Document and Entity Information
Document and Entity Information | 12 Months Ended |
Aug. 31, 2016 | |
Document And Entity Information | |
Entity Registrant Name | SolarWindow Technologies, Inc. |
Entity Central Index Key | 1,071,840 |
Document Type | S1 |
Document Period End Date | Aug. 31, 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 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Aug. 31, 2016 | Aug. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 2,509,215 | $ 228,465 |
Deferred research and development costs | 349,302 | 106,135 |
Prepaid expenses and other current assets | 15,752 | 21,152 |
Total current assets | 2,874,269 | 355,752 |
Equipment, net of accumulated depreciation of $33,439 and $27,751, respectively | 21,331 | 30,535 |
Total assets | 2,895,600 | 386,287 |
Current liabilities | ||
Accounts payable | 184,743 | 97,438 |
Interest payable to related party | 66,401 | 443,498 |
Bridge note payable to related party, net of discount of $74,702 and $6,516 | 525,298 | 593,484 |
Convertible promissory notes payable to related party, net of discount of $0 and $879,808, respectively | 18,146 | 2,120,192 |
Total current liabilities | 794,588 | 3,254,612 |
Convertible promissory notes payable to related party, net of discount of $1,650,120 | 1,349,880 | |
Interest payable to related party | 669,244 | |
Total liabilities | 2,813,712 | 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, 28,500,221 and 26,572,615 shares issued and outstanding at at August 31, 2016 and August 31, 2015 | 28,500 | 26,572 |
Additional paid-in capital | 33,729,715 | 26,144,117 |
Retained deficit | (33,676,327) | (29,039,014) |
Total stockholders' equity (deficit) | 81,888 | (2,868,325) |
Total liabilities and stockholders' equity (deficit) | $ 2,895,600 | $ 386,287 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Aug. 31, 2016 | Aug. 31, 2015 |
Current assets | ||
Equipment, net of accumulated depreciation | $ 39,255 | $ 27,751 |
Current liabilities | ||
Bridge note payable to related party, net of discount | 74,702 | 6,516 |
Convertible promissory note, net of discount | 0 | $ 879,808 |
Convertible promissory notes payable to related party, net of discount | $ 1,650,120 | |
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 | 28,500,221 | 26,572,615 |
Common stock, shares outstanding | 28,500,221 | 26,572,615 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Consolidated Statements Of Operations | ||
Revenue | ||
Operating expense | ||
Selling, general and administrative | 2,318,443 | 2,432,158 |
Research and development | 822,922 | 683,132 |
Total operating expense | 3,141,365 | 3,115,290 |
Loss from operations | (3,141,365) | (3,115,290) |
Other income (expense) | ||
Interest expense | (308,983) | (250,348) |
Accretion of debt discount | (2,335,954) | (4,727,106) |
Change in fair value of derivative liability | 1,714,395 | |
Loan conversion inducement expense | (565,406) | |
Total other income (expense) | (1,495,948) | (4,977,454) |
Net loss | $ (4,637,313) | $ (8,092,744) |
Basic and Diluted Loss per Common Share | $ (0.17) | $ (0.32) |
Weighted average number of common shares outstanding - basic and diluted | 27,295,540 | 25,131,836 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Additional Paid-In Capital | 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 restricted stock issuance, Shares | 60,000 | |||
Stock based compensation related to restricted stock issuance, Amount | $ 60 | 83,940 | 84,000 | |
Stock based compensation due to common stock purchase options | 436,774 | 436,774 | ||
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 restricted stock issuance, Shares | 90,000 | |||
Stock based compensation related to restricted stock issuance, Amount | $ 90 | 337,410 | 337,500 | |
Stock based compensation due to common stock purchase options | 308,763 | 308,763 | ||
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 units issued, Shares | 618,000 | |||
February 2016 Private Placement units issued, Amount | $ 619 | 2,480,587 | 2,481,206 | |
February 2016 Private Placement derivative liability at inception, Share | ||||
February 2016 Private Placement derivative liability at inception,Amount | (1,714,395) | (1,714,395) | ||
June 2016 Private Placement units issued, Share | 937,500 | |||
June 2016 Private Placement units issued, Amount | $ 937 | 2,999,063 | 3,000,000 | |
Net loss | (4,637,313) | (4,637,313) | ||
Ending Balance, Shares at Aug. 31, 2016 | 28,500,221 | |||
Ending Balance, Amount at Aug. 31, 2016 | $ 28,500 | $ 33,729,715 | $ (33,676,327) | $ 81,888 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (4,637,313) | $ (8,092,744) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 11,504 | 9,623 |
Stock based compensation expense | 646,263 | 520,774 |
Change in fair value of derivative liability | (1,714,395) | |
Loan conversion inducement expense | 565,406 | |
Accretion of debt discount | 2,335,954 | 4,727,106 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in deferred research and development costs | (243,167) | 43,865 |
Decrease (increase) in prepaid expenses and other current assets | 5,400 | (6,895) |
Increase (decrease) in accounts payable | 87,305 | (46,801) |
Increase (decrease) in interest payable | 308,983 | 250,347 |
Net cash used in operating activities | (2,634,060) | (2,594,725) |
Cash flows from investing activity | ||
Purchase of equipment | (2,300) | (15,561) |
Net cash used in investing activity | (2,300) | (15,561) |
Cash flows from financing activities | ||
Proceeds from the issuance of equity securities | 4,367,100 | 1,453,514 |
Proceeds from promissory notes | 550,010 | 600,000 |
Net cash provided by financing activities | 4,917,110 | 2,053,514 |
Change in cash and cash equivalents | 2,280,750 | (556,772) |
Cash and cash equivalents at beginning of period | 228,465 | 785,237 |
Cash and cash equivalents at end of period | 2,509,215 | 228,465 |
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 | 3,299,750 |
Debt discount recorded for beneficial conversion feature | 165,640 | |
Common stock issued for conversion of note payable | 548,700 | |
Derivative liability recorded from the sale of equity securities | $ 1,714,395 |
Organization and Going Concern
Organization and Going Concern | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 1. Organization and Going Concern | Organization SolarWindow Technologies, Inc. (the Company KEC was incorporated on June 19, 2008, in the State of Nevada and holds the patents related to the Companys MotionPower technology. The Companys 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 On March 9, 2015, the Company changed its name to SolarWindow Technologies, Inc. to align the company name with its brand identity. The Companys 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 Companys 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 Companys 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 Companys 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 Companys activities are subject to significant risks and uncertainties, including failing to secure additional funding to commercialize the Companys SolarWindow technology before another company develops a similar technology and products. Going Concern The Company does not have any commercialized products and has not generated any revenue since inception. The Company has a retained deficit of $33,676,327 and cash of $2,509,215 as of August 31, 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 Companys ability to establish itself as a profitable business. 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 June 2017. If adequate funds are not available on reasonable terms, or at all, it would result in a material adverse effect on the Companys 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 technology or other technologies or products based upon such technologies, or license the rights to such technologies or products on terms that are less favorable to the Company than might otherwise be available. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 2. Summary of Significant Accounting Policies | Principles of Consolidation These consolidated financial statements presented are those of the Company and its wholly owned subsidiaries, KEC, and New Energy Solar. All significant intercompany balances and transactions have been eliminated. Estimates The preparation of the Companys consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by managements application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions. Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. The Company has amounts deposited with financial institutions in excess of federally insured limits. Property, Plant, and Equipment Fixed assets are carried at cost, less accumulated depreciation and amortization. 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 income for the period. Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: Estimated Useful Lives Office equipment 3-5 years Furniture & equipment 5 - 7 years Fair Value Measurement The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs. Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts payable and interest payable approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Companys notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. Research and Development Research and development costs represent costs incurred to develop the Companys 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 development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed. Stock-Based Compensation The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes-Merton formula to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes-Merton formula requires management to make assumptions regarding the option lives, expected volatility, and risk free interest rates. See NOTE 6 Common Stock and Warrants and NOTE 7 - Stock Options for additional information on the Companys stock-based compensation plans. Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. Segment Reporting The Companys business is considered to be operating in one segment based upon the Companys 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) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See NOTE 8 - Net Loss Per Share for further discussion. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and will be effective for fiscal years beginning after December 15, 2015 and for interim periods within those fiscal years. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016-08 to further clarify the implementation guidance on principal versus agent considerations. The guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Companys 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. |
Debt
Debt | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 3. 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 Investor Series M Warrant 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 $458,777 discount was accreted through March 31, 2016. On March 31, 2016, the Investor received 177 PPM Units (as defined below under Note 4) from the conversion of $548,700 of the principal owed under the December 2015 Loan Agreement resulting in a remaining balance of $18,146. The remaining balance was evidenced by a new promissory note (the March 2016 Note As consideration for the Investor agreeing to extend the 2013 Note (defined below) maturity date to December 31, 2017 (as described below), the Company extended the expiration date of all of the Investors 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 year ended August 31, 2016, the Company recognized $18,076 of interest expense. During the year ended August 31, 2016, the Company recognized $458,777 of accretion related to the debt discount of 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 Creditor March 2015 Loan 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 accreted 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 Companys 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 years ended August 31, 2016, the Company recognized $44,742 and $20,891, respectively, of interest expense. Accretion related to the debt discount for the March 2015 Loan, Series L Warrant and Series M Warrant amounted to $170,614 and $293,234 during the years ended August 31, 2016 and 2015, 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 2013 Note Series I Warrant Series J Warrant Series K Warrant On November 10, 2014, the Company entered into an Amended Bridge Loan Agreement (the 2015 Loan Agreement Amended Note Units In order to induce the 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 Second Amended Note As consideration for the 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 the Investors 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 $246,637 and $229,457 during the years ended August 31, 2016 and 2015, respectively. Accretion of the debt discount related to the 2013 Loan Agreement as amended amounted to $1,706,563 and $4,433,872 during the years ended August 31, 2016 and 2015, respectively. The remaining debt discount related to the Series N Warrants and Series I, J and K Warrant expiration date extensions totals $1,650,120 and will be amortized through December 31, 2017. Principal maturities for notes payable for the years ending August 31 are as follows: 2017 $ 618,146 2018 3,000,000 Total $ 3,618,146 |
Private Placements
Private Placements | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 4. Private Placements | June 2016 Private Placement On June 20, 2016, the Company completed a self-directed offering of 937,500 units at a price of $3.20 per unit for $3,000,000 in aggregate proceeds (the June 2016 Private Placement The relative fair value of the common stock was estimated to be $1,338,000. The relative fair value of the Series Q Warrants and Series R Warrants was estimated to be $783,000 and $879,000, respectively, as determined based on the relative fair value allocation of the proceeds received. The Series Q Warrants were valued using the Black-Scholes option pricing model using the following variables: market price of common stock - $3.99 per share; estimated volatility 83%; 3-year risk free interest rate 0.87%; expected dividend rate - 0% and expected life - 3 years. The Series R Warrants were also valued using the Black-Scholes option pricing model using the following variables: market price of common stock - $3.99 per share; estimated volatility 83%; 5-year risk free interest rate 1.17%; expected dividend rate - 0% and expected life - 5 years. March 2016 Private Placement Beginning on February 18, 2016 and closing on March 31, 2016, the Company completed an offering pursuant to a Private Placement Memorandum dated February 16, 2016 (the Offering PPM Unit PM Units Series O Warrant Series P Warrant The terms of the Offering provided for a onetime reset adjustment (the Reset Adjustment Reset Price Reset Units |
Derivative Liability related to
Derivative Liability related to the PPM Units | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 5. Derivative Liability related to the PPM Units | The Reset Adjustment contained in the Offering did not have fixed settlement provisions because the number of PPM Units issued 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 Companys 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 at each quarter end until the termination date of the Reset Adjustment on September 30, 2016. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Companys derivative liability that is categorized within Level 3 of the fair value hierarchy during the year ended August 31, 2016 as follows: Common stock issuable upon exercise of Series O Warrants 618,000 Common stock issuable upon exercise of Series P Warrants 309,000 Stock price $ 3.13 - $4.19 Volatility (Annual) 80% - 83% Strike price $ 3.10, Series O Warrants; $3.70, Series P Warrants Risk-free rate 0.71% - 0.80% Series O Warrants; 0.71% - 0.79%, Series P Warrants Term 1.4 1.7 years Series O Warrants; 2.1 - 2.2 years, Series P Warrants Probability of Reset Adjustment 0% - 100 % As of August, 31, 2016, as a result of the June 2016 Private Placement, the Company had no plans to raise capital prior to the expiration date of the Reset Adjustment. As a result, the Company determined that the Reset Adjustment had no value as of August 31, 2016 resulting in the recognition of other income. The following table sets forth the Companys derivative liabilities that were accounted for at fair value on a recurring basis categorized within Level 3 of the fair value hierarchy during the year ended August 31, 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 Balance at August 31, 2016 Warrant liability $ - $ 1,714,395 $ (1,714,395 ) $ - |
Common Stock and Warrants
Common Stock and Warrants | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 6. Common Stock and Warrants | Common Stock At August 31, 2016, the Company had 300,000,000 authorized shares of common stock with a par value of $0.001 per share, 28,500,221 shares of common stock outstanding and 3,216,665 shares reserved for issuance under the Companys 2006 Long-Term Incentive Plan (the 2006 Plan Board During the year ended August 31, 2016, the Company had the following common stock related transactions: · issued 282,106 shares of common stock upon the cashless exercise of 556,667 options. · issued 30,000 shares of common stock on January 5, 2016 to each of the Companys three directors pursuant to the 2006 Plan (90,000 shares total) valued at $3.75 per share, the closing price of the Companys common stock on the day the stock was granted. · received $1,367,100 pursuant to the Offering for the purchase of 441 PPM Units resulting in the issuance of 441,000 shares of common stock (See NOTE 4 Private Placements). · converted loan principal of $548,700 from the December 2015 Loan Agreement in exchange for 177 PPM Units resulting in the issuance of 177,000 shares of common stock (See NOTE 3 Debt). · received $3,000,000 pursuant to the June 2016 Private Placement for the purchase of 937,500 units resulting in the issuance of 937,500 shares of common stock (See NOTE 4 Private Placements). During the year ended August 31, 2015, the Company had the following common stock related transactions: · issued 454,787 shares of common stock upon the cashless exercise of 625,000 Series G Warrants. · issued 1,751,216 shares of common stock as a result of the exercise of Series H Warrants for which the Company received $1,453,514. · issued 20,000 shares of common stock on January 26, 2015 to each of the Companys three directors pursuant to the 2006 Plan (60,000 shares total) valued at $1.40 per share, the closing price of the Companys common stock on the day the stock was granted. Warrants Each of the Companys warrants outstanding entitles the holder to purchase one share of the Companys common stock for each warrant share held. Other than the Series O Warrants and Series P Warrants, all of the following warrants may be exercised on a cashless basis. A summary of the Companys warrants outstanding and exercisable as of August 31, 2016 and 2015 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of August 31, Weighted Average Description 2016 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 - $ 2.34 December 31, 2020 Series N 767,000 - $ 3.38 December 31, 2020 Series O 618,000 - $ 3.10 October 31, 2017 Series P 309,000 - $ 3.70 April 30, 2018 Series Q 937,500 - $ 3.20 June 20, 2019 Series R 937,500 - $ 4.00 June 20, 2021 Total 11,586,631 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 the 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 the 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 $2.34, to purchase 275,000 shares of common stock 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 the 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 4 Private Placement. The Series Q and Series R Warrant were issued in connection with the June 2016 Private Placement described above under NOTE 4 Private Placement. There are a total of approximately 2,678,280 warrants issuable pursuant to the 2013 Loan Agreement as described above under NOTE 3 - Debt. |
Stock Options
Stock Options | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 7. 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 August 31, 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: Year Ended Year Ended August 31, 2016 August 31, 2015 Expected dividend yield Expected stock price volatility 82 % 137.5 % Risk-free interest rate 2.06 % 1.90 % Expected term (in years) 7.67 7.67 Exercise price $ 3.46 $ 1.40 Weighted-average grant date fair-value $ 2.64 $ 1.33 A summary of the Companys stock option activity for the years ended August 31, 2016 and 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 August 31, 2016 720,001 3.06 7.26 years 70,100 Exercisable at August 31, 2016 225,001 3.30 6.55 years 61,100 Available for grant at August 31, 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 Companys closing stock price on the last trading day of the period covered by this report and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all in-the-money option holders exercised their vested options on August 31, 2016. The intrinsic value of the option changes based upon the fair market value of the Companys common stock. Since the closing stock price was $2.92 on August 31, 2016 and 605,000 outstanding options have an exercise price below $2.92 per share, as of August 31, 2016, there is intrinsic value to the Companys outstanding, in-the-money stock options. There were 556,667 options exercised during the year ended August 31, 2016 on a cashless basis resulting in the issuance of 282,106 shares of common stock. The aggregate intrinsic value of the options exercised during the year ended August 31, 2016 was $1,237,333. 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 Companys Consolidated Statements of Operations for the years ended August 31, 2016 and 2015: Years Ended August 31, 2016 2015 Stock Compensation Expense: SG&A $ 211,406 $ 420,488 R&D 97,357 16,286 Total $ 308,763 $ 436,774 As of August 31, 2016, the Company had $145,716 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 2.25 years. The following table summarizes information about stock options outstanding and exercisable at August 31, 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 6.31 $ 0.80 15,000 6.31 $ 0.80 1.40 15,000 8.30 1.40 15,000 8.30 1.40 2.50 10,000 4.60 2.50 10,000 4.60 2.50 2.90 565,000 7.41 2.90 115,000 7.405 2.90 3.46 65,000 9.35 3.46 20,000 9.35 3.46 4.98 16,667 1.52 4.98 16,667 1.52 4.98 5.94 33,334 4.32 5.94 33,334 4.32 5.94 Total 720,001 7.26 $ 3.06 225,001 6.55 $ 3.30 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 8. Net Loss Per Share | During the years ended August 31, 2016 and 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 years ended August 31, 2016 and 2015: Years Ended August 31, 2016 2015 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (4,637,313 ) $ (8,092,744 ) Denominator: Weighted average number of common shares outstanding 27,295,540 25,131,836 Basic and diluted EPS $ (0.17 ) $ (0.32 ) 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 Warrants 11,586,631 7,646,537 Convertible debt 2,685,524 2,498,254 Warrants issuable upon conversion of debt (See "NOTE 3 - Debt" above) 2,678,280 2,498,254 Total shares not included in the computation of diluted losses per share 17,670,436 13,910,547 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 9. 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 Companys securities, (ii) that is part of the Companys 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. The law firm of Sierchio & Partners, LLP (formerly Sierchio & Company, LLP), of which Joseph Sierchio, one of the Companys directors, is a principal, has provided counsel to the Company since its inception. During the years ended August 31, 2016 and 2015, the law firm of Sierchio & Partners, LLP provided $291,951 and $235,459, respectively, of legal services. At August 31, 2016, the Company owed Sierchio & Partners, LLP $53,467 which is included in accounts payable. On October 7, 2013, the Company entered into the 2013 Loan Agreement with the Investor. On November 10, 2014, the Company and the Investor entered into the 2015 Loan Agreement resulting in the extension of the 2013 Notes 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 the Investor resulting in the extension of the 2013 Notes 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 the 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 3 - Debt 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 Investors 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 the 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 3 Debt above. During the year ended August 31, 2016, the Investor purchased 250 PPM Units related to the Offering resulting in the Company receiving $775,000. Additionally, the Investor converted $548,700 of principal owed under the December 2015 Loan Agreement in exchange for 177 PPM units. As a result, the Company issued 427,000 shares of common stock, 427,000 Series O Warrants, and 213,500 Series P Warrants. For more information, see NOTE 3 Debt and NOTE 4 Private Placement above. During the year ended August 31, 2016, the Investor purchased 468,750 units under the June 2016 Private Placement resulting in the Company receiving $1,500,000 and issuing 468,750 shares of common stock, 468,750 Series Q Warrants, and 468,750 Series R Warrants. For more information, see NOTE 4 Private Placement above. During 2015, the Company received $765,156 upon the Investors exercise of 921,875 Series H Warrants, for an equal number of shares, originally issued on February 1, 2013 pursuant to the Companys $1.2 million self-directed financing. During the year ended August 31, 2016, the Company received and repaid a short term cash advance from the Investor totaling $25,720. All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 10. Income Taxes | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Companys deferred tax assets at August 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 5,995,528 $ 4,817,277 Capitalized research and development 1,285,254 1,157,431 Depreciation (82 ) (5,615 ) Stock based compensation 1,207,988 1,425,291 Foreign affiliate interest expense 190,173 - Research and development credit carry forward 369,117 310,797 Total deferred tax assets 9,047,979 7,705,181 Less: valuation allowance (9,047,979 ) (7,705,181 ) Net deferred tax asset $ - $ - The net increase in the valuation allowance for deferred tax assets was $1,342,798 and $759,565 for the years ended August 31, 2016 and 2015, respectively. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in managements judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2016 available to offset future federal taxable income, if any, of $17,633,905, which will fully expire between the period from August 31, 2020 to August 31, 2036. Accordingly, there is no current tax expense for the years ended August 31, 2016 and 2015. In addition, the Company has research and development tax credit carry forwards of $369,117 at August 31, 2016, which are available to offset federal income taxes and begin to expire during the fiscal year ending August 31, 2027. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock. The effects of state income taxes were insignificant for the years ended August 31, 2016 and 2015. The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the years ended August 31, 2016 and 2015: 2016 2015 Income tax benefit at statutory rate $ 1,576,686 $ 2,751,533 Permanent differences (297,211 ) (2,046,348 ) Research and development credit 63,323 54,380 Change in valuation allowance (1,342,798 ) (759,565 ) $ - $ - The fiscal years 2014 through 2016 remain open to examination by federal authorities and other jurisdictions in which the Company operates. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Aug. 31, 2016 | |
Notes to Financial Statements | |
Note 11. Subsequent Events | Management has reviewed material events subsequent of the quarterly period ended May 31, 2016 and prior to the filing of financial statements in accordance with FASB ASC 855 Subsequent Events. On September 8, 2016, John Conklin, the Companys President & CEO, exercised 100,000 stock purchase options on a cashless basis resulting in the issuance of 30,120 shares of common stock. On November 15, 2016, each of the three members of the Companys board of directors were issued 40,000 shares of common stock pursuant to the 2006 Plan and entered into a lock-up agreement restricting their sale of 30,000 of those shares for a period of one year. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 31, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Principles of Consolidation | These consolidated financial statements presented are those of the Company and its wholly owned subsidiaries, KEC, and New Energy Solar. All significant intercompany balances and transactions have been eliminated. |
Estimates | The preparation of the Companys consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by managements application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions. |
Cash and Cash Equivalents | Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. The Company has amounts deposited with financial institutions in excess of federally insured limits. |
Property, Plant, and Equipment | Fixed assets are carried at cost, less accumulated depreciation and amortization. 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 income for the period. Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: Estimated Useful Lives Office equipment 3-5 years Furniture & equipment 5 - 7 years |
Fair Value Measurement | The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs. |
Fair Value of Financial Instruments | The carrying value of cash and cash equivalents, accounts payable and interest payable approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Companys notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. |
Research and Development | Research and development costs represent costs incurred to develop the Companys 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 development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed. |
Stock-Based Compensation | The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes-Merton formula to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes-Merton formula requires management to make assumptions regarding the option lives, expected volatility, and risk free interest rates. See NOTE 6 Common Stock and Warrants and NOTE 7 - Stock Options for additional information on the Companys stock-based compensation plans. |
Income Taxes | The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. |
Segment Reporting | The Companys business is considered to be operating in one segment based upon the Companys 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) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See NOTE 8 - Net Loss Per Share for further discussion. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and will be effective for fiscal years beginning after December 15, 2015 and for interim periods within those fiscal years. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016-08 to further clarify the implementation guidance on principal versus agent considerations. The guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Companys previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion. The Company believes that none of the new standards will have a significant impact on the financial statements. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Estimated useful lives | Estimated Useful Lives Office equipment 3-5 years Furniture & equipment 5 - 7 years |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Debt Tables | |
Principal maturities for notes payable | 2017 $ 618,146 2018 3,000,000 Total $ 3,618,146 |
Derivative Liability related 21
Derivative Liability related to the PPM Units (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Derivative Liability Related To Ppm Units Tables | |
Summary of quantitative information derivative liability | Common stock issuable upon exercise of Series O Warrants 618,000 Common stock issuable upon exercise of Series P Warrants 309,000 Stock price $ 3.13 - $4.19 Volatility (Annual) 80% - 83% Strike price $ 3.10, Series O Warrants; $3.70, Series P Warrants Risk-free rate 0.71% - 0.80% Series O Warrants; 0.71% - 0.79%, Series P Warrants Term 1.4 1.7 years Series O Warrants; 2.1 - 2.2 years, Series P Warrants Probability of Reset Adjustment 0% - 100 % |
Fair value of derivative liabilities | 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 Balance at August 31, 2016 Warrant liability $ - $ 1,714,395 $ (1,714,395 ) $ - |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Common Stock And Warrants Tables | |
Warrants outstanding and exercisable | Shares of Common Stock Issuable from Warrants Outstanding as of August 31, Weighted Average Description 2016 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 - $ 2.34 December 31, 2020 Series N 767,000 - $ 3.38 December 31, 2020 Series O 618,000 - $ 3.10 October 31, 2017 Series P 309,000 - $ 3.70 April 30, 2018 Series Q 937,500 - $ 3.20 June 20, 2019 Series R 937,500 - $ 4.00 June 20, 2021 Total 11,586,631 7,646,537 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Stock Options Tables | |
Fair value of each option award | Year Ended Year Ended August 31, 2016 August 31, 2015 Expected dividend yield Expected stock price volatility 82 % 137.5 % Risk-free interest rate 2.06 % 1.90 % Expected term (in years) 7.67 7.67 Exercise price $ 3.46 $ 1.40 Weighted-average grant date fair-value $ 2.64 $ 1.33 |
Stock option activity | 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 August 31, 2016 720,001 3.06 7.26 years 70,100 Exercisable at August 31, 2016 225,001 3.30 6.55 years 61,100 Available for grant at August 31, 2016 3,216,665 |
Share-based compensation cost | Years Ended August 31, 2016 2015 Stock Compensation Expense: SG&A $ 211,406 $ 420,488 R&D 97,357 16,286 Total $ 308,763 $ 436,774 |
Stock options outstanding and exercisable | 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 6.31 $ 0.80 15,000 6.31 $ 0.80 1.40 15,000 8.30 1.40 15,000 8.30 1.40 2.50 10,000 4.60 2.50 10,000 4.60 2.50 2.90 565,000 7.41 2.90 115,000 7.405 2.90 3.46 65,000 9.35 3.46 20,000 9.35 3.46 4.98 16,667 1.52 4.98 16,667 1.52 4.98 5.94 33,334 4.32 5.94 33,334 4.32 5.94 Total 720,001 7.26 $ 3.06 225,001 6.55 $ 3.30 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Net Loss Per Share Tables | |
Computation of basic and diluted net loss per share | Years Ended August 31, 2016 2015 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (4,637,313 ) $ (8,092,744 ) Denominator: Weighted average number of common shares outstanding 27,295,540 25,131,836 Basic and diluted EPS $ (0.17 ) $ (0.32 ) 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 Warrants 11,586,631 7,646,537 Convertible debt 2,685,524 2,498,254 Warrants issuable upon conversion of debt (See "NOTE 3 - Debt" above) 2,678,280 2,498,254 Total shares not included in the computation of diluted losses per share 17,670,436 13,910,547 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Income Taxes Tables | |
Deferred income taxes | 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 5,995,528 $ 4,817,277 Capitalized research and development 1,285,254 1,157,431 Depreciation (82 ) (5,615 ) Stock based compensation 1,207,988 1,425,291 Foreign affiliate interest expense 190,173 - Research and development credit carry forward 369,117 310,797 Total deferred tax assets 9,047,979 7,705,181 Less: valuation allowance (9,047,979 ) (7,705,181 ) Net deferred tax asset $ - $ - |
Reconciliation income tax benefit | 2016 2015 Income tax benefit at statutory rate $ 1,576,686 $ 2,751,533 Permanent differences (297,211 ) (2,046,348 ) Research and development credit 63,323 54,380 Change in valuation allowance (1,342,798 ) (759,565 ) $ - $ - |
Organization and Going Concern
Organization and Going Concern (Details Narrative) - USD ($) | Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 |
Organization And Going Concern Details Narrative | |||
Accumulated deficit | $ (33,676,327) | $ (29,039,014) | |
Cash and cash equivalents | $ 2,509,215 | $ 228,465 | $ 785,237 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Aug. 31, 2016 | |
Office Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 5 years |
Furniture & Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 5 years |
Maximum [Member] | Furniture & Equipment [Member] | |
Estimated useful lives | 7 years |
Debt (Details)
Debt (Details) | Aug. 31, 2016USD ($) |
Notes to Financial Statements | |
2,017 | $ 618,146 |
2,018 | 3,000,000 |
Total | $ 3,618,146 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Interest expense | $ 308,983 | $ 250,348 |
Accretion of debt discount | (2,335,954) | (4,727,106) |
Bridge Loan [Member] | ||
Interest expense | 18,076 | |
Accretion of debt discount | 458,777 | |
Bridge Loan One [Member] | ||
Interest expense | 44,742 | 20,891 |
Accretion of debt discount | 170,614 | 293,234 |
Convertible Promissory Note [Member] | ||
Interest expense | 246,637 | 229,457 |
Accretion of debt discount | $ 1,706,563 | $ 4,433,872 |
Derivative Liability related 30
Derivative Liability related to the Offering Units (Details) | 12 Months Ended |
Aug. 31, 2016$ / sharesshares | |
Common stock issuable upon exercise of Series O Warrants | shares | 618,000 |
Common stock issuable upon exercise of Series P Warrants | shares | 309,000 |
Minimum [Member] | |
Stock price | $ 3.13 |
Volatility (Annual) | 80.00% |
Probability of Reset Adjustment | 0.00% |
Maximum [Member] | |
Stock price | $ 4.19 |
Volatility (Annual) | 83.00% |
Probability of Reset Adjustment | 100.00% |
Series O Warrants [Member] | |
Strike price | $ 3.10 |
Series O Warrants [Member] | Minimum [Member] | |
Risk-free rate | 0.71% |
Term | 1 year 4 months 24 days |
Series O Warrants [Member] | Maximum [Member] | |
Risk-free rate | 0.80% |
Term | 1 year 8 months 12 days |
Series P Warrants [Member] | |
Strike price | $ 3.70 |
Series P Warrants [Member] | Minimum [Member] | |
Risk-free rate | 0.71% |
Term | 2 years 1 month 6 days |
Series P Warrants [Member] | Maximum [Member] | |
Risk-free rate | 0.79% |
Term | 2 years 2 months 12 days |
Derivative Liability related 31
Derivative Liability related to the Offering Units (Details 1) | 12 Months Ended |
Aug. 31, 2016USD ($) | |
Derivative Liability Related To Offering Units Details 1 | |
Beginning balance, warrant liability | |
Initial valuation of derivative liabilities upon issuance of new securities during the period | 1,714,395 |
Increase (decrease) in fair value of derivative liabilities | (1,714,395) |
Ending balance, warrant liability |
Common Stock and Warrants (Deta
Common Stock and Warrants (Details) - $ / shares | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Shares of Common Stock Issuable from Warrants | 11,586,631 | 7,646,537 |
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 | 3,110,378 |
Exercise Price | $ 1.12 | |
Expiration | Dec. 31, 2020 | |
Series K [Member] | ||
Shares of Common Stock Issuable from Warrants | 3,110,378 | 3,110,378 |
Exercise Price | $ 1.20 | |
Expiration | Dec. 31, 2020 | |
Series L [Member] | ||
Shares of Common Stock Issuable from Warrants | 500,000 | 500,000 |
Exercise Price | $ 1.20 | |
Expiration | Dec. 7, 2020 | |
Series M [Member] | ||
Shares of Common Stock Issuable from Warrants | 375,000 | |
Exercise Price | $ 2.34 | |
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 | 618,000 | |
Exercise Price | $ 3.10 | |
Expiration | Oct. 31, 2017 | |
Series P [Member] | ||
Shares of Common Stock Issuable from Warrants | 309,000 | |
Exercise Price | $ 3.70 | |
Expiration | Apr. 30, 2018 | |
Series Q [Member] | ||
Shares of Common Stock Issuable from Warrants | 937,500 | |
Exercise Price | $ 3.20 | |
Expiration | Jun. 20, 2019 | |
Series R [Member] | ||
Shares of Common Stock Issuable from Warrants | 937,500 | |
Exercise Price | $ 4 | |
Expiration | Jun. 20, 2021 |
Common Stock and Warrants (De33
Common Stock and Warrants (Details Narrative) - $ / shares | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Common Stock And Warrants Details Narrative | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 28,500,221 | 26,572,615 |
Common stock, shares outstanding | 28,500,221 | 26,572,615 |
Cashless exercise options | 556,667 | |
Common stock, shares issued during period | 282,106 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Stock Options Details | ||
Expected dividend yield | ||
Expected stock price volatility | 82.00% | 137.50% |
Risk-free interest rate | 2.06% | 1.90% |
Expected term (in years) | 7 years 8 months 1 day | 7 years 8 months 1 day |
Exercise price | $ 3.46 | $ 1.40 |
Weighted-average grant date fair-value | $ 2.64 | $ 1.33 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Number of Options | ||
Outstanding Beginning | 1,267,502 | 1,325,837 |
Grants | 65,000 | 15,000 |
Forfeitures | (55,834) | (73,335) |
Exercises | (556,667) | |
Outstanding Ending | 720,001 | 1,267,502 |
Exercisable Ending | 225,001 | |
Available for grant Ending | 3,216,665 | |
Weighted Average Exercise Price ($) | ||
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 | $ 3.30 | |
Weighted Average Remaining Contractual Term | ||
Outstanding Ending | 7 years 3 months 4 days | |
Exercisable Ending | 6 years 6 months 18 days | |
Aggregate Intrinsic Value ($) | ||
Outstanding Ending | $ 70,100 | |
Exercisable Ending | $ 61,100 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Stock Compensation Expense: | ||
SG&A | $ 211,406 | $ 420,488 |
R&D | 97,357 | 16,286 |
Total | $ 308,763 | $ 436,774 |
Stock Options (Details 3)
Stock Options (Details 3) - $ / shares | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Number of Shares Subject to Outstanding Options | 720,001 | 1,267,502 | 1,325,837 |
Weighted average contractural life (years) | 7 years 3 months 4 days | ||
Weighted-average exercise price | $ 3.06 | $ 2.68 | $ 2.68 |
Number of Shares Subject to options exercisable | 225,001 | ||
Weighted average contractural life (years) of options exercisable | 6 years 6 months 18 days | ||
Weighted-average exercise price of options exercisable | $ 3.30 | ||
$0.80 Per Share [Member] | |||
Number of Shares Subject to Outstanding Options | 15,000 | ||
Weighted average contractural life (years) | 6 years 3 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 3 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 3 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 3 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) | 4 years 7 months 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 | 4 years 7 months 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 4 months 28 days | ||
Weighted-average exercise price | $ 2.90 | ||
Number of Shares Subject to options exercisable | 115,000 | ||
Weighted average contractural life (years) of options exercisable | 7 years 4 months 26 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 4 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 4 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) | 1 year 6 months 7 days | ||
Weighted-average exercise price | $ 4.98 | ||
Number of Shares Subject to options exercisable | 16,667 | ||
Weighted average contractural life (years) of options exercisable | 1 year 6 months 7 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 3 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 3 months 26 days | ||
Weighted-average exercise price of options exercisable | $ 5.94 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) | 12 Months Ended |
Aug. 31, 2016USD ($)$ / sharesshares | |
Stock option available for grant shares | 3,216,665 |
Stock option exercise | 556,667 |
Closing stock option exercise price | $ / shares | $ 2.92 |
Stock option outstanding | 605,000 |
Stock based compensation unrecognized | $ | $ 145,716 |
Expected period for recognition | 2 years 3 months |
Common stock, shares issued during period | 282,106 |
Aggregate intrinsic value of options | $ | $ 1,237,333 |
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 ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Numerator: | ||
Loss available to common stockholders' | $ (4,637,313) | $ (8,092,744) |
Denominator: | ||
Weighted average number of common shares outstanding | 27,295,540 | 25,131,836 |
Basic and diluted EPS | $ (0.17) | $ (0.32) |
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 |
Warrants | 11,586,631 | 7,646,537 |
Convertible debt | 2,678,280 | 2,498,254 |
Warrants issuable upon conversion of debt (See "NOTE 3 - Debt" above) | 2,678,280 | 2,498,254 |
Total shares not included in the computation of diluted losses per share | 17,663,192 | 13,910,547 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended | |
Aug. 31, 2016USD ($)shares | Aug. 31, 2015USD ($) | |
Proceed from private placement | $ 775,000 | |
No. of units purchased | 250 | |
Increase (decrease) in related party payable | $ 25,720 | |
Issuance of common stock | shares | 468,750 | |
Issuance of Series Q Warrants | shares | 468,750 | |
Issuance of Series R Warrants | shares | 468,750 | |
Sierchio & Partners [Member] | ||
Legal services | $ 291,951 | $ 235,459 |
Owed amount included in accounts payable | 53,467 | |
June 2016 Private Placement [Member] | ||
Proceed from private placement | $ 1,500,000 | |
No. of units purchased | 468,750 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Aug. 31, 2016 | Aug. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 5,995,528 | $ 4,817,277 |
Capitalized research and development | 1,285,254 | 1,157,431 |
Depreciation | (82) | (5,615) |
Stock based compensation | 1,207,988 | 1,425,291 |
Foreign affiliate interest expense | 190,173 | |
Research and development credit carry forward | 369,117 | 310,797 |
Total deferred tax assets | 9,047,979 | 7,705,181 |
Less: valuation allowance | (9,047,979) | (7,705,181) |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Income Taxes Details 1 | ||
Income tax benefit at statutory rate | $ 1,576,686 | $ 2,751,533 |
Permanent differences | (297,211) | (2,046,348) |
Research and development credit | 63,323 | 54,380 |
Change in valuation allowance | (1,342,798) | (759,565) |
Total |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Income Taxes Details Narrative | ||
Change in valuation allowance | $ 1,342,798 | $ 759,565 |
Research and development credit carry forward | $ 369,117 | $ 310,797 |