Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Feb. 29, 2016 | Apr. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | SolarWindow Technologies, Inc. | |
Entity Central Index Key | 1,071,840 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 29, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,562,721 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 188,713 | $ 228,465 |
Deferred research and development costs | 176,201 | 106,135 |
Prepaid expenses and other current assets | 29,022 | 21,152 |
Total current assets | 393,936 | 355,752 |
Equipment, net of accumulated depreciation of $33,439 and $27,751, respectively | 27,148 | 30,535 |
Total assets | 421,084 | 386,287 |
Current liabilities | ||
Accounts payable | 179,576 | $ 97,438 |
Related party payables | 25,720 | |
Interest payable to related party | 54,824 | $ 443,498 |
Bridge note, net of discount of $187,366 and $6,516 | 412,634 | 593,484 |
Convertible promissory notes payable to related party, net of discount of $315,515 and $879,808, respectively | 234,495 | $ 2,120,192 |
Derivative liability | 396,270 | |
Total current liabilities | 1,303,519 | $ 3,254,612 |
Convertible promissory notes payable to related party, net of discount of $2,273,574 | 726,426 | |
Interest payable to related party | 543,113 | |
Total liabilities | $ 2,573,058 | $ 3,254,612 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
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, 26,944,721 and 26,572,615 shares issued and outstanding at February 29, 2016 and August 31, 2015 | $ 26,944 | $ 26,572 |
Additional paid-in capital | 29,518,828 | $ 26,144,117 |
Common stock issuable | 474,300 | |
Retained deficit | (32,172,046) | $ (29,039,014) |
Total stockholders' equity (deficit) | (2,151,974) | (2,868,325) |
Total liabilities and stockholders' equity (deficit) | $ 421,084 | $ 386,287 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Current assets | ||
Equipment, net of accumulated depreciation | $ 33,439 | $ 27,751 |
Current liabilities | ||
Bridge note, net of discount | 187,366 | 6,516 |
Convertible promissory note, net of discount | 315,515 | $ 879,808 |
Convertible promissory notes payable to related party, net of discount | $ 2,273,574 | |
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 | 26,944,721 | 26,572,615 |
Common stock, shares outstanding | 26,944,721 | 26,572,615 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Operating expense | ||||
Selling, general and administrative | $ 868,495 | $ 662,473 | $ 1,310,189 | $ 1,221,950 |
Research and development | 162,937 | 153,359 | 311,859 | 339,493 |
Total operating expense | 1,031,432 | 815,832 | 1,622,048 | 1,561,443 |
Loss from operations | (1,031,432) | (815,832) | (1,622,048) | (1,561,443) |
Other income (expense) | ||||
Interest expense | (83,871) | (56,077) | (154,438) | (111,804) |
Accretion of debt discount | (621,555) | $ (649,038) | (1,284,321) | $ (3,106,948) |
Change in fair value of derivative liability | (72,225) | (72,225) | ||
Total other income (expense) | (777,651) | $ (705,115) | (1,510,984) | $ (3,218,752) |
Net loss | $ (1,809,083) | $ (1,520,947) | $ (3,133,032) | $ (4,780,195) |
Basic and Diluted Loss per Common Share | $ (0.07) | $ (0.06) | $ (0.12) | $ (0.19) |
Weighted average number of common shares outstanding - basic and diluted | 26,866,729 | 24,931,888 | 26,719,672 | 24,620,165 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock Issuable | Retained Deficit | Total |
Beginning Balance, Shares at Aug. 31, 2014 | 24,306,612 | ||||
Beginning Balance, Amount at Aug. 31, 2014 | $ 24,306 | $ 20,872,345 | $ (20,946,270) | $ (49,619) | |
Stock based compensation related to stock issuance, Shares | 60,000 | ||||
Stock based compensation related to stock issuance, Amount | $ 60 | 83,940 | 84,000 | ||
Stock based compensation due to common stock purchase options | $ 436,774 | $ 436,774 | |||
Exercise of stock options, Shares | |||||
Exercise of stock options, Amount | |||||
Discount on convertible promissory note due to detachable warrants | $ 3,000,000 | $ 3,000,000 | |||
Discount on $600,000 bridge loan due to detachable warrants | 299,750 | 299,750 | |||
Exercise of Series H warrants, Shares | 1,751,216 | ||||
Exercise of Series H warrants, Amount | $ 1,751 | 1,451,763 | $ 1,453,514 | ||
Exercise of Series G warrants, Shares | 454,787 | ||||
Exercise of Series G warrants, Amount | $ 455 | $ (455) | |||
Net loss | $ (8,092,744) | $ (8,092,744) | |||
Ending Balance, Shares at Aug. 31, 2015 | 26,572,615 | ||||
Ending Balance, Amount at Aug. 31, 2015 | $ 26,572 | $ 26,144,117 | $ (29,039,014) | (2,868,325) | |
Stock based compensation related to stock issuance, Shares | 90,000 | ||||
Stock based compensation related to stock issuance, Amount | $ 90 | 337,410 | 337,500 | ||
Stock based compensation due to common stock purchase options | 187,176 | $ 187,176 | |||
Exercise of stock options, Shares | 282,106 | ||||
Exercise of stock options, Amount | $ 282 | (282) | |||
Discount on convertible promissory note due to detachable warrants | 3,008,812 | $ 3,008,812 | |||
Discount on convertible promissory note due to beneficial conversion feature | 165,640 | 165,640 | |||
February 2016 Private Placement | $ (324,045) | $ 474,300 | 150,255 | ||
Net loss | $ (3,133,032) | (3,133,032) | |||
Ending Balance, Shares at Feb. 29, 2016 | 26,944,721 | ||||
Ending Balance, Amount at Feb. 29, 2016 | $ 26,944 | $ 29,518,828 | $ 474,300 | $ (32,172,046) | $ (2,151,974) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (3,133,032) | $ (4,780,195) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 5,688 | 4,190 |
Stock based compensation expense | 524,676 | $ 362,954 |
Change in fair value of derivative liability | 72,225 | |
Accretion of debt discount | 1,284,321 | $ 3,106,948 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in deferred research and development costs | (70,066) | |
Decrease (increase) in prepaid expenses and other current assets | (7,870) | $ (14,765) |
Increase (decrease) in accounts payable | 82,137 | $ 105,213 |
Increase (decrease) in related party payable | 25,720 | |
Increase (decrease) in accrued liabilities | 154,439 | $ 111,804 |
Net cash used in operating activities | (1,061,762) | (1,103,851) |
Cash flows from investing activity | ||
Purchase of equipment | (2,300) | (15,560) |
Net cash used in investing activity | (2,300) | (15,560) |
Cash flows from financing activities | ||
Proceeds from the issuance of equity securities | 474,300 | $ 501,242 |
Proceeds from promissory notes | 550,010 | |
Net cash provided by financing activities | 1,024,310 | $ 501,242 |
Decrease in cash and cash equivalents | (39,752) | (618,169) |
Cash and cash equivalents at beginning of period | 228,465 | 785,237 |
Cash and cash equivalents at end of period | $ 188,713 | $ 167,068 |
Supplemental disclosure of cash flow information: | ||
Interest paid in cash | ||
Income taxes paid in cash | ||
Supplemental disclosure of non-cash transactions: | ||
Debt discount recorded for value of warrants issued and/or modified | $ 3,008,812 | $ 3,000,000 |
Debt discount recorded for beneficial conversion feature | 165,640 | |
Derivative liability from the sale of equity securities | $ 324,045 |
Basis of Presentation, Organiza
Basis of Presentation, Organization, Recent Accounting Pronouncements and Going Concern | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 1. Basis of Presentation, Organization, Recent Accounting Pronouncements and Going Concern | Basis of Presentation The unaudited financial statements of SolarWindow Technologies, Inc. (the "Company") as of February 29, 2016, and for the three and six months ended February 29, 2016 and February 28, 2015, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and include the Company's wholly-owned subsidiaries, Kinetic Energy Corporation ("KEC"), and New Energy Solar Corporation ("New Energy Solar"). Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended August 31, 2015, as filed with the Securities and Exchange Commission as part of the Company's Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year. Organization SolarWindow Technologies, Inc. was incorporated in the State of Nevada on May 5, 1998, under the name "Octillion Corp." On December 2, 2008, the Company amended its Articles of Incorporation to effect a change of name to New Energy Technologies, Inc. Effective as of March 9, 2015, the Company amended its Articles of Incorporation to change its name to SolarWindow Technologies, Inc. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Kinetic Energy Corporation ("KEC") and New Energy Solar Corporation. KEC was incorporated on June 19, 2008, in the State of Nevada and holds the patents related to the Company's MotionPower technology. The Company's business activities related to the MotionPower technology are conducted through KEC. New Energy Solar was incorporated on February 9, 2009, in the State of Florida and entered into agreements with The University of South Florida Research Foundation ("USF") to sponsor research related to the Company's SolarWindow technology. On February 18, 2015, the Company terminated the license agreement entered into with USF which originated on June 21, 2010. On March 9, 2015, the Company changed its name to "SolarWindow Technologies, Inc." in order to appropriately align the corporate name and brand identity. The Company's ticker symbol changed to WNDW. The Company has been developing two sustainable electricity generating systems. These novel technologies are branded as SolarWindow and MotionPower. On March 2, 2015, the Company announced its exclusive focus on SolarWindow. The Company's SolarWindow technology provides the ability to harvest light energy from the sun and artificial sources and generate electricity from a transparent coating of organic photovoltaic solar cells. The Company's SolarWindow transparent electricity generating coatings are the subject of patent pending technologies. Initially being developed for application on glass surfaces, SolarWindow coatings could potentially be used on any of the more than 85 million commercial and residential buildings in the United States alone. The Company's SolarWindow product development programs involve ongoing research and development efforts, and the commitment of significant resources to support the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by its contract engineers, scientists, and consultants. As such, the Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company's technology before another company develops similar technology and products. Recent Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (" FASB ASU In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810 and significantly changes the consolidation analysis required under U.S. GAAP relating to whether or not to consolidate certain legal entities. Early adoption is permitted. The Company's effective date for adoption is January 1, 2016. The Company does not expect this accounting update to have a material effect on its consolidated financial statements in future periods, although that could change. On May 28, 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, Topic 606, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The standard is effective for annual periods beginning after December 15, 2017. The Company has not yet selected a transition method and does not expect this accounting update to have a material effect on its consolidated financial statements in future periods. 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. Going Concern The Company does not have any commercialized products and has not generated any revenue since inception. The Company has an accumulated deficit of $32,172,046 and cash of $188,713 as of February 29, 2016, and does not have positive cash flows from operating activities. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business. Beginning on February 18, 2016, the Company, initiated an offering pursuant to a Private Placement Memorandum dated February 16, 2016 (the "Offering") for the sale to accredited investors of units of the Company's equity securities (each a ""Unit"" and collectively, the ""Units""). Subsequent to quarter end, the Company received $892,800 from the sale of 288 Units pursuant to the Offering as defined in Note 3 below (See Note 3 and Note 8 below). Based upon its current and near term anticipated level of operations and expenditures, the Company believes that cash on hand should be sufficient to enable it to continue operations through July 2016. If adequate funds are not available on reasonable terms, or at all, it would result in a material adverse effect on the Company's business, operating results, financial condition and prospects. In particular, the Company may be required to delay, reduce the scope of or terminate its research programs, sell rights to its SolarWindow technology and/or MotionPower TM In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements. |
Debt
Debt | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 2. Debt | December 7, 2015, $550,000 Bridge Loan On December 7, 2015, the Company entered into a Bridge Loan Agreement (the "December 2015 Loan Agreement") with Kalen Capital Corporation (the "Investor"). Pursuant to the December 2015 Loan Agreement, the Company received advances of $400,000 on October 7, 2015 and $150,000 on December 22, 2015 (Each advance includes an additional $5 related to wire fees). The December 2015 Loan was evidenced by a promissory note with an annual interest rate of 10% (default rate of 18%), compounded quarterly, and an initial maturity date of the earlier of: (a) the closing of any equity financing by the Company in excess of $3,000,000, or (b) September 1, 2016. The December 2015 Loan is convertible at any time into shares of common stock at a conversion price equal to 85% of the thirty day volume weighted average price of the Company's common stock. In connection with the December 2015 Loan Agreement, the Company issued the Investor a Series M Stock Purchase Warrant to purchase up to 275,000 shares of the Company's common stock for a period of five years, with an exercise price of $2.12. The debt discount attributable to the warrants and beneficial conversion feature amounted to $458,777 (including $400,000 recognized as of October 7, 2015 and $58,777 recognized on December 22, 2015). The estimated fair value of the Series M Warrants was calculated using the Black-Scholes option pricing model and the following assumptions: market price of common stock - $3.01 per share; estimated volatility 79%; 5-year risk free interest rate 1.67%; expected dividend rate - 0% and expected life - 5 years. The resulting discount is being accreted over the 9 month term. As consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017 (as described below), the Company extended the expiration date of all of Investor's existing warrants, including the Series M Warrant maturity date from December 7, 2020 to December 31, 2020. The difference in fair value of the Series M Warrant as a result of the extension of the expiration date was immaterial. During the three months ended February 29, 2016, the Company recognized $12,072 of interest expense and $143,262 of accretion related to the debt discount For the December 2015 Loan Agreement. March 4, 2015, $600,000 Bridge Loan On March 4, 2015, the Company entered into a Bridge Loan Agreement (the "Bridge Loan Agreement") with 1420468 Alberta Ltd. (the "Creditor") pursuant to which the Company borrowed $600,000 at an annual interest rate of 7% (the "March 2015 Loan"), compounded quarterly, with a default rate of 15%. The March 2015 Loan was evidenced by a promissory note with an initial maturity date of the earlier of: (a) the closing of any equity financing by the Company in excess of $600,000, or (b) September 4, 2015. In connection with the Bridge Loan Agreement, the Company issued the Creditor a Series L Stock Purchase Warrant to purchase up to 500,000 shares of the Company's common stock, which was initially exercisable from September 5, 2015 through March 4, 2020, with an exercise price of $1.20. The debt discount attributable to the relative fair value of the warrants issued with the March 2015 Loan, amounted to $299,750. The estimated fair value of the Series L Warrant was $1.198 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: market price of common stock - $1.78 per share; estimated volatility - 76%; risk free interest rate 1.55%; expected dividend rate - 0% and expected life 4.5 years. The resulting discount was ccreted over the original term of the March 2015 Loan through September 4, 2015. On December 7, 2015, Creditor agreed to extend the maturity date of the March 2015 Loan from September 4, 2015 to December 31, 2016. As consideration the Company issued Creditor a Series M Stock Purchase Warrant to purchase 100,000 shares of the Company's common stock through December 7, 2020, at an exercise price of $2.34 per share As a result, the Company recognized an additional debt discount for the fair value of the Series M Stock Purchase Warrant amounting to $205,800. The fair value of the Series M Warrant was $2.058 and was calculated using the Black-Scholes option pricing model and the following assumptions: exercise price - $2.34; market price of common stock - $3.01 per share; estimated volatility - 79%; risk free interest rate - 1.67%; expected dividend rate - 0% and expected life - 5 years. The Company recorded $33,000 as additional debt discount to recognize the increase in fair value for the extension of the expiration date of the Series L Warrant from March 4, 2020 to December 7, 2020. The increase in fair value was calculated using the Black-Scholes option pricing model and the following assumptions: exercise price - $1.20; market price of common stock - $3.01 per share; estimated volatility - 79%; risk free interest rate - 1.67%; expected dividend rate - 0% and expected life - 5 years for the new warrant and 4.24 years for the original warrant. During the three and six months ended February 29, 2016, the Company recognized $11,025 and $21,861, respectively, of interest expense. Accretion related to the debt discount for the March 2015 Loan amounted to $6,516 and $57,950 during the three and six months ended February 29, 2016, respectively. October 7, 2013, $3,000,000 Convertible Promissory Note On October 7, 2013, the Company entered into a Bridge Loan Agreement (the "2013 Loan Agreement") with the Investor. Pursuant to the 2013 Loan Agreement, the Company received proceeds of $3,000,000 and issued a 7% unsecured Convertible Promissory Note (the "2013 Note") initially due on October 6, 2014, with interest compounded quarterly and issued a Series I Stock Purchase Warrant (the "Series I Warrant") for the purchase up to 921,875 shares of the Company's common stock at an initial exercise price of $1.37 for a period of five years. According to the original terms of the 2013 Loan Agreement, the Investor may have elected to convert all or any portion of the outstanding principal amount of the 2013 Note, and accrued interest thereon into units, with each unit consisting of (a) one share of common stock; (b) one Series J Stock Purchase Warrant for the purchase of one share of common stock (the "Series J Warrant"); and (c) one Series K Stock Purchase Warrant for the purchase of one share of common stock (the "Series K Warrant"). On November 10, 2014, the Company entered into an Amended Bridge Loan Agreement (the "2015 Loan Agreement") with Investor pursuant to which the maturity date was extended to December 31, 2015 (the "Amended Note"). According to the terms of the 2015 Loan Agreement, the Investor may elect to convert principal and accrued interest into units of the Company's equity securities (collectively, the "Units"), 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. If issued, the Warrant included in the Units will be exercisable for a period of five years. In order to induce Investor to enter into the 2015 Loan Agreement and extend the maturity date to December 31, 2015, the Company issued a Series J Warrant to purchase 3,110,378 shares of its common stock at an exercise price of $1.12 and a Series K Warrant to purchase 3,110,378 shares of its common stock at an exercise price of $1.20. Each of the Series J Warrant and Series K Warrant was initially exercisable through November 9, 2019. As a result of the modification (which did not result in a gain or loss due to the related party nature of the transaction), the fair value of the Warrant amounting to $3,629,309 (limited to the $3,000,000 face value of the note) was recognized as a debt discount as of November 10, 2014. On December 31, 2015, the Company entered into a Second Amended Bridge Loan Agreement (the " 2015 Second Amended Loan Agreement As consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017, the Company issued a Series N Warrant and extended the maturity date of all of Investor's existing warrants, as described below, resulting in an additional debt discount of $2,476,875 as of December 31, 2015. The modification did not result in a gain or loss due to the related party nature of the transaction. The Company issued a Series N Warrant to purchase 767,000 shares of common stock at an exercise price of $3.38 through December 31, 2020. The fair value of the Series N Warrant was $2.102 per share, or $1,612,234 and was calculated using the Black-Scholes option pricing model and the following assumptions: market price of common stock - $3.24 per share; estimated volatility 82.00%; risk free interest rate - 1.76%; expected dividend rate - 0% and expected life - 5 years. As a result, the Company recorded a debt discount of $1,612,234 which is being accreted through December 31, 2017. The maturity date of the Series I Warrant to purchase 921,875 shares of common stock was extended from October 6, 2018 to December 31, 2020. The Company recorded $233,234 as a debt discount to recognize the increase in value for the extension of the expiration date. The increase in the fair value was calculated using the Black-Scholes option pricing model and the following assumptions: exercise price - $1.37; market price of common stock - $3.24 per share; estimated volatility 81.81%; risk free interest rate - 1.76%; expected dividend rate - 0% and expected life - 5 years as a result of the extension and 2.77 years remaining at the time of extension through December 31, 2017. The maturity date of the Series J Warrant to purchase 3,110,378 shares of common stock was extended from November 9, 2019 to December 31, 2020. The Company recorded $304,817 as a debt discount to recognize the increase in fair value for the extension of the expiration date. The increase in fair value was calculated using the Black-Scholes option pricing model and the following assumptions: exercise price - $1.12; market price of common stock - $3.24 per share; estimated volatility 81.81%; risk free interest rate - 1.76%; expected dividend rate - 0% and expected life - 5 years as a result of the extension and 3.86 years remaining at the time of extension. The debt discount is being accreted through December 31, 2017. The maturity date of the Series K Warrant to purchase 3,110,378 shares of common stock was extended from November 9, 2019 to December 31, 2020. The Company recorded $326,590 as a debt discount to recognize the increasein fair value for the extension of the expiration date. The increase in fair value was calculated using the Black-Scholes option pricing model and the following assumptions: exercise price - $1.20; market price of common stock - $3.24 per share; estimated volatility 81.81%; risk free interest rate - 1.76%; expected dividend rate - 0% and expected life - 5 years as a result of the extension and 3.86 years remaining at the time of extension. The debt discount is being accreted through December 31, 2017. Interest expense related to the 2013 Loan Agreement, as amended, amounted to $60,774 and $56,077 during the three months ended February 29, 2016 and February 28, 2015, respectively. Interest expense was $120,506 and $111,804 during the six months ended February 29, 2016 and February 28, 2015, respectively. Accretion of the debt discount related to the 2013 Loan Agreement as amended amounted to $426,859 and $649,038 during the three months ended February 29, 2016 and February 28, 2015, respectively. Accretion amounted to $1,083,109 and $3,106,948 during the six months ended February 29, 2016 and February 28, 2015, respectively. The remaining debt discount related to the Series N Warrants and Series I, J and K Warrant expiration date extensions totals $2,273,574 and will be amortized through December 31, 2017. |
Private Placement
Private Placement | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 3 - Private Placement | Beginning on February 18, 2016, the Company, initiated an Offering pursuant to a Private Placement Memorandum dated February 16, 2016 for the sale to accredited investors of units of the Company's equity securities (each a "Unit" and collectively, the "Units"). Each full Unit, which was sold at a price of $3,100 per Unit is comprised of: (a) one thousand (1,000) shares of common stock, par value $0.001; (b) one (1) warrant to purchase one thousand (1,000) shares of common stock at a price, subject to certain adjustments, of $3.10 per Warrant Share through October 31, 2017 the "Series O Warrant"); and (c) one (1) warrant to purchase five hundred (500) shares Common Stock at a price, subject to certain adjustments, of $3.70 per Warrant Share through April 30, 2018 (the "Series P Warrant"). The terms of the Offering provided for a onetime reset adjustment (the "Reset Adjustment") such that if, within 6 months from the Offering Termination Date, as defined, the Company sells equity securities at a price less than $3.10 per share ("Reset Price"), each of the subscribers having purchased Units in the Offering will receive additional Units (the "Reset Units") equal to the difference between the number of Units that would have been issuable to such subscribers if the price per share of common stock included in the Units was equal to the Reset Price less the number of Units actually received by such subscriber. The Company received proceeds of $474,300 from the sale of 153 Units with a price of $3,100 per Unit during the period ended February 29, 2016, and as of that date, 153,000 shares of Common Stock are issuable. As more fully described in Note 8 below, subsequent to February 29, 2016, the Company received additional proceeds of $892,800 from the sale of an additional 288 Units. Total proceeds from the offering aggregated $1,367,100. See Note 8. The Reset Adjustment does not have fixed settlement provisions because the number of Units issued to subscribers may be adjusted higher if the Company sells securities at lower prices in the future; therefore, the Company concluded that the Reset Adjustment feature was not indexed to the Company's stock and is to be treated as a derivative liability for accounting purposes. The accounting treatment for derivative financial instruments requires that the Company allocate a portion of the equity proceeds to the derivative for an amount equal to its initial fair value. Subsequently, on each reporting date, the fair value of the derivative is measured with changes in value recorded to other income/expense. In determining the fair value of the derivative liabilities, the Company used a Monte Carlo simulation at the date the instrument was issued and on February 29, 2016. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company's derivative liability that is categorized within Level 3 of the fair value hierarchy as of February 29, 2016 is as follows: Common stock issuable upon exercise of Series O Warrants 153,000 Common stock issuable upon exercise of Series P Warrants 76,500 Stock price $3.67 Volatility (Annual) 80% Strike price $3.10, Series O Warrants; $3.70, Series P Warrants Risk-free rate 0.78% Maturity date 32 months Probability of Reset Adjustment 75% The following table sets forth the Company's derivative liabilities that were accounted for at fair value on a recurring basis categorized within Level 3 of the fair value hierarchy as of February 29, 2016: Balance at August 31, 2015 Initial valuation of derivative liabilities upon issuance of new securities during the period Increase (decrease) in fair value of derivative liabilities Fair value of derivatives upon reclass to additional paid-in capital Balance at February 29, 2016 Warrant liability $ - $ 324,045 $ 72,225 $ - $ 396,270 |
Common Stock and Warrants
Common Stock and Warrants | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 4. Common Stock and Warrants | During the six months ended February 29, 2016, the Company had the following common stock related transactions: · issued 282,106 shares upon the cashless exercise of 556,667 options. · issued 90,000 shares on January 5, 2016 to the Company's directors and consultants pursuant to the 2006 Plan valued at $3.75 per share, the closing price of the Company's common stock on the day the stock was granted (See "NOTE 7 - Related Party Transactions" below for additional information). · received $474,300 pursuant to the Offering (See "NOTE 3 Private Placement") and issued 153,000 shares of common stock subsequent to February 29, 2016. 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. A summary of the Company's warrants outstanding and exercisable as of February 29, 2016 and August 31, 2015 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average Description February 29, 2016 August 31, 2015 Exercise Price Expiration Series H - 3,906 $ 0.83 February 1, 2016 Series I 921,875 921,875 $ 1.37 December 31, 2020 Series J 3,110,378 3,110,378 $ 1.12 December 31, 2020 Series K 3,110,378 3,110,378 $ 1.20 December 31, 2020 Series L 500,000 500,000 $ 1.20 December 7, 2020 Series M 375,000 - $ 2.18 December 31, 2020 Series N 767,000 - $ 3.38 December 31, 2020 Series O 153,000 - $ 3.10 October 31, 2017 Series P 76,500 - $ 3.70 April 30, 2018 Total 9,014,131 7,646,537 Series H Warrants to purchase common stock were issued on February 1, 2013, in connection with the self-directed registered offering of 1,875,000 units. The remaining 3,906 Series H Warrants outstanding as of August 31, 2015 expired on February 1, 2016. The Series I Warrant was issued on October 7, 2013, in connection with the 2013 Loan Agreement. On December 31, 2015, as consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017, the Company extended the maturity date of the Series I Warrant from October 6, 2018 to December 31, 2020. The Series J Warrant and Series K Warrant were issued on November 10, 2014 as a condition to the Investor entering into the 2015 Loan Agreement. On December 31, 2015, as consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017, the Company extended the maturity date of the Series J and K Warrants from November 9, 2019 to December 31, 2020. The Series L Warrant was issued on March 4, 2015 in connection with the March 2015 Loan. On December 7, 2015, the expiration date of the Series L Warrant was extended from March 4, 2020 to December 7, 2020. A Series M Warrant, with an exercise price of $2.12, to purchase 275,000 shares was issued on December 7, 2015 in connection with the December 2015 Loan. A Series M Warrant, with an exercise price of $2.34, to purchase 100,000 shares was issued on December 7, 2015 as an inducement for Creditor to extend the maturity date of the March 2015 Loan from September 4, 2015 to December 21, 2016. The Series N Warrant to purchase 767,000 shares was issued on December 31, 2015 pursuant to the 2015 Second Amended Loan Agreement as an inducement for Investor to extend the maturity date of the 2013 Note from December 31, 2015 to December 31, 2017. The Series O and Series P Warrant were issued in connection with the Offering described above under "NOTE 3 Private Placement". There are a total of approximately 2,586,214 warrants issuable pursuant to the 2013 Loan Agreement as described above under "NOTE 2 - Debt." |
Stock Options
Stock Options | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 5. Stock Options | Stock option grants pursuant to the 2006 Plan vest either immediately or over one to five years and expire ten years after the date of grant. Stockholders previously approved 5,000,000 shares for grant under the 2006 Plan, of which 3,216,665 remain available for grant and 883,334 were issued pursuant to the exercise of vested options as of February 29, 2016. 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. The Company issues new shares when options are exercised. The Company employs the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of "plain vanilla" options: Six Months Ended February 29, 2016 Expected dividend yield Expected stock price volatility 82 % Risk-free interest rate 2.06 % Expected term (in years) 7.67 Exercise price $ 3.46 Weighted-average grant date fair-value $ 2.64 A summary of the Company's stock option activity for the six months ended February 29, 2016 and year ended August 31, 2015 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($) Outstanding at August 31, 2014 1,325,837 2.68 Grants 15,000 1.40 Forfeitures (73,335 ) 2.46 Outstanding at August 31, 2015 1,267,502 2.68 Grants 65,000 3.46 Forfeitures (55,834 ) 3.23 Exercises (556,667 ) 2.22 Outstanding at February 29, 2016 720,001 3.06 7.77 years $ 537,500 Exercisable at February 29, 2016 175,001 3.41 6.80 years $ 143,050 Available for grant at February 29, 2016 3,216,665 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 February 29, 2016. 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 $3.67 on February 29, 2016 and 670,000 outstanding options have an exercise price below $3.67 per share, as of February 29, 2016, there is intrinsic value to the Company's outstanding, in-the-money stock options. The following table sets forth the share-based compensation cost resulting from stock option grants, including those previously granted and vesting over time, that were recorded in the Company's Consolidated Statements of Operations for the three and six months ended February 29, 2016 and February 28, 2015: Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2016 2015 2016 2015 Stock Compensation Expense: SG&A 65,662 111,850 127,219 265,984 R&D 58,300 9,458 59,958 12,971 As of February 29, 2016, the Company had $267,303 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 2.75 years. The following table summarizes information about stock options outstanding and exercisable at February 29, 2016: 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 $ 0.80 15,000 6.81 $ 0.80 15,000 6.81 $ 0.80 1.40 15,000 8.80 1.40 15,000 8.80 1.40 2.50 10,000 5.10 2.50 10,000 5.10 2.50 2.90 565,000 7.91 2.90 65,000 7.91 2.90 3.46 65,000 9.85 3.46 20,000 9.85 3.46 4.98 16,667 2.03 4.98 16,667 2.03 4.98 5.94 33,334 4.82 5.94 33,334 4.82 5.94 Total 720,001 7.77 $ 3.06 175,001 6.80 $ 3.41 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 6. Net Loss Per Share | During the three and six months ended February 29, 2016 and three and six months ended February 28 2015, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects of warrants, stock options and convertible debt on net loss per share because to do so would be antidilutive. Following is the computation of basic and diluted net loss per share for the three and six months ended February 29, 2016 and three and six months ended February 28, 2015: Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2016 2015 2016 2015 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (1,809,083 ) $ (1,520,947 ) $ (3,133,032 ) $ (4,780,195 ) Denominator: Weighted average number of common shares outstanding 26,866,729 24,931,888 26,719,672 24,620,165 Basic and diluted EPS $ (0.07 ) $ (0.06 ) $ (0.12 ) $ (0.19 ) 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 720,001 1,267,502 720,001 1,267,502 Warrants 9,014,131 8,918,851 9,014,131 8,918,851 Convertible debt 2,765,294 3,240,151 2,765,294 3,240,151 Warrants issuable upon conversion of debt (See "NOTE 2 - Convertible Promissory Note" above) 2,586,214 3,240,151 2,586,214 3,240,151 Total shares not included in the computation of diluted losses per share 15,085,640 16,666,655 15,085,640 16,666,655 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 7. Related Party Transactions | A related party with respect to the Company is generally defined as any person (i) (and, if a natural person, inclusive of his or her immediate family) that holds 10% or more of the Company's securities, (ii) that is part of the Company's management, (iii) that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. For services rendered in the capacity of a Board member, non-employee Board members received $4,250 per quarter through February 29, 2016, increasing to $4,500 per quarter thereafter. During the three months ended February 29, 2016 and February 28, 2015, the Company incurred $8,500 and $8,500, respectively in cash based Board compensation. During the six months ended February 29, 2016 and February 28, 2015, the Company incurred $17,000 and $17,000, respectively in cash based Board compensation. The Company grants stock options and common stock for services rendered by certain individuals, including the Company's non-employee directors and sole officer, Mr. Conklin. During the three months ended February 29, 2016 and February 28, 2015, the Company recognized net compensation expense related to stock options issued to our non-employee directors and executive of $49,162 and $106,827, respectively. During the six months ended February 29, 2016 and February 28, 2015, the Company recognized net compensation expense related to stock options issued to our non-employee directors and executive of $109,890 and $258,910, respectively. The law firm of Sierchio & Partners, LLP (formerly Sierchio & Company, LLP), of which Joseph Sierchio, one of the Company's directors, is a principal, has provided counsel to the Company since its inception. During the three months ended February 29, 2016 and February 28, 2015, the law firm of Sierchio & Partners, LLP provided $100,629 and $34,785, respectively, of legal services. During the six months ended February 29, 2016 and February 28, 2015, the law firm of Sierchio & Partners, LLP provided $147,594 and $83,695, respectively, of legal services. At February 29, 2016, the Company owed Sierchio & Partners, LLP $68,400 which is included in accounts payable. On October 7, 2013, the Company entered into the 2013 Loan Agreement with Investor. On November 10, 2014, the Company and Investor entered into the 2015 Loan Agreement resulting in the extension of the 2013 Note's maturity date to December 31, 2015 and the issuance of a Series J Warrant to purchase 3,110,378 shares of our common stock and a Series K Warrant to purchase 3,110,378 shares of our common stock. On December 31, 2015, the Company entered into the 2015 Second Amended Loan Agreement with Investor resulting in the extension of the 2013 Note's maturity date to December 31, 2017 and the issuance of a Series N Warrant to purchase 767,000 shares of our common stock. Additionally, as consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017, the Company extended the maturity date of the Series I Warrant to purchase 921,875 shares of common stock from October 6, 2018 to December 31, 2020, and extended the maturity date of the Series J Warrant to purchase 3,110,378 shares of common stock and Series K Warrant to purchase 3,110,378 shares of common stock from November 9, 2019 to December 31, 2020. For more information, see "NOTE 2 - Debt" above. During the three months ended February 29, 2016, Investor purchased 153 Units related to the February 2016 Private Placement Offering and the Company will issue 153,000 shares of common stock, 153,000 Series O Warrants, and 76,500 Series P Warrants. The Company received $474,300. For more information, see "NOTE 3 Private Placement" above. On December 7, 2015, the Company entered into a Bridge Loan Agreement with the Investor pursuant to which the Company may borrow up to $550,000; of which $400,000 was advanced on October 7, 2015 and $150,000 on December 22, 2015 (each advance includes an additional $5 related to wire fees). As a condition to the Investor's entry into the December 2015 Loan Agreement, the Company issued the Investor a Series M Stock Purchase Warrant to purchase up to 275,000 shares of the Company's common stock for a period of five years, with an exercise price of $2.34. Additionally, as consideration for Investor agreeing to extend the 2013 Note maturity date to December 31, 2017, the Company extended the maturity date of the Series M Warrant to purchase 275,000 shares of common stock from December 7, 2020 to December 31, 2020. For more information, see "NOTE 2 Debt" above. During 2015, the Company received $765,156 upon the Investor's exercise of 921,875 Series H Warrants, for an equal number of shares, originally issued on February 1, 2013 pursuant to the Company's $1.2 million self-directed financing. At February 29, 2016, the Company had $25,720 payable to Investor as the result of a short-term cash advance. 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 8. Subsequent Events | Management has reviewed material events subsequent of the quarterly period ended February 29, 2016 and prior to the filing of financial statements in accordance with FASB ASC 855 "Subsequent Events". Subsequent to the quarter ended February 29, 2016, the Company entered into subscription agreements with 27 subscribers for the purchase and sale of 288 Units pursuant to the Offering for aggregate proceeds of $892,800. The Company issued to the subscribers 288,000 shares of common stock, Series O Warrants to purchase 288,000 shares of common stock and Series P Warrants to purchase 144,000 shares of common stock. On March 31, 2016, the Company entered into a subscription agreement with the Investor for purchase and sale of 177 Units on the same terms and conditions as investors in the Offering as payment for $548,700 of the $550,000 due from the December 2015 Loan. The Company issued the Investor 177,000 shares of common stock, a Series O Warrant to purchase 177,000 shares of common stock and a Series P Warrant to purchase 88,500 shares of common stock. |
Basis of Presentation, Organi15
Basis of Presentation, Organization, Recent Accounting Pronouncements and Going Concern (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Basis Of Presentation Organization Recent Accounting Pronouncements And Going Concern Policies | |
Basis of Presentation | The unaudited financial statements of SolarWindow Technologies, Inc. (the "Company") as of February 29, 2016, and for the three and six months ended February 29, 2016 and February 28, 2015, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and include the Company's wholly-owned subsidiaries, Kinetic Energy Corporation ("KEC"), and New Energy Solar Corporation ("New Energy Solar"). Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended August 31, 2015, as filed with the Securities and Exchange Commission as part of the Company's Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year. |
Organization | SolarWindow Technologies, Inc. was incorporated in the State of Nevada on May 5, 1998, under the name "Octillion Corp." On December 2, 2008, the Company amended its Articles of Incorporation to effect a change of name to New Energy Technologies, Inc. Effective as of March 9, 2015, the Company amended its Articles of Incorporation to change its name to SolarWindow Technologies, Inc. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Kinetic Energy Corporation ("KEC") and New Energy Solar Corporation. KEC was incorporated on June 19, 2008, in the State of Nevada and holds the patents related to the Company's MotionPower technology. The Company's business activities related to the MotionPower technology are conducted through KEC. New Energy Solar was incorporated on February 9, 2009, in the State of Florida and entered into agreements with The University of South Florida Research Foundation ("USF") to sponsor research related to the Company's SolarWindow technology. On February 18, 2015, the Company terminated the license agreement entered into with USF which originated on June 21, 2010. On March 9, 2015, the Company changed its name to "SolarWindow Technologies, Inc." in order to appropriately align the corporate name and brand identity. The Company's ticker symbol changed to WNDW. The Company has been developing two sustainable electricity generating systems. These novel technologies are branded as SolarWindow and MotionPower. On March 2, 2015, the Company announced its exclusive focus on SolarWindow. The Company's SolarWindow technology provides the ability to harvest light energy from the sun and artificial sources and generate electricity from a transparent coating of organic photovoltaic solar cells. The Company's SolarWindow transparent electricity generating coatings are the subject of patent pending technologies. Initially being developed for application on glass surfaces, SolarWindow coatings could potentially be used on any of the more than 85 million commercial and residential buildings in the United States alone. The Company's SolarWindow product development programs involve ongoing research and development efforts, and the commitment of significant resources to support the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by its contract engineers, scientists, and consultants. As such, the Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company's technology before another company develops similar technology and products. |
Recent Accounting Pronouncements | In April 2015, the Financial Accounting Standards Board (" FASB ASU In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810 and significantly changes the consolidation analysis required under U.S. GAAP relating to whether or not to consolidate certain legal entities. Early adoption is permitted. The Company's effective date for adoption is January 1, 2016. The Company does not expect this accounting update to have a material effect on its consolidated financial statements in future periods, although that could change. On May 28, 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, Topic 606, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The standard is effective for annual periods beginning after December 15, 2017. The Company has not yet selected a transition method and does not expect this accounting update to have a material effect on its consolidated financial statements in future periods. 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. |
Going Concern | The Company does not have any commercialized products and has not generated any revenue since inception. The Company has an accumulated deficit of $32,172,046 and cash of $188,713 as of February 29, 2016, and does not have positive cash flows from operating activities. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business. Beginning on February 18, 2016, the Company, initiated an offering pursuant to a Private Placement Memorandum dated February 16, 2016 (the "Offering") for the sale to accredited investors of units of the Company's equity securities (each a ""Unit"" and collectively, the ""Units""). Subsequent to quarter end, the Company received $892,800 from the sale of 288 Units pursuant to the Offering as defined in Note 3 below (See Note 3 and Note 8 below). Based upon its current and near term anticipated level of operations and expenditures, the Company believes that cash on hand should be sufficient to enable it to continue operations through July 2016. If adequate funds are not available on reasonable terms, or at all, it would result in a material adverse effect on the Company's business, operating results, financial condition and prospects. In particular, the Company may be required to delay, reduce the scope of or terminate its research programs, sell rights to its SolarWindow technology and/or MotionPower TM In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements. |
Private Placement (Tables)
Private Placement (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Private Placement Tables | |
Summary of quantitative information derivative liability | A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company's derivative liability that is categorized within Level 3 of the fair value hierarchy as of February 29, 2016 is as follows: Common stock issuable upon exercise of Series O Warrants 153,000 Common stock issuable upon exercise of Series P Warrants 76,500 Stock price $3.67 Volatility (Annual) 80% Strike price $3.10, Series O Warrants; $3.70, Series P Warrants Risk-free rate 0.78% Maturity date 32 months Probability of Reset Adjustment 75% |
Fair value of derivative liabilities | The following table sets forth the Company's derivative liabilities that were accounted for at fair value on a recurring basis categorized within Level 3 of the fair value hierarchy as of February 29, 2016: Balance at August 31, 2015 Initial valuation of derivative liabilities upon issuance of new securities during the period Increase (decrease) in fair value of derivative liabilities Fair value of derivatives upon reclass to additional paid-in capital Balance at February 29, 2016 Warrant liability $ - $ 324,045 $ 72,225 $ - $ 396,270 |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Common Stock And Warrants Tables | |
Warrants outstanding and exercisable | A summary of the Company's warrants outstanding and exercisable as of February 29, 2016 and August 31, 2015 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average Description February 29, 2016 August 31, 2015 Exercise Price Expiration Series H - 3,906 $ 0.83 February 1, 2016 Series I 921,875 921,875 $ 1.37 December 31, 2020 Series J 3,110,378 3,110,378 $ 1.12 December 31, 2020 Series K 3,110,378 3,110,378 $ 1.20 December 31, 2020 Series L 500,000 500,000 $ 1.20 December 7, 2020 Series M 375,000 - $ 2.18 December 31, 2020 Series N 767,000 - $ 3.38 December 31, 2020 Series O 153,000 - $ 3.10 October 31, 2017 Series P 76,500 - $ 3.70 April 30, 2018 Total 9,014,131 7,646,537 |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Stock Options Tables | |
Fair value of each option award | The Company employs the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of "plain vanilla" options: Six Months Ended February 29, 2016 Expected dividend yield Expected stock price volatility 82 % Risk-free interest rate 2.06 % Expected term (in years) 7.67 Exercise price $ 3.46 Weighted-average grant date fair-value $ 2.64 |
Stock option activity | A summary of the Company's stock option activity for the six months ended February 29, 2016 and year ended August 31, 2015 and related information follows: Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($) Outstanding at August 31, 2014 1,325,837 2.68 Grants 15,000 1.40 Forfeitures (73,335 ) 2.46 Outstanding at August 31, 2015 1,267,502 2.68 Grants 65,000 3.46 Forfeitures (55,834 ) 3.23 Exercises (556,667 ) 2.22 Outstanding at February 29, 2016 720,001 3.06 7.77 years $ 537,500 Exercisable at February 29, 2016 175,001 3.41 6.80 years $ 143,050 Available for grant at February 29, 2016 3,216,665 |
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 Consolidated Statements of Operations for the three and six months ended February 29, 2016 and February 28, 2015: Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2016 2015 2016 2015 Stock Compensation Expense: SG&A 65,662 111,850 127,219 265,984 R&D 58,300 9,458 59,958 12,971 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at February 29, 2016: 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 $ 0.80 15,000 6.81 $ 0.80 15,000 6.81 $ 0.80 1.40 15,000 8.80 1.40 15,000 8.80 1.40 2.50 10,000 5.10 2.50 10,000 5.10 2.50 2.90 565,000 7.91 2.90 65,000 7.91 2.90 3.46 65,000 9.85 3.46 20,000 9.85 3.46 4.98 16,667 2.03 4.98 16,667 2.03 4.98 5.94 33,334 4.82 5.94 33,334 4.82 5.94 Total 720,001 7.77 $ 3.06 175,001 6.80 $ 3.41 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Net Loss Per Share Tables | |
Computation of basic and diluted net loss per share | Following is the computation of basic and diluted net loss per share for the three and six months ended February 29, 2016 and three and six months ended February 28, 2015: Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2016 2015 2016 2015 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (1,809,083 ) $ (1,520,947 ) $ (3,133,032 ) $ (4,780,195 ) Denominator: Weighted average number of common shares outstanding 26,866,729 24,931,888 26,719,672 24,620,165 Basic and diluted EPS $ (0.07 ) $ (0.06 ) $ (0.12 ) $ (0.19 ) 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 720,001 1,267,502 720,001 1,267,502 Warrants 9,014,131 8,918,851 9,014,131 8,918,851 Convertible debt 2,765,294 3,240,151 2,765,294 3,240,151 Warrants issuable upon conversion of debt (See "NOTE 2 - Convertible Promissory Note" above) 2,586,214 3,240,151 2,586,214 3,240,151 Total shares not included in the computation of diluted losses per share 15,085,640 16,666,655 15,085,640 16,666,655 |
Basis of Presentation, Organi20
Basis of Presentation, Organization, Recent Accounting Pronouncements and Going Concern (Details Narrative) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 | Feb. 28, 2015 | Aug. 31, 2014 |
Organization And Going Concern Details Narrative | ||||
Accumulated deficit | $ 32,172,046 | $ 29,039,014 | ||
Cash and cash equivalents | $ 188,713 | $ 228,465 | $ 167,068 | $ 785,237 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Interest expense | $ 83,871 | $ 56,077 | $ 154,438 | $ 111,804 |
Accretion of debt discount | 621,555 | 649,038 | 1,284,321 | 3,106,948 |
Convertible Promissory Note [Member] | ||||
Interest expense | 60,774 | 56,077 | 120,506 | 111,804 |
Accretion of debt discount | 426,859 | $ 649,038 | 1,083,109 | $ 3,106,948 |
Bridge Loan [Member] | ||||
Interest expense | 12,072 | |||
Accretion of debt discount | 143,262 | |||
Bridge Loan One [Member] | ||||
Interest expense | 11,025 | 21,861 | ||
Accretion of debt discount | $ 6,516 | $ 57,950 |
Private Placement (Details)
Private Placement (Details) | 6 Months Ended |
Feb. 29, 2016$ / sharesshares | |
Common stock issuable upon exercise of Series O Warrants | shares | 153,000 |
Common stock issuable upon exercise of Series P Warrants | shares | 76,500 |
Stock price | $ 3.67 |
Volatility (Annual) | 80.00% |
Risk-free rate | 0.78% |
Maturity date | 32 months |
Probability of Reset Adjustment | 75.00% |
Minimum [Member] | |
Strike price | $ 3.10 |
Maximum [Member] | |
Strike price | $ 3.70 |
Private Placement (Details 1)
Private Placement (Details 1) | 6 Months Ended |
Feb. 29, 2016USD ($) | |
Private Placement Details 1 | |
Beginning balance, warrant liability | |
Initial valuation of derivative liabilities upon issuance of new securities during the period | $ 324,045 |
Increase (decrease) in fair value of derivative liabilities | $ 72,225 |
Fair value of derivatives upon reclass to additional paid-in capital | |
Ending balance, warrant liability | $ 396,270 |
Private Placement (Details Narr
Private Placement (Details Narrative) | 6 Months Ended |
Feb. 29, 2016USD ($) | |
Private Placement Details Narrative | |
Proceed from sale of units | $ 474,300 |
No. of units | 153 |
Sale of units | $ 3,100 |
Common Stock and Warrants (Deta
Common Stock and Warrants (Details) - $ / shares | 6 Months Ended | |
Feb. 29, 2016 | Aug. 31, 2015 | |
Shares of Common Stock Issuable from Warrants | 9,014,131 | 7,646,537 |
Series J [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |
Series K [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |
Series L [Member] | ||
Shares of Common Stock Issuable from Warrants | 500,000 | |
Series H [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,906 | |
Exercise Price | $ 0.83 | |
Expiration | Feb. 1, 2016 | |
Series I [Member] | ||
Shares of Common Stock Issuable from Warrants | 921,875 | 921,875 |
Exercise Price | $ 1.37 | |
Expiration | Dec. 31, 2020 | |
Series J [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |
Exercise Price | $ 1.12 | |
Expiration | Dec. 31, 2020 | |
Series K [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |
Exercise Price | $ 1.2 | |
Expiration | Dec. 31, 2020 | |
Series L [Member] | ||
Shares of Common Stock Issuable from Warrants | 500,000 | |
Exercise Price | $ 1.2 | |
Expiration | Dec. 7, 2020 | |
Series M [Member] | ||
Shares of Common Stock Issuable from Warrants | 375,000 | |
Exercise Price | $ 2.18 | |
Expiration | Dec. 31, 2020 | |
Series N [Member] | ||
Shares of Common Stock Issuable from Warrants | 767,000 | |
Exercise Price | $ 3.38 | |
Expiration | Dec. 31, 2020 | |
Series O [Member] | ||
Shares of Common Stock Issuable from Warrants | 153,000 | |
Exercise Price | $ 3.1 | |
Expiration | Oct. 31, 2017 | |
Series P [Member] | ||
Shares of Common Stock Issuable from Warrants | 76,500 | |
Exercise Price | $ 3.7 | |
Expiration | Apr. 30, 2018 |
Common Stock and Warrants (De26
Common Stock and Warrants (Details Narrative) - USD ($) | 6 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Aug. 31, 2015 | |
Common Stock And Warrants Details Narrative | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares outstanding | 26,944,721 | 26,572,615 | |
Cashless exercise options | 556,667 | ||
Common stock, shares issued during period | 153,000 | ||
Amount received upon the exercise of warrants | $ 474,300 | $ 501,242 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 6 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Stock Options Details | ||
Expected dividend yield | ||
Expected stock price volatility | 82.00% | |
Risk-free interest rate | 2.06% | |
Expected term (in years) | 7 years 8 months 1 day | |
Exercise price | $ 3.46 | $ 1.40 |
Weighted-average grant date fair-value | $ 2.64 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 6 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Number of Options | ||
Outstanding Beginning | 1,267,502 | 1,325,837 |
Grants | 65,000 | 15,000 |
Forfeitures | (55,834) | (73,335) |
Exercises | (556,667) | |
Outstanding Ending | 720,001 | 1,267,502 |
Exercisable Ending | 175,001 | |
Available for grant Ending | 3,216,665 | |
Weighted Average Exercise Price ($) | ||
Weighted-average exercise price Beginning | $ 2.68 | $ 2.68 |
Grants | 3.46 | 1.40 |
Forfeitures | 3.23 | 2.46 |
Exercises | 2.22 | |
Weighted-average exercise price Ending | 3.06 | $ 2.68 |
Exercisable Ending | $ 3.41 | |
Weighted Average Remaining Contractual Term | ||
Outstanding Ending | 7 years 9 months 7 days | |
Exercisable Ending | 6 years 9 months 18 days | |
Aggregate Intrinsic Value ($) | ||
Outstanding Ending | $ 537,500 | |
Exercisable Ending | $ 143,050 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Stock Compensation Expense: | ||||
Selling, general and administrative | $ 65,662 | $ 111,850 | $ 127,219 | $ 265,984 |
Research and development | $ 58,300 | $ 9,458 | $ 59,958 | $ 12,971 |
Stock Options (Details 3)
Stock Options (Details 3) - $ / shares | 6 Months Ended | |||
Feb. 29, 2016 | Aug. 31, 2015 | Feb. 28, 2015 | Aug. 31, 2014 | |
Number of Shares Subject to Outstanding Options | 720,001 | 1,267,502 | 1,267,502 | 1,325,837 |
Weighted average contractural life (years) | 7 years 9 months 7 days | |||
Weighted-average exercise price | $ 3.06 | $ 2.68 | $ 2.68 | $ 2.68 |
Number of Shares Subject to options exercisable | 175,001 | |||
Weighted average contractural life (years) of options exercisable | 6 years 9 months 18 days | |||
Weighted-average exercise price of options exercisable | $ 3.41 | |||
$0.80 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 15,000 | |||
Weighted average contractural life (years) | 6 years 9 months 22 days | |||
Weighted-average exercise price | $ 0.80 | |||
Number of Shares Subject to options exercisable | 15,000 | |||
Weighted average contractural life (years) of options exercisable | 6 years 9 months 22 days | |||
Weighted-average exercise price of options exercisable | $ 0.80 | |||
$1.40 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 15,000 | |||
Weighted average contractural life (years) | 8 years 9 months 18 days | |||
Weighted-average exercise price | $ 1.40 | |||
Number of Shares Subject to options exercisable | 15,000 | |||
Weighted average contractural life (years) of options exercisable | 8 years 9 months 18 days | |||
Weighted-average exercise price of options exercisable | $ 1.40 | |||
$2.50 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 10,000 | |||
Weighted average contractural life (years) | 5 years 1 month 6 days | |||
Weighted-average exercise price | $ 2.50 | |||
Number of Shares Subject to options exercisable | 10,000 | |||
Weighted average contractural life (years) of options exercisable | 5 years 1 month 6 days | |||
Weighted-average exercise price of options exercisable | $ 2.50 | |||
$2.90 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 565,000 | |||
Weighted average contractural life (years) | 7 years 10 months 28 days | |||
Weighted-average exercise price | $ 2.90 | |||
Number of Shares Subject to options exercisable | 65,000 | |||
Weighted average contractural life (years) of options exercisable | 7 years 10 months 28 days | |||
Weighted-average exercise price of options exercisable | $ 2.90 | |||
$3.46 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 65,000 | |||
Weighted average contractural life (years) | 9 years 10 months 6 days | |||
Weighted-average exercise price | $ 3.46 | |||
Number of Shares Subject to options exercisable | 20,000 | |||
Weighted average contractural life (years) of options exercisable | 9 years 10 months 6 days | |||
Weighted-average exercise price of options exercisable | $ 3.46 | |||
$4.98 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 16,667 | |||
Weighted average contractural life (years) | 2 years 11 days | |||
Weighted-average exercise price | $ 4.98 | |||
Number of Shares Subject to options exercisable | 16,667 | |||
Weighted average contractural life (years) of options exercisable | 2 years 11 days | |||
Weighted-average exercise price of options exercisable | $ 4.98 | |||
$5.94 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 33,334 | |||
Weighted average contractural life (years) | 4 years 9 months 26 days | |||
Weighted-average exercise price | $ 5.94 | |||
Number of Shares Subject to options exercisable | 33,334 | |||
Weighted average contractural life (years) of options exercisable | 4 years 9 months 26 days | |||
Weighted-average exercise price of options exercisable | $ 5.94 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) | 6 Months Ended |
Feb. 29, 2016USD ($)$ / sharesshares | |
Stock option available for grant shares | 3,216,665 |
Closing stock option exercise price | $ / shares | $ 3.67 |
Stock option outstanding | 670,000 |
Stock based compensation unrecognized | $ | $ 267,303 |
Expected period for recognition | 2 years 9 months |
2006 Incentive Stock Option Plan [Member] | |
Stock option approved | 5,000,000 |
Stock option available for grant shares | 3,216,665 |
Stock option exercise | 883,334 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | Aug. 31, 2015 | |
Numerator: | |||||
Loss available to common stockholders' | $ (1,809,083) | $ (1,520,947) | $ (3,133,032) | $ (4,780,195) | $ (8,092,744) |
Denominator: | |||||
Weighted average number of common shares outstanding | 26,866,729 | 24,931,888 | 26,719,672 | 24,620,165 | |
Basic and diluted EPS | $ (0.07) | $ (0.06) | $ (0.12) | $ (0.19) | |
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 | 720,001 | 1,267,502 | 720,001 | 1,267,502 | |
Warrants | 9,014,131 | 8,918,851 | 9,014,131 | 8,918,851 | |
Convertible debt | 2,765,294 | 3,240,151 | 2,765,294 | 3,240,151 | |
Warrants issuable upon conversion of debt (See "NOTE 2 - Convertible Promissory Note" above) | 2,586,214 | 3,240,151 | 2,586,214 | 3,240,151 | |
Total shares not included in the computation of diluted losses per share | 15,085,640 | 16,666,655 | 15,085,640 | 16,666,655 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2016USD ($)shares | Feb. 28, 2015USD ($) | Feb. 29, 2016USD ($)shares | Feb. 28, 2015USD ($) | |
Common stock issuable upon exercise of Series O Warrants | shares | 153,000 | 153,000 | ||
Common stock issuable upon exercise of Series P Warrants | shares | 76,500 | 76,500 | ||
No. of units | 153 | 153 | ||
Increase (decrease) in related party payable | $ 25,720 | |||
Board member [Member] | ||||
Net compensation expense | $ 8,500 | $ 8,500 | 17,000 | $ 17,000 |
Mr. Conklin [Member] | ||||
Net compensation expense | 49,162 | 106,827 | 109,890 | 258,910 |
Sierchio & Partners [Member] | ||||
Legal services | 100,629 | $ 34,785 | 147,594 | $ 83,695 |
Accounts payable | $ 68,400 | $ 68,400 |