ 1.15 – 1.84 $ 2.35 – 2.43 A summary of the Company’s stock option activity for the years ended August 31, 2020 and 2019 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value ($) Outstanding at August 31, 2018 1,291,334 5.22 Grants 1,506,000 3.54 Forfeitures and cancellations (20,000 ) 4.87 Outstanding at August 31, 2019 2,777,334 4.31 Grants 5,158,000 4.06 Forfeitures and cancellations (130,600 ) 3.54 Outstanding at August 31, 2020 7,804,734 4.16 5.54 3,030,518 Exercisable at August 31, 2020 3,853,734 3.64 6.54 1,526,908 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 August 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 $3.66 on August 30, 2020 and 4,075,900 outstanding options have an exercise price below $3.66 per share, as of August 31, 2020, there is $3,030,518 and $1,526,908 of intrinsic value to the totality of the Company’s outstanding stock options and vested options, respectively. Year Ended August 31, 2020 On August 31, 2020, the Company’s Board granted 2,500,000 options to John Rhee, Director and CEO of our Korean subsidiary with an exercise price of $3.66 as to 1,000,000 options, $6.00 as to 800,000 options and $8.00 as to 700,000 options, exercisable on a cashless basis any time prior to the Company’s listing of any of its securities for trading on a national stock exchange, three year term and vesting at the rate of 500,000 on the date of grant, 800,000 on the six month anniversary, 700,000 on the one-year anniversary and 500,000 on the eighteen month anniversary. On July 1, 2020, the Company’s Board granted 2,500,000 options to Jatinder S. Bhogal with an exercise price of $2.60, exercisable on a cashless basis any time prior to the Company’s listing of any of its securities for trading on a national stock exchange, six year term and immediate vesting as to 1,250,000 options and July 1, 2021 as to 1,250,000 options. 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 On September 16, 2019, the Board granted 5,000 options to a consultant with an exercise price of $3.54, vesting at the rate of 1/20 th During the year ended August 31, 2020, there were 130,600 vested options forfeited. Year Ended August 31, 2019 On July 5, 2019, the Company’s Board granted 498,000 options to directors and employees with an exercise price of $3.54, vesting at the rate of 1/20 th Due to his resignation from the Board of Directors on October 22, 2018, Joseph Sierchio forfeited 20,000 unvested stock options with an exercise price of $4.87 which resulted in the Company reversing previously recorded stock compensation expense related to the vesting of said options in the amount of $58,367. 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 years ended August 31, 2020 and 2019: Year Ended August 31, 2020 2019 Stock Compensation Expense: SG&A $ 3,788,538 $ 2,993,532 R&D 1,084,371 965,835 Total $ 4,872,909 $ 3,959,367 As of August 31, 2020, the Company had $7,116,483 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 4.00 years. The following table summarizes information about stock options outstanding and exercisable at August 31, 2020: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Subject to Outstanding Options Weighted Average Contractual Life (years) Weighted Average Exercise Price ($) Number of Shares Subject To Options Exercise Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) 2.32 153,000 9.11 2.32 42,500 9.11 2.32 2.60 2,500,000 5.84 2.60 1,250,000 5.84 2.60 3.28 7,500 6.21 3.28 7,500 6.21 3.28 3.46 35,000 5.35 3.46 35,000 5.35 3.46 3.54 1,380,400 7.78 3.54 1,125,900 8.43 3.54 3.66 1,000,000 3.00 3.66 500,000 3.00 3.66 4.87 187,500 7.23 4.87 187,500 7.23 4.87 5.35 1,008,000 7.34 5.35 672,000 7.34 5.35 5.94 33,334 0.31 5.94 33,334 0.31 5.94 6.00 800,000 3.00 6.00 - 3.00 6.00 8.00 700,000 3.00 8.00 - 3.00 8.00 Total 7,804,734 5.54 4.16 3,853,734 6.54 3.64 |
Lease
Lease | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 8 - Lease | NOTE 8 – 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 August 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: Year Ended August 31, 2020 2020 2019 Operating lease cost $ 26,664 $ 8,888 Short-term lease costs - - Total net lease costs $ 26,664 $ 8,888 Supplemental balance sheet information related to the Lease is as follows: As of August 31, 2020 2019 Operating lease right-of-use asset $ 42,212 $ 65,646 Current maturities of operating lease $ 24,828 $ 23,169 Non-current operating lease 17,736 42,564 Total operating lease liabilities $ 42,564 $ 65,733 Weighted Average remaining lease term (in years): 1.67 2.9 Discount rate: - 5.85 % In September 2020, the Company, through its wholly owned subsidiaries, SolarWindow Asia (USA) Corp. and SolarWindow Asia Co., Ltd., entered a lease for office space in South Korea. The lease has a term of one year from September 23, 2020 through September 23, 2021 with monthly payments of approximately $1,200. 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 August 31, 2020 are as follows: Amount 2021 26,664 2022 18,128 Total lease payments 44,792 Less: Imputed interest (2,228 ) Total lease obligation 42,564 Less: current lease obligations 24,828 Long term lease obligations $ 17,736 |
Transactions with Related Perso
Transactions with Related Persons | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 9 - Transactions with Related Persons | NOTE 9 - Transactions with Related Persons A related party with respect to the Company is generally defined as any person (i) (and, if a natural person, inclusive of his or her immediate family) that holds 10% or more of the Company’s securities, (ii) that is part of the Company’s management, (iii) that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. On August 7, 2017, the Company appointed Jatinder Bhogal to the Board of Directors. Mr. Bhogal has provided consulting services to the Company through his wholly owned company, Vector Asset Management, Inc., pursuant to a Consulting Agreement dated February 1, 2014, as amended on November 11, 2016 and December 1, 2018 (Amendment No. 2). On July 1, 2020 the Company and VAMI entered into an Executive 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. 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 and pursuant to the ECA, Mr. Bhogal receives 34,167 per month. Mr. Bhogal also incurs expenses on behalf of the Company which are reimbursed according to the Company’s expense report policy. The Company recognized cash compensation expense in connection with the Consulting Agreements and ECA of $255,833 and $183,750 during the years ended August 31, 2020 and 2019, respectively. As of August 31, 2020, the Company recognized a related party payable to Mr. Bhogal of $48,758. During the year ended August 31, 2020, Talia Jevan Properties, Inc., a British Columbia corporation wholly-owned by the Investor, made advances on behalf of the Company totaling $210,415 and $15,497 during the years ended August 31, 2020 and 2019, respectively. The Company repaid Talia Jevan Properties $172,661 and $0 during the years ended August 31, 2020 and 2019, respectively. As of August 31, 2020, the Company owed Talia Jevan Properties, Inc. $53,251. The law firm of Sierchio & Partners, LLP, of which Joseph Sierchio, one of the Company’s directors, was a principal, had provided counsel to the Company since its inception. Beginning in September 2016, Mr. Sierchio became a partner at Satterlee Stephens LLP (“Satterlee”). Concurrently with Mr. Sierchio’s move to Satterlee, the Company engaged with Satterlee to provide legal counsel with Mr. Sierchio maintaining his role as the Company’s primary attorney. Mr. Sierchio resigned from the Board effective October 22, 2018, and was reappointed on October 1, 2020. Mr. Sierchio has maintained his role as the Company’s General Counsel. During our fiscal year ended August 31, 2019 (from September 1, 2018 through October 22, 2018, the date of Mr. Sierchio’s resignation from the Board), the Company recognized $3,480 of fees for legal services billed by firms associated with Mr. Sierchio. On November 26, 2018, the Company completed the November 2018 Private Placement to accredited investors of 16,666,667 Units of the Company’s equity securities at a price of $1.50 per Unit with each Unit comprised of (a) one share of common stock; and (b) one Series T Warrant to purchase one share of common stock at a price of $1.70 per share for a period of seven (7) years. The Investor participated in the November 2018 Private Placement by purchasing 13,100,000 Units in exchange for cash of $19,650,000 and converting $5,200,000 owing under the March 2015 Loan and 2013 Note into 3,466,667 Units. 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. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 10 - Income Taxes | NOTE 10 – Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted into law. The Act applies to corporations generally beginning with taxable years starting after December 31, 2017 and reduces the corporate tax rate from a graduated set of rates with a maximum 35% tax rate to a flat 21% tax rate. Additionally, the Act introduced other changes that impacted corporations, including a net operating loss (“NOL”) deduction annual limitation, an interest expense deduction annual limitation, elimination of the alternative minimum tax, and immediate expensing of the full cost of qualified property. The Act also introduced an international tax reform that moved the U.S. toward a territorial system, in which income earned in other countries will generally not be subject to U.S. taxation. However, the accumulated foreign earnings of certain foreign corporations were subject to a one-time transition tax, which can be elected to be paid over an eight-year tax transition period, using specified percentages, or in one lump sum. NOL and foreign tax credit (“FTC”) carryforwards can be used to offset the transition tax liability. This change had no impact on the Company as it has not earned taxable income in the past and it has significant NOL carryforwards. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at August 31, 2020 and 2019 are as follows: 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 6,598,870 $ 5,901,666 Capitalized research and development 1,069,124 1,014,380 Depreciation 1,762 (7,353 ) Stock based compensation 3,006,736 1,983,425 Research and development credit carry forward 657,737 599,646 Total deferred tax assets 11,334,229 9,491,764 Less: valuation allowance (11,334,229 ) (9,491,764 ) Net deferred tax asset $ - $ - The net increase in the valuation allowance for deferred tax assets was $1,842,465 and $1,594,583 during the year ended August 31, 2020 and 2019, respectively. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2020 available to offset future federal taxable income, if any, of $31,423,193. These carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. In addition, the Company has research and development tax credit carry forwards of $657,737 at August 31, 2020, which are available to offset federal income taxes. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock. The effects of state income taxes were insignificant for the years ended August 31, 2020 and 2019. The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 21% for the year ended August 31, 2020 and 2019: 2020 2019 Income tax benefit at statutory rate $ 1,544,143 $ 1,446,412 Permanent differences 240,231 69,190 Research and development credit 58,091 78,981 Change in valuation allowance (1,842,465 ) (1,594,583 ) $ - $ - The fiscal years 2018 through 2020 remain open to examination by federal authorities and other jurisdictions in which the Company operates. The Company does not have any uncertain tax positions at August 31, 2020 and 2019 that would affect its effective tax rate. The Company does not anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months. Because the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. If and when applicable, the Company will recognize interest and penalties as part of income tax expense. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
NOTE 11 - Commitments and Contingencies | NOTE 11 – Commitments and Contingencies The Company entered into an operating lease for office space with a term from May 1, 2019 through May 1, 2022 with monthly rent due of $2,200 for the first two years and $2,266 during year three. For additional information, see “Note 8 – Lease” located in the footnotes to our financial statements. In September 2020, the Company, through its wholly owned subsidiaries, SolarWindow Asia (USA) Corp. and SolarWindow Asia Co., Ltd., entered a lease for office space in South Korea. The lease has a term of one year from September 23, 2020 through September 23, 2021 with monthly payments of approximately $1,200. During 2019 the Company made payments totaling $1,292,655 towards the purchase of manufacturing equipment with an estimated total cost of $1,803,000. The remaining $510,345 will be paid upon the completion of the equipment once the final specifications have been determined pending optimization of the Company’s product iteration specific to this equipment. For additional information, see “Note 3 – Equipment” located in the footnotes to our financial statements. COVID-19 In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11, 2020, the World Health Organization declared the COVID-19 virus a global pandemic and on March 13, 2020, President Donald J. Trump declared the virus a national emergency in the United States. This highly contagious disease has spread to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers, disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. It has caused a disruption of the normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis. The pandemic may adversely affect our operations, our employees and our employee productivity. It may also impact the ability of our subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance. Our employees are working remotely and using various technologies to perform their functions. In reaction to the spread of COVID-19 in the United States, many businesses have instituted social distancing policies, including the closure of offices and worksites and deferring planned business activity. The disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital. Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, we may experience a material adverse effect on our business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Aug. 31, 2020 | |
Subsequent Events [Abstract] | |
NOTE 12 - Subsequent Events | NOTE 12 – Subsequent Events Management has reviewed material events subsequent of the period ended August 31, 2020 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 annual report. From September 1 – October 26, 2020, the Company made capital contributions of $78,000 to SolarWindow Asia Co., Ltd., a Korean foreign direct investment company. The Board has approved an additional $753,000 for transfer to the Korean subsidiary. On October 20, 2020, the Company settled all outstanding related party payables to Talia Jevan Properties, Inc., by making a payment of $53,251. On October 19, 2020, the Company granted 50,000 options to Joesph Sierchio in connection with his appointment to the Board. The options have an exercise price of $3.42, vest as to 12,500 immediately and 12,500 each anniversary thereafter and expires on October 19, 2026. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 31, 2020 | |
Summary Of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation On July 5, 2019, the Board of Directors voted to dissolve Kinetic Energy Corporation (“KEC”) and New Energy Solar (“NES”). KEC was incorporated on June 19, 2008. NES was incorporated on February 9, 2009. Neither KEC nor NES had operating activity for the year ended August 31, 2019. On August 24, 2020, the Company formed wholly owned SolarWindow Asia (USA) Corp. as the holding company for SolarWindow Asia Co. Ltd., a company formed in the Republic of Korea for the purpose of expansion into the Asian markets. As of August 31, 2020, the Company had not capitalized the Korean subsidiaries and there were no transactions related to these entities during the year ended August 31, 2020. As a result, the financial statements presented are solely those of SolarWindow Technologies, Inc. |
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 $14,151,523 of cash deposits as of August 31, 2020, including $282,042 in domestic bank accounts and $13,869,481 held in Canadian bank accounts in excess of Canadian Deposit Insurance Corporation insured limits. |
Leases | Leases The Company recognizes their leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. |
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 (in years) Computer equipment and software 3 Equipment, furniture and fixtures 5 |
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 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 6 – Common Stock and Warrants” and “NOTE 7 - 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 Income (Loss) Per Share | Net Income (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 years ended August 31, 2020 and 2019: Years Ended August 31, 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (7,353,062 ) $ (6,887,678 ) Denominator: Weighted average number of common shares outstanding 52,959,323 48,986,720 Basic and diluted EPS $ (0.14 ) $ (0.14 ) 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 7,804,734 2,777,334 Warrants 19,483,517 19,483,517 Total shares not included in the computation of diluted losses per share 27,288,251 22,260,851 |
Recent Accounting Standards | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after August 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company will early adopt ASU 2020-06 beginning with our fiscal year starting on September 1, 2021. We do not expect the adoption of ASU 2020-06 to have a material impact on our consolidated financial statements. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The Company adopted ASU 2017-09 beginning September 1, 2018 with no impact on its Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company early adopted ASU No. 2016-02 beginning September 1, 2018. The adoption of the standard did not impact the Company’s consolidated net earnings and had no impact on cash flows. As of May 1, 2019, the Company entered into an operating lease for office space. See “NOTE 8 – Lease” for additional information. 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) | 12 Months Ended |
Aug. 31, 2020 | |
Summary Of Significant Accounting Policies Tables Abstract | |
Estimated useful lives | The estimated useful lives of depreciable assets are: Estimated Useful Lives (in years) Computer equipment and software 3 Equipment, furniture and fixtures 5 |
Computation of basic and diluted net loss per share | Following is the computation of basic and diluted net loss per share for the years ended August 31, 2020 and 2019: Years Ended August 31, 2020 2019 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (7,353,062 ) $ (6,887,678 ) Denominator: Weighted average number of common shares outstanding 52,959,323 48,986,720 Basic and diluted EPS $ (0.14 ) $ (0.14 ) 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 7,804,734 2,777,334 Warrants 19,483,517 19,483,517 Total shares not included in the computation of diluted losses per share 27,288,251 22,260,851 |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Equipment | Equipment consists of the following: August 31, 2020 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 (93,323 ) (68,858 ) Equipment, net $ 1,349,495 $ 1,368,929 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Debt | |
Schedule of debt outstanding | As of August 31, 2018, the Company had the following outstanding debt balances which were converted to Units (defined below) during the year ended August 31, 2019: Issue Date Maturity Date Principal Debt Discount Balance Interest Payable As of August 31, 2018: March 2015 Loan as amended 3/4/2015 12/31/2019 $ 600,000 $ - $ 600,000 $ 186,797 2013 Note as amended 10/7/2013 12/31/2019 3,000,000 (663,918 ) 2,336,082 1,337,146 $ 3,600,000 $ (663,918 ) $ 2,936,082 $ 1,523,943 |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Common Stock And Warrants Tables | |
Warrants outstanding and exercisable | A summary of the Company’s warrants outstanding and exercisable as of August 31, 2020 and 2019 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average August 31, Exercise Date Of Description 2020 2019 Price 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) | 12 Months Ended |
Aug. 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: Years Ended August 31, 2020 2019 Expected dividend yield – – Expected stock price volatility 82.94 – 99.44 % 87.42 – 87.84 % Risk-free interest rate 0.08 – 1.69 % 1.84 % Expected term (in years) 1.87 – 5.75 4.5 – 5.0 Exercise price $ 2.32 – 8.00 $ 3.54 Weighted-average grant date fair-value $ 1.15 – 1.84 $ 2.35 – 2.43 |
Stock option activity | A summary of the Company’s stock option activity for the years ended August 31, 2020 and 2019 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value ($) Outstanding at August 31, 2018 1,291,334 5.22 Grants 1,506,000 3.54 Forfeitures and cancellations (20,000 ) 4.87 Outstanding at August 31, 2019 2,777,334 4.31 Grants 5,158,000 4.06 Forfeitures and cancellations (130,600 ) 3.54 Outstanding at August 31, 2020 7,804,734 4.16 5.54 3,030,518 Exercisable at August 31, 2020 3,853,734 3.64 6.54 1,526,908 |
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 years ended August 31, 2020 and 2019: Year Ended August 31, 2020 2019 Stock Compensation Expense: SG&A $ 3,788,538 $ 2,993,532 R&D 1,084,371 965,835 Total $ 4,872,909 $ 3,959,367 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at August 31, 2020: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Subject to Outstanding Options Weighted Average Contractual Life (years) Weighted Average Exercise Price ($) Number of Shares Subject To Options Exercise Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) 2.32 153,000 9.11 2.32 42,500 9.11 2.32 2.60 2,500,000 5.84 2.60 1,250,000 5.84 2.60 3.28 7,500 6.21 3.28 7,500 6.21 3.28 3.46 35,000 5.35 3.46 35,000 5.35 3.46 3.54 1,380,400 7.78 3.54 1,125,900 8.43 3.54 3.66 1,000,000 3.00 3.66 500,000 3.00 3.66 4.87 187,500 7.23 4.87 187,500 7.23 4.87 5.35 1,008,000 7.34 5.35 672,000 7.34 5.35 5.94 33,334 0.31 5.94 33,334 0.31 5.94 6.00 800,000 3.00 6.00 - 3.00 6.00 8.00 700,000 3.00 8.00 - 3.00 8.00 Total 7,804,734 5.54 4.16 3,853,734 6.54 3.64 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
Components of lease expenses | The components of Lease expenses are as follows: Year Ended August 31, 2020 2020 2019 Operating lease cost $ 26,664 $ 8,888 Short-term lease costs - - Total net lease costs $ 26,664 $ 8,888 |
Supplemental balance sheet information related to Lease | Supplemental balance sheet information related to the Lease is as follows: As of August 31, 2020 2019 Operating lease right-of-use asset $ 42,212 $ 65,646 Current maturities of operating lease $ 24,828 $ 23,169 Non-current operating lease 17,736 42,564 Total operating lease liabilities $ 42,564 $ 65,733 Weighted Average remaining lease term (in years): 1.67 2.9 Discount rate: - 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 August 31, 2020 are as follows: Amount 2021 26,664 2022 18,128 Total lease payments 44,792 Less: Imputed interest (2,228 ) Total lease obligation 42,564 Less: current lease obligations 24,828 Long term lease obligations $ 17,736 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Notes to Financial Statements | |
Deferred income taxes | Significant components of the Company’s deferred tax assets at August 31, 2020 and 2019 are as follows: 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 6,598,870 $ 5,901,666 Capitalized research and development 1,069,124 1,014,380 Depreciation 1,762 (7,353 ) Stock based compensation 3,006,736 1,983,425 Research and development credit carry forward 657,737 599,646 Total deferred tax assets 11,334,229 9,491,764 Less: valuation allowance (11,334,229 ) (9,491,764 ) Net deferred tax asset $ - $ - |
Schedule of effective income tax rate reconciliation | The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 21% for the year ended August 31, 2020 and 2019: 2020 2019 Income tax benefit at statutory rate $ 1,544,143 $ 1,446,412 Permanent differences 240,231 69,190 Research and development credit 58,091 78,981 Change in valuation allowance (1,842,465 ) (1,594,583 ) $ - $ - |
Organization (Details Narrative
Organization (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2018 | |
Basis Of Presentation Organization And Going Concern Details Narrative Abstract | |||
State of incorporation | NV | ||
Date of incorporation | May 5, 1998 | ||
Cash | $ 14,151,523 | $ 16,604,011 | $ 696,826 |
Working capital | $ 14,590,959 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Aug. 31, 2020 | |
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 ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Numerator: | ||
Loss available to common stockholders' | $ (7,353,062) | $ (6,887,678) |
Denominator: | ||
Weighted average number of common shares outstanding | 52,959,323 | 48,686,720 |
Basic and diluted EPS | $ (0.14) | $ (0.14) |
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 | 7,804,734 | 2,777,334 |
Warrants | 19,483,517 | 19,483,517 |
Total shares not included in the computation of diluted losses per share | 27,288,251 | 22,260,851 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2018 |
Summary Of Significant Accounting Policies Details Narrative Abstract | |||
Cash | $ 14,151,523 | $ 16,604,011 | $ 696,826 |
Domestic bank accounts | 282,042 | ||
FDIC insured limits | $ 13,869,481 |
Equipment (Details)
Equipment (Details) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Total equipment | $ 1,442,818 | $ 1,437,787 |
Accumulated depreciation | (93,323) | (68,858) |
Equipment, net | 1,349,495 | 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 ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Purchase of equipment | $ (5,031) | $ (1,347,664) |
Depreciation expense | 24,465 | $ 18,349 |
Initial payment of equipment | (1,292,655) | |
Estimated cost | $ 1,803,000 | |
Cost of equipment description | The remaining $510,345 will be paid upon the completion of the equipment once the final specifications have been determined pending optimization of the Company’s product iteration specific to this equipment |
Debt (Details)
Debt (Details) | 12 Months Ended |
Aug. 31, 2020USD ($) | |
Principal | $ 3,600,000 |
Debt Discount | (663,918) |
Balance | 2,936,082 |
Interest Payable | $ 1,523,943 |
March 2015 Loan as amended [Member] | |
Issue Date | Mar. 4, 2015 |
Maturity Date | Dec. 31, 2019 |
Principal | $ 600,000 |
Debt Discount | |
Balance | 600,000 |
Interest Payable | $ 186,797 |
2013 Note as amended [Member] | |
Issue Date | Oct. 7, 2013 |
Maturity Date | Dec. 31, 2019 |
Principal | $ 3,000,000 |
Debt Discount | (663,918) |
Balance | 2,336,082 |
Interest Payable | $ 1,337,146 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Nov. 03, 2017 | Nov. 03, 2017 | Mar. 04, 2015 | Oct. 07, 2013 | Nov. 26, 2018 | Aug. 31, 2020 | Aug. 31, 2019 |
Accretion of debt discount | $ 663,918 | ||||||
Interest expense | 128,239 | ||||||
Bridge Loan One [Member] | |||||||
Proceeds from loan payable | $ 600,000 | ||||||
Interest rate | 7.00% | ||||||
Debt default, interest rate | 15.00% | ||||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | Warrant [Member] | |||||||
Debt instrument maturity date | Dec. 31, 2022 | ||||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | Investor [Member] | |||||||
Debt discount | $ 1,074,265 | $ 1,074,265 | |||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | Third Amendment to the March 2015 Loan [Member] | Investor [Member] | |||||||
Interest rate | 10.50% | ||||||
Debt instrument maturity date | Dec. 31, 2019 | ||||||
March 2015 Loan [Member] | |||||||
Debt conversion converted instrument, shares issued | 532,377 | ||||||
Debt conversion converted instrument, Amount | $ 798,566 | ||||||
Accrued interest | $ 7,922 | ||||||
March 2015 Loan as amended [Member] | |||||||
Interest expense | 19,691 | ||||||
Two Thousand Note As Amended [Member] | |||||||
Interest expense | $ 108,548 | ||||||
Debt conversion converted instrument, shares issued | 2,934,290 | ||||||
Debt conversion converted instrument, Amount | $ 4,401,434 | ||||||
Accrued interest | $ 44,260 | ||||||
2015 Bridge Loan Agreement [Member] | Investor [Member] | |||||||
Interest rate | 10.50% | ||||||
Debt instrument maturity date | Dec. 31, 2019 | ||||||
Convertible Promissory Note [Member] | |||||||
Proceeds from loan payable | $ 3,000,000 | ||||||
Interest rate | 7.00% | ||||||
Debt instrument, terms of conversion feature | The Investor may elect to convert principal and accrued interest into units of the Company's equity securities, with each Unit consisting of (a) one share of common stock; and (b) one Stock Purchase Warrant for the purchase of one share of common stock. The conversion price for each Unit is the lesser of (i) $1.37; or (ii) 70% of the 20 day average closing price of the Company's common stock prior to conversion, subject to a floor of $1.00 with the exercise price of each Warrant being equal to 60% of the 20 day average closing price of the Company's common stock prior to conversion. |
November 2018 Private Placeme_2
November 2018 Private Placement (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 26, 2018 | Aug. 31, 2020 | Aug. 31, 2019 | |
November 2018 Private Placement units issued in exchange for convertible debt, Amount | $ 5,200,000 | ||
Interest payable to related party | $ 52,182 | ||
Risk free interest rate | 1.84% | ||
November 2018 Private Placement [Member] | |||
Issuance of common stock shares to purchase unit | 16,666,667 | ||
Price per unit | $ 1.50 | ||
Unit price, description | Company’s equity securities at a price of $1.50 per Unit with each Unit comprised of (a) one share of common stock; and (b) one Series T Warrant to purchase one share of common stock at a price of $1.70 per share for a period of seven (7) years. | ||
November 2018 Private Placement units issued, Shares | 13,200,000 | ||
November 2018 Private Placement units issued, Amount | $ 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 | $ 5,200,000 | ||
Number of shares unit exchange for cash | 13,200,000 | ||
Relative fair value of common stock | 13,687,151 | ||
Relative fair value of Series T Warrants | $ 11,312,849 | ||
Market price per share | $ 2.94 | ||
Estimated volatility rate | 85.85% | ||
Risk free interest rate | 2.97% | ||
Expected dividend rate | 0.00% | ||
Expected life | 7 years | ||
Kalen [Member] | November 2018 Private Placement [Member] | |||
Capital corporation purchased units | 13,100,000 |
Common Stock and Warrants (Deta
Common Stock and Warrants (Details) - $ / shares | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Shares of Common Stock Issuable from Warrants | 19,483,517 | 19,483,517 |
Weighted Average Exercise Price | $ 4.16 | |
Series M warrants [Member] | ||
Shares of Common Stock Issuable from Warrants | 246,000 | 246,000 |
Weighted Average Exercise Price | $ 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 | |
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 | |
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 | |
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 | |
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 | |
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 | |
Expiration | Nov. 26, 2025 | |
Date of Issuance | Nov. 26, 2018 |
Common Stock and Warrants (De_2
Common Stock and Warrants (Details Narrative) - $ / shares | 12 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2020 | |
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 |
2006 Incentive Stock Option Plan [Member] | ||
Reserved for issuance under long term incentive plan | 6,036,685 | |
November 2018 Private Placement [Member] | ||
Shares issued under private placerment | 16,666,667 | |
Shares issued price per share | $ 1.50 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Expected dividend yield | ||
Risk-free interest rate | 1.84% | |
Exercise price | $ 3.54 | |
Minimum [Member] | ||
Expected stock price volatility | 82.94% | 87.42% |
Risk-free interest rate | 0.08% | |
Expected term (in years) | 1 year 10 months 14 days | 4 years 6 months |
Exercise price | $ 2.32 | |
Weighted-average grant date fair-value | $ 1.15 | $ 2.35 |
Maximum [Member] | ||
Expected stock price volatility | 99.44% | 87.84% |
Risk-free interest rate | 1.69% | |
Expected term (in years) | 5 years 9 months | 5 years |
Exercise price | $ 8 | |
Weighted-average grant date fair-value | $ 1.84 | $ 2.43 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Number of Options | ||
Outstanding Ending | 7,804,734 | |
Exercisable Ending | 3,853,734 | |
Weighted Average Exercise Price ($) | ||
Grants | $ 3.54 | |
Weighted-average exercise price Ending | $ 4.16 | |
Exercisable Ending | $ 3.64 | |
Weighted Average Remaining Contractual Term | ||
Outstanding Ending | 5 years 6 months 14 days | |
Aggregate Intrinsic Value ($) | ||
Outstanding Ending | $ 3,030,518 | |
Stock Option [Member] | ||
Number of Options | ||
Outstanding Beginning | 2,777,334 | 1,291,334 |
Grants | 5,158,000 | 1,506,000 |
Forfeitures and cancellations | (130,600) | (20,000) |
Outstanding Ending | 7,804,734 | 2,777,334 |
Exercisable Ending | 3,853,734 | |
Weighted Average Exercise Price ($) | ||
Weighted-average exercise price Beginning | $ 4.31 | $ 5.22 |
Grants | 4.06 | 3.54 |
Forfeitures and cancellations | 3.54 | 4.87 |
Weighted-average exercise price Ending | 4.16 | $ 4.31 |
Exercisable Ending | $ 3.64 | |
Weighted Average Remaining Contractual Term | ||
Outstanding Ending | 5 years 6 months 14 days | |
Exercisable Ending | 6 years 6 months 14 days | |
Aggregate Intrinsic Value ($) | ||
Outstanding Ending | $ 3,030,518 | |
Exercisable Ending | $ 1,526,908 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Stock Compensation Expense: | ||
Total stock based compensation expense | $ 4,872,909 | $ 3,959,367 |
Stock Option [Member] | ||
Stock Compensation Expense: | ||
SG&A | 3,788,538 | 2,993,532 |
R&D | 1,084,371 | 965,835 |
Total stock based compensation expense | $ 4,872,909 | $ 3,959,367 |
Stock Options (Details 3)
Stock Options (Details 3) | 12 Months Ended |
Aug. 31, 2020$ / sharesshares | |
Number of Shares Subject to Outstanding Options | shares | 7,804,734 |
Weighted average contractural life (years) | 5 years 6 months 14 days |
Weighted-average exercise price | $ / shares | $ 4.16 |
Number of Shares Subject to options exercisable | shares | 3,853,734 |
Weighted average contractural life (years) of options exercisable | 6 years 6 months 14 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.64 |
$2.32 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 153,000 |
Weighted average contractural life (years) | 9 years 1 month 9 days |
Weighted-average exercise price | $ / shares | $ 2.32 |
Number of Shares Subject to options exercisable | shares | 42,500 |
Weighted average contractural life (years) of options exercisable | 9 years 1 month 9 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 2.32 |
$2.60 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 2,500,000 |
Weighted average contractural life (years) | 5 years 10 months 3 days |
Weighted-average exercise price | $ / shares | $ 2.6 |
Number of Shares Subject to options exercisable | shares | 1,250,000 |
Weighted average contractural life (years) of options exercisable | 5 years 10 months 3 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 2.6 |
$3.28 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 7,500 |
Weighted average contractural life (years) | 6 years 2 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 2 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 4 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 4 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 | 1,380,400 |
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 | 1,125,900 |
Weighted average contractural life (years) of options exercisable | 8 years 5 months 5 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.54 |
$3.66 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 1,000,000 |
Weighted average contractural life (years) | 3 years |
Weighted-average exercise price | $ / shares | $ 3.66 |
Number of Shares Subject to options exercisable | shares | 500,000 |
Weighted average contractural life (years) of options exercisable | 3 years |
Weighted-average exercise price of options exercisable | $ / shares | $ 3.66 |
$4.87 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 187,500 |
Weighted average contractural life (years) | 7 years 2 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 2 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 4 months 2 days |
Weighted-average exercise price | $ / shares | $ 5.35 |
Number of Shares Subject to options exercisable | shares | 672,000 |
Weighted average contractural life (years) of options exercisable | 7 years 4 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) | 3 months 22 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 | 3 months 22 days |
Weighted-average exercise price of options exercisable | $ / shares | $ 5.94 |
$6.00 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 800,000 |
Weighted average contractural life (years) | 3 years |
Weighted-average exercise price | $ / shares | $ 6 |
Number of Shares Subject to options exercisable | shares | |
Weighted average contractural life (years) of options exercisable | 3 years |
Weighted-average exercise price of options exercisable | $ / shares | $ 6 |
$8.00 Per Share [Member] | |
Number of Shares Subject to Outstanding Options | shares | 700,000 |
Weighted average contractural life (years) | 3 years |
Weighted-average exercise price | $ / shares | $ 8 |
Number of Shares Subject to options exercisable | shares | |
Weighted average contractural life (years) of options exercisable | 3 years |
Weighted-average exercise price of options exercisable | $ / shares | $ 8 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | Jul. 05, 2019 | Oct. 09, 2019 | Sep. 16, 2019 | Jul. 02, 2020 | Aug. 31, 2020 | Aug. 31, 2019 |
Closing stock price | $ 3.66 | |||||
Aggregate intrinsic value of options, description | 4,075,900 outstanding options have an exercise price below $3.66 per share | |||||
Aggregate intrinsic value of options | $ 3,030,518 | |||||
Aggregate intrinsic value of vested options | 1,526,908 | |||||
Share based compensation | 4,872,909 | $ 3,959,367 | ||||
Share based compensation expenses not yet recognized | $ 7,116,483 | |||||
Share based compensation recognition period | 4 years | |||||
Vesting term | 6 years 6 months 14 days | |||||
Director and CEO [Member] | ||||||
Stock options grant | 2,500,000 | |||||
Options granted, description | Options granted with an exercise price of $3.66 as to 1,000,000 options, $6.00 as to 800,000 options and $8.00 as to 700,000 options | |||||
Vesting rate description | 500,000 on the date of grant, 800,000 on the six month anniversary, 700,000 on the one-year anniversary and 500,000 on the eighteen month anniversary | |||||
Vesting term | 3 years | |||||
Jatinder S. Bhogal [Member] | ||||||
Stock options grant | 2,500,000 | |||||
Stock options exercise price | $ 2.60 | |||||
Vesting rate description | vesting as to 1,250,000 options and July 1, 2021 as to 1,250,000 options | |||||
Vesting term | 6 years | |||||
Employee [Member] | ||||||
Stock options grant | 153,000 | |||||
Stock options exercise price | $ 2.32 | |||||
Vesting rate description | 1/36th per month | |||||
Vesting term | 10 years | |||||
Consultant [Member] | ||||||
Stock options grant | 5,000 | |||||
Stock options exercise price | $ 3.54 | |||||
Vesting rate description | 1/20th per quarter | |||||
Vesting term | 6 years | |||||
Directors and Employees [Member] | ||||||
Stock options granted | 498,000 | |||||
Stock options exercise price | $ 3.54 | |||||
Vesting rate description | 1/20th per quarter | |||||
Vesting term | 6 years | |||||
Director [Member] | ||||||
Stock options granted | 1,008,000 | |||||
Stock options exercise price | $ 3.54 | |||||
Vesting term | 10 years | |||||
Stock Option [Member] | ||||||
Aggregate intrinsic value of options | $ 3,030,518 | |||||
Share based compensation | $ 58,367 | |||||
Forfeitures | 130,600 | 20,000 | ||||
2006 Incentive Stock Option Plan [Member] | ||||||
Stock options grant | 15,000,000 | |||||
Stock options available for grant, shares | 6,036,685 | |||||
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 |
Lease (Details)
Lease (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Notes to Financial Statements | ||
Operating lease cost | $ 26,664 | $ 8,888 |
Short-term lease costs | ||
Total net lease costs | $ 26,664 | $ 8,888 |
Lease (Details 1)
Lease (Details 1) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Notes to Financial Statements | ||
Operating lease right-of-use asset | $ 42,212 | $ 65,646 |
Current maturities of operating lease | 24,828 | 23,169 |
Non-current operating lease | 17,737 | 42,564 |
Total operating lease liabilities | $ 42,564 | $ 65,733 |
Weighted Average remaining lease term (in years): | 1 year 8 months 2 days | 2 years 10 months 25 days |
Discount rate: | 5.85% |
Lease (Details 2)
Lease (Details 2) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Notes to Financial Statements | ||
2021 | $ 26,664 | |
2022 | 18,128 | |
Total lease payments | 44,792 | |
Less: Imputed interest | (2,228) | |
Total operating lease liabilities | 42,564 | $ 65,733 |
Less: current lease obligations | 24,828 | 23,169 |
Long term lease obligations | $ 17,737 | $ 42,564 |
Lease (Details Narrative)
Lease (Details Narrative) | 12 Months Ended |
Aug. 31, 2020USD ($) | |
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 |
South Korea [Member] | |
Lease description | The lease has a term of one year from September 23, 2020 through September 23, 2021 |
Operating lease expenses | $ 1,200 |
Frequency of payment | Monthly |
Transactions with Related Per_2
Transactions with Related Persons (Details Narrative) - USD ($) | Dec. 02, 2018 | Aug. 07, 2017 | Nov. 26, 2018 | Aug. 31, 2020 | Aug. 31, 2019 |
November 2018 Private Placement units issued in exchange for convertible debt, Amount | $ 5,200,000 | ||||
November 2018 Private Placement [Member] | |||||
Issuance of common stock shares to purchase unit | 16,666,667 | ||||
Price per unit | $ 1.50 | ||||
Unit price, description | Company’s equity securities at a price of $1.50 per Unit with each Unit comprised of (a) one share of common stock; and (b) one Series T Warrant to purchase one share of common stock at a price of $1.70 per share for a period of seven (7) years. | ||||
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 | $ 5,200,000 | ||||
November 2018 Private Placement units issued, Amount | $ 19,800,000 | ||||
Mr. Bhogal [Member] | |||||
Related party payable | $ 48,758 | ||||
Mr. Bhogal [Member] | Consulting Agreement [Member] | |||||
Share-based Compensation (monthly) | $ 5,000 | $ 18,750 | |||
Related party expense | 255,833 | 183,750 | |||
Talia Jevan Properties, Inc [Member] | |||||
Related party payable | 53,251 | ||||
Proceeds from related party debt | 210,415 | 15,497 | |||
Repayment of related party debt | $ 172,661 | 0 | |||
Satterlee [Member] | |||||
Legal services | $ 3,480 | ||||
Kalen [Member] | November 2018 Private Placement [Member] | |||||
Units purchased in exchange for cash | 13,100,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 6,598,870 | $ 5,901,666 |
Capitalized research and development | 1,069,124 | 1,014,380 |
Depreciation | 1,762 | (7,353) |
Stock based compensation | 3,006,736 | 1,983,425 |
Research and development credit carry forward | 657,737 | 599,646 |
Total deferred tax assets | 11,334,229 | 9,491,764 |
Less: valuation allowance | (11,334,229) | (9,491,764) |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Income Taxes Details Abstract | ||
Income tax benefit at statutory rate | $ 1,544,143 | $ 1,446,412 |
Permanent differences | 240,231 | 69,190 |
Research and development credit | 58,091 | 78,981 |
Change in valuation allowance | (1,842,465) | (1,594,583) |
Total |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Income Taxes Details Abstract | ||
Change in valuation allowance | $ (1,842,465) | $ (1,594,583) |
Research and development credit carry forward | 657,737 | $ 599,646 |
Federal income tax | $ 31,423,193 | |
Corporate tax rate | 21.00% | 35.00% |
Uncertain tax positions | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Aug. 31, 2020USD ($) | |
Lease description | Term from May 1, 2019 through May 1, 2022 with monthly rent due of $2,200 for the first two years and $2,266 during year three |
Estimated cost | $ 1,803,000 |
Cost of equipment description | The remaining $510,345 will be paid upon the completion of the equipment once the final specifications have been determined pending optimization of the Company’s product iteration specific to this equipment |
South Korea [Member] | |
Lease description | The lease has a term of one year from September 23, 2020 through September 23, 2021. |
Operating lease expenses | $ 1,200 |
Frequency of payment | Monthly |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | 2 Months Ended | ||
Oct. 26, 2020 | Oct. 20, 2020 | Oct. 19, 2020 | |
SolarWindow Asia Co [Member] | |||
Capital contribution to subsidiary | $ 78,000 | ||
Additional contribution to subsidiary | $ 753,000 | ||
Talia Jevan Properties, Inc [Member] | |||
Repayment of related party debt | $ 53,251 | ||
Joesph Sierchio [Member] | |||
Options granted to related party | 50,000 | ||
Stock options exercise price | $ 3.42 | ||
Options vested, description | Vest as to 12,500 immediately and 12,500 each anniversary thereafter and expires on October 19, 2026 |