| Interim Statement Presentation | NOTE 2 – Interim Statement Presentation Basis of Presentation and Use of Estimates The accompanying unaudited interim consolidated financial statements of
the Company as of May 31, 2024, and for the three and nine months ended May 31, 2024 and 2023 have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission (“ SEC U.S. GAAP The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in
the Consolidated Financial Statements and accompanying disclosures. Actual results may differ from those estimates. The accompanying unaudited
interim consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments
(including normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s
consolidated financial position as of May 31, 2024, results of operations, stockholders’ equity and cash flows for the three and
nine months ended May 31, 2024 and 2023. The Company did not record an income tax provision during the periods presented due to net taxable
losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year. The preparation of consolidated financial statements in conformity with
U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
accounting period. The Company considers its accounting policies relating to the impairment of long-lived assets and stock-based
compensation to be the most significant accounting policy that involves management estimates and judgments. The Company has made
accounting estimates based on the facts and circumstances available as of the reporting date. Actual amounts could differ from these estimates,
and such differences could be material. These consolidated financial statements presented are those of SWT and
its wholly owned subsidiaries, SolarWindow Asia (USA) Corp., and the Korean Subsidiary. All significant intercompany balances and transactions
have been eliminated. As more fully described in Note 3, on January 13, 2023, the Board determined
that it is in the best interests of the Company to discontinue operations in South Korea and to dissolve the Korean Subsidiary. In accordance
with applicable accounting guidance, the results of the Korean Subsidiary are presented as discontinued operations in the Consolidated
Statements of Operations and Comprehensive Loss and, as such, have been excluded from continuing operations. The Consolidated Statements
of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. Information regarding the Company’s significant accounting policies
is contained in Note 2, “Summary of significant accounting policies,” to the consolidated financial statements in the
Company’s Annual Report on Form 10-K for the year ended August 31, 2023. Presented below and in the following notes is
supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report. Fiscal quarter The Company’s quarterly periods end on November 30, February
29, May 31, and August 31. The Company’s third quarter in fiscal 2024 and 2023 ended on May 31, 2024 and 2023, respectively. Cash and Highly Liquid Investments Cash includes cash on hand and highly liquid investments with original
maturities of three months or less from the date of purchase. The Company had $ 4,841,098 212,814 4,628,284 4,554,954
Schedule of cash and short-term investment
May 31, August 31,
2024 2023
Cash $ 841,098 $ 492,610
Short-term investments 4,000,000 5,500,000
Total cash and short-term investments $ 4,841,098 $ 5,992,610 Short-term investments The Company determines the balance sheet classification of its investments
at the time of purchase and evaluates the classification at each balance sheet date. Money market funds, certificates of deposit, and
time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates
fair value and are recorded in the consolidated balance sheets in short-term investments. Time Deposits pay the interest earned at the
time of maturity or redemption. During the nine months ended May 31, 2024, $4,900,000 of time deposits matured and $600,000 was redeemed.
During the three and nine months ended May 31, 2024, the Company received $0 and $270,161, respectively, of earned interest on the time
deposits originally purchased in February 2023. On February 28, 2024, the Company purchased new time deposits, which consist of a 12-month
$2,500,000 fixed-term deposit earning interest of 5.2%, a 12-month $500,000 fixed-term deposit earning interest of 4.50% and a 6-month
$1,000,000 fixed-term deposit earning interest of 5.10%. 51,850 172,426 75,616 87,123 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets includes the following items:
Schedule of prepaid expenses and other current assets
May 31, August 31,
2024 2023
Prepaid expenses $ — $ 24,250
Prepaid insurance premium 39,777 67,833
Interest income receivable (a) 51,850 149,585
Equipment deposit refund receivable (b) 608,705 —
Total $ 700,332 $ 241,668
(a) Relates to interest receivable in short term deposits as described above under NOTE 2 – Interim
Statement Presentation, “Short-term Investments.”
(b) For additional information, see NOTE 5 – Property and Equipment Accounting Pronouncements The Company reviews new accounting standards as issued. Although some of
these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company
has not identified any standards that the Company believes merit further discussion. Recent accounting pronouncements not yet adopted None. Recently adopted accounting pronouncements None. | NOTE
2 – Summary of Significant Accounting Policies Interim Statement Presentation Basis of Presentation and Use of Estimates The Management of the Company is responsible for the selection and use
of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important
to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or
complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s
significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of presentation The accompanying consolidated financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the United States of America (“ U.S. GAAP Use of Estimates The preparation of consolidated financial statements in conformity with
U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues and expenses during the accounting period. The Company
considers its accounting policies relating to stock-based compensation to be the most significant accounting policy that involves management
estimates and judgments. The Company has made accounting estimates based on the facts and circumstances available as of the reporting
date. Actual amounts could differ from these estimates, and such differences could be material. Fiscal Year-End The Company’s quarterly periods end on November 30, February
28 and May 31 with August 31 being the Company’s fiscal year end. Principles of Consolidation These consolidated financial statements presented are those of SolarWindow
Technologies, Inc. and its wholly owned subsidiaries, SolarWindow Asia (USA) Corp., and SolarWindow Asia Co. Ltd. All significant intercompany
balances and transactions have been eliminated. Cash and Highly Liquid Investments Cash includes cash on hand and highly liquid investments with original
maturities of three months or less from the date of purchase. The Company had $ 5,992,610 134,218 5,857,681 5,783,777
Schedule of cash and short-term investment
August 31,
2023 2022
Cash $ 492,610 $ 8,077,849
Short-term investments 5,500,000 —
Total cash and short-term investments $ 5,992,610 $ 8,077,849 Short-term investments The Company determines the balance sheet classification of its investments
at the time of purchase and evaluates the classification at each balance sheet date. Money market funds, certificates of deposit, and
time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates
fair value and are recorded in the consolidated balance sheets in short-term investments. As of August 31, 2023, short-term investments
consists of a 12-month $4,000,000 fixed-term deposit earning interest of 5.3%, and a 12-month $1,500,000 fixed term deposit earning interest
of 4.25% purchased in February 2023. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a
three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable
inputs (level 3 measurements). These tiers include: Level 1, defined as observable inputs such as quoted
prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices
for identical or similar instruments in markets that are not active; and Level 3, defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques
in which one or more significant inputs or significant value drivers are unobservable. During the periods covered by this report, the Company did not
have any assets or liabilities that were required to be measured at fair value on a recurring basis or on a non-recurring basis. Fair Value of Financial Instruments The Company’s financial instruments consist of accounts payable and
accrued expenses. The carrying amounts of the Company’s financial instruments approximate fair value because of the short-term maturity
of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue
financial instruments for trading purposes, nor do we utilize derivative instruments. 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 5 – Common Stock and Warrants”
and “NOTE 5 - Stock Options” for additional information on the Company’s stock-based compensation plans. Property and 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:
Schedule of estimated useful lives
Estimated
Useful Lives (Years)
Computer equipment and software 3 5
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. 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 advance payments for future research and development activities which are deferred and recognized as expense as the related
services are performed. 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 The shares listed below were not included in the computation of diluted
losses per share because to do so would be antidilutive for the periods presented:
Schedule of computation of diluted
losses per share
Years Ended August 31,
2023 2022
Stock options 4,207,400 6,761,400
Warrants 16,666,667 19,281,917
20,874,067 26,043,317 Also, the 2023 EPS for continuing operations ($0.04 ($0.01 ($0.04 Foreign Currency Translation Gain and Comprehensive Income (Loss) In countries in which the Company operates, and the functional currency
is other than the U.S. dollar, assets and liabilities are translated using published exchange rates in effect at the consolidated balance
sheet date. Expenses and cash flows are translated using an approximate weighted average exchange rate for the period. Resulting translation
adjustments are recorded as a component of accumulated other comprehensive income on the accompanying consolidated balance sheet. For
the years ended August 31, 2023 and 2022, comprehensive loss includes a loss of $ 4,528 58,759 As of and for the years ended August 31, 2023 and 2022, the Company used
the following exchange rates.
Schedule of exchange rates
Approximate weighted Approximate weighted
average exchange rate average exchange rate
Exchange rate at For the year ended Exchange rate at For the year ended
Currency August 31, 2023 August 31, 2023 August 31, 2022 August 31, 2022
Korean Won 1,324.00 1,321.29 1,342.00 1,230.36 Accounting Pronouncements The Company reviews new accounting standards as issued. Although some of
these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company
has not identified any standards that the Company believes merit further discussion. Recent accounting pronouncements not yet adopted None. Recently adopted accounting pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes
certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income
taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill
and allocating taxes to members of a consolidated group, among others. This guidance is effective for interim and annual reporting
periods beginning after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods
for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update
and applied either prospectively or retrospectively. The Company adopted ASU 2019-12 beginning September 1, 2021 with no impact on its
Financial Statements. |
