Document and Entity Information
Document and Entity Information | 6 Months Ended |
Feb. 28, 2018 | |
Document And Entity Information | |
Entity Registrant Name | SolarWindow Technologies, Inc. |
Entity Central Index Key | 1,071,840 |
Document Type | S-1/A |
Document Period End Date | Feb. 28, 2018 |
Amendment Flag | true |
AmendmentDescription | Amendment description |
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 Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Current assets | |||
Cash and cash equivalents | $ 1,841,672 | $ 670,853 | $ 2,509,215 |
Deferred research and development costs | 101,829 | 91,204 | 349,302 |
Prepaid expenses and other current assets | 69,194 | 16,698 | 15,752 |
Total current assets | 2,012,695 | 778,755 | 2,874,269 |
Equipment, net of accumulated depreciation of $53,181 and $39,255, respectively | 47,717 | 52,953 | 21,331 |
Total assets | 2,060,412 | 831,708 | 2,895,600 |
Current liabilities | |||
Accounts payable | 148,296 | 230,184 | 184,743 |
Interest payable to related party | 66,401 | ||
Bridge note payable to related party, net of discount of $74,702 | 525,298 | ||
Convertible promissory note payable to related party | 18,146 | ||
Total current liabilities | 148,296 | 230,184 | 794,588 |
Bridge note payable to related party | 600,000 | 600,000 | |
Convertible promissory note payable to related party, net of discount of $413,377 and $1,650,120, respectively | 2,085,238 | 2,586,623 | 1,349,880 |
Interest payable to related party | 1,263,124 | 1,046,377 | 669,244 |
Total long term liabilities | 3,948,362 | 4,233,000 | 2,019,124 |
Total liabilities | 4,096,658 | 4,463,184 | 2,813,712 |
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, 34,329,691 and 28,500,221 shares issued and outstanding at August 31, 2017 and 2016, respectively | 36,251 | 34,330 | 28,500 |
Additional paid-in capital | 41,145,870 | 35,363,946 | 33,729,715 |
Retained deficit | (43,218,367) | (39,029,752) | (33,676,327) |
Total stockholders' equity (deficit) | (2,036,246) | (3,631,476) | 81,888 |
Total liabilities and stockholders' equity (deficit) | $ 2,060,412 | $ 831,708 | $ 2,895,600 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Current assets | |||
Equipment, net of accumulated depreciation | $ 60,997 | $ 53,181 | $ 39,255 |
Current liabilities | |||
Bridge note payable, Discount | 74,702 | ||
Convertible notes payable, Discount | $ 914,762 | $ 413,377 | $ 1,650,120 |
Stockholders' equity | |||
Preferred stock, par value | $ 0.10 | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, shares issued | 36,250,544 | 34,329,691 | 28,500,221 |
Common stock, shares outstanding | 36,250,544 | 34,329,691 | 28,500,221 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Consolidated Statements Of Operations | ||||||
Revenue | ||||||
Operating expense | ||||||
Selling, general and administrative | 615,467 | 606,719 | 2,456,693 | 1,651,065 | 2,779,325 | 2,318,443 |
Research and product development | 523,532 | 279,493 | 942,295 | 517,280 | 950,470 | 822,922 |
Total operating expense | 1,138,999 | 886,212 | 3,398,988 | 2,168,345 | 3,729,795 | 3,141,365 |
Loss from operations | (1,138,999) | (886,212) | (3,398,988) | (2,168,345) | (3,729,795) | (3,141,365) |
Other income (expense) | ||||||
Interest expense | (122,731) | (76,127) | (216,747) | (152,465) | (312,185) | (308,983) |
Accretion of debt discount | (227,733) | (323,932) | (572,880) | (687,991) | (1,311,445) | (2,335,954) |
Change in fair value of derivative liability | 1,714,395 | |||||
Loan conversion inducement expense | (565,406) | |||||
Total other income (expense) | (350,464) | (400,059) | (789,627) | (840,456) | (1,623,630) | (1,495,948) |
Net loss | $ (1,489,463) | $ (1,286,271) | $ (4,188,615) | $ (3,008,801) | $ (5,353,425) | $ (4,637,313) |
Basic and Diluted Loss per Common Share | $ (0.04) | $ (0.04) | $ (0.12) | $ (0.11) | $ (0.17) | $ (0.17) |
Weighted average number of common shares outstanding - basic and diluted | 36,135,080 | 28,666,741 | 35,743,320 | 28,615,533 | 31,299,979 | 27,295,540 |
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, 2015 | 26,572,615 | |||
Beginning 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 | |
Exercise of stock options, Shares | 282,106 | |||
Exercise of stock options, Amount | $ 282 | (282) | ||
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 | (1,714,395) | (1,714,395) | ||
June 2016 Private Placement units issued, Shares | 937,500 | |||
June 2016 Private Placement units issued, Amount | $ 937 | 2,999,063 | 3,000,000 | |
Stock based compensation due to common stock purchase options | 308,763 | 308,763 | ||
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 | ||
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 |
Stock based compensation due to common stock purchase options | 199,599 | 199,599 | ||
July 2017 Private Placement units issued, Shares | 300,000 | |||
July 2017 Private Placement units issued, Amount | $ 300 | 689,700 | 690,000 | |
Stock based compensation related to stock issuances, Shares | 138,904 | |||
Stock based compensation related to stock issuances, Amount | $ 139 | 448,463 | 448,602 | |
Exercise of warrants for cash, Shares | 129,000 | |||
Exercise of warrants for cash, Amount | $ 129 | 301,731 | 301,860 | |
Exercise of warrants on a cashless basis, Shares | 5,215,046 | |||
Exercise of warrants on a cashless basis, Amount | $ 5,215 | (5,215) | ||
Exercise of stock options on a cashless basis, Shares | 46,520 | |||
Exercise of stock options on a cashless basis, Amount | $ 47 | (47) | ||
Net loss | (5,353,425) | (5,353,425) | ||
Ending Balance, Shares at Aug. 31, 2017 | 34,329,691 | |||
Ending Balance, Amount at Aug. 31, 2017 | $ 34,330 | 35,363,946 | (39,029,752) | (3,631,476) |
Stock based compensation due to common stock purchase options | 874,454 | 874,454 | ||
Stock based compensation related to stock issuances, Shares | 210,000 | |||
Stock based compensation related to stock issuances, Amount | $ 210 | 1,022,490 | 1,022,700 | |
Exercise of warrants for cash, Shares | 82,500 | |||
Exercise of warrants for cash, Amount | $ 83 | 257,167 | 257,250 | |
Exercise of warrants on a cashless basis, Shares | 665,703 | |||
Exercise of warrants on a cashless basis, Amount | $ 665 | (665) | ||
Exercise of stock options on a cashless basis, Shares | 141,050 | |||
Exercise of stock options on a cashless basis, Amount | $ 141 | (141) | ||
September 2017 Private Placement units issued, Shares | 821,600 | |||
September 2017 Private Placement units issued, Amount | $ 822 | 2,554,354 | 2,555,176 | |
Discount on convertible promissory note due to warrant modifications | 1,074,265 | 1,074,265 | ||
Net loss | (4,188,615) | (4,188,615) | ||
Ending Balance, Shares at Feb. 28, 2018 | 36,250,544 | |||
Ending Balance, Amount at Feb. 28, 2018 | $ 36,251 | $ 41,145,870 | $ (43,218,367) | $ (2,036,246) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Cash flows from operating activities | ||||
Net loss | $ (4,188,615) | $ (3,008,801) | $ (5,353,425) | $ (4,637,313) |
Adjustments to reconcile net loss to net cash flows from operating activities | ||||
Depreciation | 7,817 | 5,773 | 13,925 | 11,504 |
Stock based compensation expense | 1,897,154 | 530,562 | 648,201 | 646,263 |
Change in fair value of derivative liability | (1,714,395) | |||
Loan conversion inducement expense | 565,406 | |||
Accretion of debt discount | 572,880 | 687,991 | 1,311,445 | 2,335,954 |
Changes in operating assets and liabilities: | ||||
Decrease (increase) in deferred research and development costs | (10,625) | 155,286 | 258,098 | (243,167) |
Decrease (increase) in prepaid expenses and other current assets | (52,496) | (9,075) | (946) | 5,400 |
Increase (decrease) in accounts payable | (81,888) | (82,261) | 45,441 | 87,305 |
Increase (decrease) in interest payable | 216,747 | 151,012 | 310,732 | 308,983 |
Net cash flows from operating activities | (1,639,026) | (1,569,513) | (2,766,529) | (2,634,060) |
Cash flows from investing activity | ||||
Purchase of equipment | (2,581) | (45,547) | (45,547) | (2,300) |
Net cash flows from investing activity | (2,581) | (45,547) | (45,547) | (2,300) |
Cash flows from financing activities | ||||
Proceeds from the issuance of equity securities | 2,812,426 | 991,860 | 4,367,100 | |
Repayment of promissory note | (18,146) | (18,146) | ||
Proceeds from promissory notes | 550,010 | |||
Net cash flows from financing activities | 2,812,426 | (18,146) | 973,714 | 4,917,110 |
Change in cash and cash equivalents | 1,170,819 | (1,633,206) | (1,838,362) | 2,280,750 |
Cash and cash equivalents at beginning of period | 670,853 | 2,509,215 | 2,509,215 | 228,465 |
Cash and cash equivalents at end of period | 1,841,672 | 876,009 | 670,853 | 2,509,215 |
Supplemental disclosure of cash flow information: | ||||
Interest paid in cash | 1,453 | 1,453 | ||
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 | |||
Debt discount recorded for beneficial conversion feature | 165,640 | |||
Common stock issued for conversion of note payable | 548,700 | |||
Derivative liability from the sale of equity securities | $ 1,714,395 | |||
Discount on convertible promissory note due to to warrant modifications | $ 1,074,265 |
Organization and Going Concern
Organization and Going Concern | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 1 - Organization and Going Concern | Basis of Presentation The unaudited financial statements of SolarWindow Technologies, Inc. (the “ Company GAAP KEC New Energy Solar 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. to align the company name with its 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 harvests light energy from the sun and artificial sources to generate electricity from a transparent coating of organic photovoltaic solar cells applied to glass or plastics, creating a “photovoltaic” effect. Photovoltaics are best known as “solar panels” providing a method to generate electricity using solar cells to convert energy from the sun into a flow of electrons. Conventional PV power is generated by solar modules composed of interconnected mono- or poly-crystalline cells containing PV and electricity-conducting materials. These materials are usually opaque (i.e., not see-through) and only effectively generate electricity with sun light. The Company’s researchers have replaced these materials with a very thin layer of specially developed compounds that allow our SolarWindow™ technology to remain see-through or “transparent,” while generating electricity when exposed to either sun or artificial light. The Company’s SolarWindow™ research and product development programs involve ongoing 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. The Company’s activities are subject to significant risks and uncertainties, including, but not limited to, the Company’s failure to secure, on a timely basis, adequate additional funding to commercialize its SolarWindow™ technology or the development of a similar technology and products, by existing or potential future competitors, who may gain earlier market entry or greater market acceptance than the Company’s technology and products. Recent Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. Management is currently assessing the impact the adoption of ASU 2017-09 will have on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting (Topic 718)”, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for our current fiscal year. The adoption of ASU 2016-09 did not have a material impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for our current fiscal year. The adoption of ASU 2015-17 did not have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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, has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. Due to the “start-up” nature of our business, we expect to incur losses as we continue development of our products and technologies. As of February 28, 2018, the Company has incurred recurring operating losses since inception of $43,218,367. As of February 28, 2018, the Company had approximately $1,841,672 of cash on hand and current liabilities of $148,296. 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. As of the date of filing of the Company’s most recent Form 10-K on November 22, 2017, based on management’s assessment, the Company had sufficient cash to meet its funding requirements for the next twelve months. However, currently, based upon the Company’s near term anticipated level of operations and expenditures, management believes that cash on hand should be sufficient to enable the Company to continue operations through November 2018 or approximately seven months from the date of this quarterly report. 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. The Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. The Company expects to seek additional funding through private equity or convertible debt. 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 and development programs; sell rights to its SolarWindow™ technology and/or MotionPower™ technology, or other technologies or products based upon these technologies; or license the rights to these technologies or products on terms that are less favorable to the Company than might otherwise be available. | 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. to align the company name with its 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, applied to glass and plastics, thereby creating a “photovoltaic” effect. Photovoltaics are best known as a method for generating electric power by using solar cells to convert energy from the sun into a flow of electrons. Typically, conventional PV power is generated by making use of solar modules composed of a number of cells containing PV and electricity-conducting materials. These materials are usually opaque (i.e., not see-through) and only effectively generate electricity with sun light. The Company’s researchers have replaced these materials with compounds that allow our SolarWindow™ technology to remain see-through or “transparent,” while generating electricity when exposed to either sun or artificial light. The Company’s SolarWindow™ product development programs involve ongoing product 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. The Company’s activities are subject to significant risks and uncertainties, including, but not limited to, the Company’s failure to secure, on a timely basis, adequate additional funding to commercialize the Company’s SolarWindow™ technology or the development of a similar technology and products, by existing or potential future competitors, that may gain earlier market entry or greater market acceptance than the Company’s technology and products. Going Concern The Company does not have any commercialized products, has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. Due to the “start-up” nature of our business, we expect to incur losses as we continue development of our products and technologies. These are conditions that initially indicated substantial doubt about the Company’s ability to continue as a going concern. Over the past year, the Company has been funded through the sale of equity securities. As of August 31, 2017, the Company had approximately $670,853 of cash. On September 29, 2017, the Company completed a private placement with a group of private investors, whereby the Company received proceeds of $2,555,176 from the sale of common stock and warrants. From September 9, 2017 through October 31, 2017, the Company received $248,000 upon the exercise of 80,000 Series O Warrants. On November 3, 2017, the Company entered into the Third Amendment to the 2013 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the 2013 Note (with a principal balance of $3,000,000) to extend the maturity date to December 31, 2019. On November 3, 2017, the Company entered into the Third Amendment to the 2015 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the March 2015 loan (with a principal balance of $600,000) to extend the maturity date to December 31, 2019. The Company believes that, as a result of the recent financings and note maturity date extensions, it currently has sufficient cash to meet its funding requirements over the next year and these events alleviate the conditions which initially indicated substantial doubt about the Company's ability to continue as a going concern. However, the Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. The Company expects to seek to obtain additional funding through private equity or convertible debt. There can be no assurance as to the availability or terms upon which such financing and capital might be available. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 2 - Summary of Significant Accounting Policies | Principles of Consolidation Kinetic Energy 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. 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 Company’s 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 management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions. Cash and Cash Equivalents Cash and cash equivalents 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 measured and recorded on a recurring or nonrecurring basis with Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 3 inputs. Fair Value of Financial Instruments The carrying value of cash and 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 Company’s notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. Research and Development Research and development costs represent costs incurred to develop the Company’s technology, including salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, supplies, equipment purchase and repair and other costs. Research and 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 has granted stock options with performance conditions to certain nonemployee consultants. At each reporting date, the Company evaluates whether the achievement of the performance conditions is probable. Compensation expense is recorded over the appropriate service period based upon the assessment of achievement of each performance condition or the occurrence of the event which will trigger the options to vest. 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 Company’s stock-based compensation plans. Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. Segment Reporting The Company’s business is considered to be operating in one segment based upon the Company’s organizational structure, the way in which the operations are managed and evaluated, the availability of separate financial results and materiality considerations. Net Income (Loss) Per Share The computation of basic earnings per share (“EPS”) 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 March 2016, the Financial Accounting Standards Board (“ FASB ASU In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company has determined that the adoption of ASU 2015-17 will currently have no impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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. |
Debt
Debt | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 3 - Debt | As of February 28, 2018 and August 31, 2017, the Company had the following outstanding debt balances: Issue Maturity Debt Interest Date Date Principal Discount Balance Payable As of February 28, 2018: March 2015 Loan as amended 3/4/2015 12/31/2019 $ 600,000 $ - $ 600,000 $ 146,747 2013 Note as amended 10/7/2013 12/31/2019 3,000,000 (914,762 ) 2,085,238 1,116,377 $ 3,600,000 $ (914,762 ) $ 2,685,238 $ 1,263,124 As of August 31, 2017: March 2015 Loan as amended 3/4/2015 12/31/2017 $ 600,000 $ - $ 600,000 $ 113,465 2013 Note as amended 10/7/2013 12/31/2017 3,000,000 (413,377 ) 2,586,623 932,912 $ 3,600,000 $ (413,377 ) $ 3,186,623 $ 1,046,377 March 2015 Loan as Amended On March 4, 2015, the Company entered into a Bridge Loan Agreement with 1420468 Alberta Ltd. (which has since been merged with and into Kalen Capital Corporation (the “Investor”)). Pursuant the Bridge Loan Agreement, the Company borrowed $600,000 at an annual interest rate of 7% (the “ March 2015 Loan On November 3, 2017, the Company entered into the Third Amendment related to the March 2015 Loan pursuant to which the Company and the Investor amended the March 2015 loan to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5%. During the three months ended February 28, 2018 and 2017, the Company recognized $18,846 and $11,690, respectively, of interest expense. During the six months ended February 28, 2018 and 2017, the Company recognized $33,282 and $23,306, respectively, of interest expense. During the three and six months ended February 28, 2018, the Company recognized no debt discount accretion. During the three and six months ended February 28, 2017, the Company recognized debt discount accretion of $18,982 and $74,702, respectively. 2013 Note as Amended On October 7, 2013, the Company sold to the Investor an unsecured Convertible Promissory Note (the “ 2013 Note On November 3, 2017, the Company entered into the Third Amendment related to the 2013 Note pursuant to which the Company and the Investor amended the 2013 Note to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5% and all outstanding warrants held by the Investor had their maturity date extended to December 31, 2022, as described below, resulting in an additional debt discount of $1,074,265 as of November 3, 2017. The modification did not result in a gain or loss due to the related party nature of the transaction. The maturity date of the remaining Series M Warrant to purchase 246,000 shares of common stock was extended from December 31, 2020 to December 31, 2022. The Company recorded $82,656 as a debt discount to recognize the increase in value for the extension of the expiration date. The maturity date of the Series N Warrant to purchase 767,000 shares of common stock was extended from December 31, 2020 to December 31, 2022. The Company recorded $327,509 as a debt discount to recognize the increase in value for the extension of the expiration date. The maturity date of the Series P Warrant to purchase 213,500 shares of common stock was extended from April 30, 2018 to December 31, 2022. The Company recorded $348,219 as a debt discount to recognize the increase in value for the extension of the expiration date. The maturity date of the Series R Warrant to purchase 468,750 shares of common stock was extended from June 20, 2021 to December 31, 2022. The Company recorded $295,781 as a debt discount to recognize the increase in value for the extension of the expiration date. The maturity date of the Series S-A Warrant to purchase 300,000 shares of common stock was extended from July 24, 2022 to December 31, 2022. The Company recorded $20,100 as a debt discount to recognize the increase in value for the extension of the expiration date. Interest expense related to the 2013 Note, as amended, amounted to $103,885 and $64,437 during the three months ended February 28, 2018 and 2017, respectively. Interest expense amounted to $183,465 and $128,473 during the six months ended February 28, 2018 and 2017, respectively. Accretion of the debt discount related to the 2013 Note as amended amounted to $227,733 and $304,950 during the three months ended February 28, 2018 and 2017, respectively and $572,880 and $613,289 during the six months ended February 28, 2018 and 2017, respectively. The remaining debt discount related to warrant expiration date extensions totals $914,762 and will be amortized through December 31, 2019. | December 7, 2015, $550,000 Bridge Loan On December 7, 2015, the Company entered into a Bridge Loan Agreement (the “ December 2015 Loan Agreement Series M Warrant The debt discount attributable to the warrants and beneficial conversion feature amounted to $458,777 and discount was accreted through March 31, 2016. On March 31, 2016, upon the conversion of $548,700 of the principal owed under the December 2015 Loan Agreement, the Investor received 177 PPM Units pursuant to the March 2016 Private Placement (defined below) resulting in a remaining balance of $18,146. The remaining balance was evidenced by a new promissory note (the “ March 2016 Note The PPM Units issued in exchnge for the conversion of principal owed under the December 2015 Loan Agreement contained terms that were more beneficial to the Investor resulting in the Company recognizing a loan conversion inducement expense of $36,176 related to the common stock issued and $529,230 related to the warrant component of the PPM Units (i.e., the Series O Warrant and Series P Warrant as defined below under Note 4). During the year ended August 31, 2017 and 2016, the Company recognized $695 and $17,604, respectively, of interest expense. Accretion related to the debt discount for the December 2015 Loan Agreement amounted to $0 and $458,777 during the years ended August 31, 2017 and 2016, respectively. March 4, 2015, $600,000 Bridge Loan On March 4, 2015, the Company entered into a Bridge Loan Agreement (the “ Bridge Loan Agreement March 2015 Loan Series L Warrant The debt discount attributable to the relative fair value of the Series L Warrant issued with the March 2015 Loan, amounted to $299,750 and was accreted over the original term of the March 2015 Loan through September 4, 2015. On December 7, 2015, The Investor agreed to extend the maturity date of the March 2015 Loan from September 4, 2015 to December 31, 2016 and extend the expiration date of the Series L Warrant from March 4, 2020 to December 7, 2020. As consideration the Company issued The Investor 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 and extension of the expiration date of the Series L Warrant amounting to $205,800 and $33,000, respectively. On January 5, 2017, the Company and the The Investor entered into the Second Amendment to Bridge Loan Agreement extending the maturity date of the March 2015 Loan from December 31, 2016 to December 31, 2017. No consideration was exchanged for this extension in the maturity date. On November 3, 2017, the Company entered into the Third Amendment to the 2015 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the March 2015 loan to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5% and all outstanding warrants held by the Investor had their maturity date extended to December 31, 2022. During the years ended August 31, 2017 and 2016, the Company recognized $47,832 and $44,742, respectively, of interest expense. Accretion related to the debt discount for the March 2015 Loan, Series L Warrant and Series M Warrant amounted to $74,702 and $170,614 during the years ended August 31, 2017 and 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 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 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 On November 3, 2017, the Company entered into the Third Amendment to the 2013 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the 2013 Note to extend the maturity date to December 31, 2019. As consideration for the note extension, the interest rate was increased to 10.5% and all outstanding warrants held by the Investor had their maturity date extended to December 31, 2022. 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 certain of the 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 the resulting debt discount 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 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 which 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 increase in fair value for the extension of the expiration date which is being accreted through December 31, 2017. Interest expense related to the 2013 Loan Agreement, as amended, amounted to $263,668 and $246,637 during the years ended August 31, 2017 and 2016, respectively. Accretion of the debt discount related to the 2013 Loan Agreement as amended amounted to $1,236,743 and $1,706,563 during the years ended August 31, 2017 and 2016, respectively. The remaining debt discount related to the Series N Warrants and Series I, J and K Warrant expiration date extensions totals $413,377 and will be amortized through December 31, 2017. Principal maturities for notes payable for the years ending August 31 are as follows (See “NOTE 11 – Subsequent Events” below): 2018 - 2019 - 2020 3,600,000 Total $ 3,600,000 |
Private Placements
Private Placements | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 4 - Private Placements | September 2017 Private Placement On September 11, 2017, the Company initiated and on September 29, 2017, completed a self-directed offering of 821,600 units at a price of $3.11 per unit for $2,555,176 in aggregate proceeds (the “ September 2017 Private Placement The relative fair value of the common stock was estimated to be $1,540,000. The relative fair value of the Series S Warrants was estimated to be $1,015,000 as determined based on the relative fair value allocation of the proceeds received. The Series S Warrants were valued using the Black-Scholes option pricing model using the following variables: market price of common stock - $3.95 per share; estimated volatility – 77.96%; 5-year risk free interest rate – 1.71%; expected dividend rate - 0% and expected life - 5 years. | July 2017 Private Placement On July 24, 2017, the Company completed a self-directed offering of 300,000 units at a price of $2.30 per unit for $690,000 in aggregate proceeds (the “ July 2017 Private Placement Series S-A Warrant The relative fair value of the common stock was estimated to be $414,000. The relative fair value of the Series S-A Warrants was estimated to be $276,000 as determined based on the relative fair value allocation of the proceeds received. The Series S-A Warrants were valued using the Black-Scholes option pricing model using the following variables: market price of common stock - $3.20 per share; estimated volatility – 76.13%; 5-year risk free interest rate – 1.83%; expected dividend rate - 0% and expected life - 5 years. 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 Series Q Warrant Series R Warrant 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. 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 “ March 2016 Private Placement PM Units Series O Warrant Series P Warrant The terms of the March 2016 Private Placement provided for a onetime reset adjustment (the “Reset Adjustment”) such that if, within 6 months from the March 2016 Private Placement Termination Date, the Company sold equity securities at a price less than $3.10 per share (“Reset Price”), each of the subscribers having purchased Units in the March 2016 Private Placement would 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 Reset Adjustment expired on September 30, 2016; no Reset Units were issued. The Reset Adjustment was accounted for as a derivative, measured at fair value, during the year ended August 31, 2016. The Company determined the Reset Adjustment had no value as of August 31, 2016. |
Derivative Liability Related to
Derivative Liability Related to the PPM Units | 12 Months Ended |
Aug. 31, 2017 | |
Notes to Financial Statements | |
NOTE 5 - Derivative Liability Related to the PPM Units | The Reset Adjustment contained in the March 2016 Private Placement 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 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 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 Company’s 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 reclassification of the derivative liability balance to additional paid-in capital. 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 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 | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 6 - Common Stock and Warrants | Common Stock At February 28, 2018, the Company had 300,000,000 authorized shares of common stock with a par value of $0.001 per share, 36,250,544 shares of common stock outstanding and 1,035,197 shares reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “ 2006 Plan During the six months ended February 28, 2018, we entered into the following securities related transactions: · On September 29, 2017, the Company completed the September 2017 Private Placement of 821,600 units at a price of $3.11 per unit for $2,555,176 in aggregate proceeds. Each unit consisted of one share of common stock and one Series S Stock Purchase Warrant to purchase one (1) share of common stock at an exercise price of $3.42 per share through September 29, 2022. The warrants may be exercised on a cashless basis (See “NOTE 3 – Private Placements”). · On November 21, 2017 each director was granted 40,000 shares of common stock for a total issuance of 160,000 shares of common stock valued at $4.87 per share, the fair market value of our common stock on the date of issuance. Additionally, on November 21, the Company issued Jatinder Bhogal, Director, an additional 50,000 shares valued at $4.87 per share. 75% of the 210,000 issued shares are subject to a one-year lock-up. · From September 6, 2017 through October 30, 2017, holders of our Series O Warrants exercised 80,000 warrants at an exercise price of $3.10 per share resulting in $248,000 to the Company and the issuance of 80,000 shares of common stock. · John Conklin, the Company’s President & CEO, exercised 150,000 stock purchase options on a cashless basis resulting in the issuance of 80,110 shares of common stock. · Alastair Livesey, a Company Director, exercised 36,667 stock purchase options on a cashless basis resulting in the issuance of 19,067 shares of common stock. · Three other individuals exercised a total of 90,000 stock purchase options on a cashless basis resulting in the issuance of 41,873 shares of common stock. · On September 7, 2017, the Investor exercised their outstanding Series Q Warrant to purchase up to 468,750 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 189,940 shares of common stock. · On September 7, 2017, a third party exercised their outstanding Series Q Warrant to purchase up to 468,750 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 189,940 shares of common stock. · On December 28, 2017, a third party exercised their outstanding Series R Warrant to purchase up to 468,750 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 285,823 shares of common stock. · Three holders of our Series P Warrants exercised 2,500 warrants at an exercise price of $3.70 per share resulting in $9,250 to the Company and the issuance of 2,500 shares of common stock. Warrants Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. Other than the Series O Warrants and Series P Warrants, all of the following warrants may be exercised on a cashless basis. A summary of the Company’s warrants outstanding and exercisable as of February 28, 2018 and August 31, 2017 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average February 28, August 31, Exercise Description 2018 2017 Price Expiration Series M 246,000 246,000 $ 2.34 December 31, 2022 Series N 767,000 767,000 $ 3.38 December 31, 2022 Series O - 618,000 $ 3.10 October 31, 2017 Series P 306,500 309,000 $ 3.70 April 30, 2018 Series Q - 937,500 $ 3.20 December 31, 2022 Series R 468,750 937,500 $ 4.00 December 31, 2022 Series S-A 300,000 300,000 $ 2.53 December 31, 2022 Series S 821,600 - $ 3.42 September 29, 2022 Total 2,909,850 4,115,000 | Common Stock At August 31, 2017, the Company had 300,000,000 authorized shares of common stock with a par value of $0.001 per share, 34,329,691 shares of common stock outstanding and 2,072,580 shares reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “ 2006 Plan During the year ended August 31, 2017, we entered into the following securities related transactions: · On July 24, 2017, the Company completed the July 2017 Private Placement of 300,000 units at a price of $2.30 per unit for $690,000 in aggregate proceeds. Each unit consisted of one share of common stock and one Series S-A Warrant to purchase one (1) share of common stock at an exercise price of $2.53 per share through July 24, 2022. The warrants may be exercised on a cashless basis. All of the units of the July 2017 Private Placement were purchased by the Investor (See “NOTE 4 – Private Placements”). · On July 7, 2017, the Company finalized and executed two consulting agreements with third parties to provide business development services. The terms and conditions of each consulting agreement are similar and provide for combined compensation of $26,000 per month in cash and the grant of 1,500,000 common stock purchase options which vest upon the attainment of certain milestones and upon Board approval. During August 2017, the Company issued 13,622 shares of common stock, valued at $40,000 (based on the closing price of the Company’s stock on the date transferred), to pay consulting fees incurred under the agreements. · On July 7, 2017, the Company issued 5,282 shares of common stock in exchange for services valued at $15,000 (based on the closing price of the Company’s stock on the date transferred). · In June 2017, the Investor exercised 129,000 Series M Warrants at an exercise price of $2.34 per share and paid the Company $301,860 in exchange for 129,000 shares of common stock. · On March 2, 2017, the Investor exercised all Series I, J, K and L Warrants (7,642,631 shares in total) on a cashless basis and received 5,215,046 shares of common. · On November 15, 2016 each director was issued 40,000 shares of common stock for a total issuance of 120,000 shares of common stock valued at $3.28 per share, the fair market value of our common stock on the date of issuance. · issued 46,520 shares of common stock upon the cashless exercise of 130,000 options. 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 Company’s three directors pursuant to the 2006 Plan (90,000 shares total) valued at $3.75 per share, the closing price of the Company’s common stock on the day the stock was granted. · received $1,367,100 pursuant to the March 2016 Private Placement 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”). Warrants Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. Other than the Series O Warrants and Series P Warrants, all of the following warrants may be exercised on a cashless basis. A summary of the Company’s warrants outstanding and exercisable as of August 31, 2017 and 2016 is as follows: Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average August 31, August 31, Exercise Description 2017 2016 Price Expiration Series I - 921,875 $ 1.37 December 31, 2020 Series J - 3,110,378 $ 1.12 December 31, 2020 Series K - 3,110,378 $ 1.20 December 31, 2020 Series L - 500,000 $ 1.20 December 7, 2020 Series M 246,000 375,000 $ 2.34 December 31, 2020 Series N 767,000 767,000 $ 3.38 December 31, 2020 Series O 618,000 618,000 $ 3.10 October 31, 2017 Series P 309,000 309,000 $ 3.70 April 30, 2018 Series Q 937,500 937,500 $ 3.20 June 20, 2019 Series R 937,500 937,500 $ 4.00 June 20, 2021 Series S-A 300,000 - $ 2.53 July 24, 2022 Total 4,115,000 11,586,631 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 I Warrant was exercised in full and on a cashless basis on March 2, 2017 resulting in the issuance of 584,634 shares of common stock. 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 J and K Warrant were exercised in full and on a cashless basis on March 2, 2017 resulting in the issuance of 4,293,900 shares of common stock. 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. The Series L Warrant was exercised in full and on a cashless basis on March 2, 2017 resulting in the issuance of 336,512 shares of common stock. 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 the Investor to extend the maturity date of the March 2015 Loan from September 4, 2015 to December 21, 2016. In June 2017, the Investor exercised 129,000 Series M Warrants. 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 Warrants were issued in connection with the March 2016 Private Placement and the Series Q and Series R Warrants were issued in connection with the June 2016 Private Placement; see “NOTE 4 – Private Placements.” The Series S-A Warrant was issued in connection with the July 2017 Private Placement; see “NOTE 4 – Private Placements.” On November 3, 2017, the term of the Series M Warrant, Series N Warrant, Series P Warrant for 213,500 shares, Series R Warrant for 468,750 shares, and Series S-A Warrant were extended to December 31, 2022, as contemplated by the Amendments described in Note 11. There are a total of approximately 2,870,739 warrants issuable pursuant to the 2013 Loan Agreement as described above under “NOTE 3 – Debt: October 7, 2013, $3,000,000 Convertible Promissory Note |
Stock Options
Stock Options | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
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 1,035,197 remain available for grant, 1,290,001 have been exercised in total and 624,565 net shares issued pursuant to the exercise of vested options from inception of the 2006 Plan through February 28, 2018. 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 2006 Plan was approved by stockholders on February 7, 2011 and expires according to its terms on February 7, 2021. The Company employs the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of “plain vanilla” options: Six Months Ended February 28, 2018 2017 Expected dividend yield – – Expected stock price volatility 83.43% – 83.55% 79% - 81% Risk-free interest rate 2.27% - 2.33% 1.95% - 2.03% Expected term (in years) 7.67 5.00 - 7.67 Exercise price $4.87 - $5.35 $ 2.71 Weighted-average grant date fair-value $3.76 - $5.64 $ 1.85 A summary of the Company’s stock option activity for the six months ended February 28, 2018 and year ended August 31, 2017 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, 2016 720,001 3.06 Grants 1,535,000 2.71 Exercises (130,000 ) 2.62 Outstanding at August 31, 2017 2,125,001 2.84 Grants 1,263,000 5.25 Forfeitures (300,000 ) 2.90 Exercises (276,667 ) 3.30 Outstanding at February 28, 2018 2,811,334 3.87 6.79 years 5,154,075 Exercisable at February 28, 2018 215,334 4.84 8.38 years 193,975 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 28, 2018. 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 $5.70 on February 28, 2018 and 2,778,000 outstanding options have an exercise price below $5.70 per share, as of February 28, 2018, there is intrinsic value to the Company’s outstanding, in-the-money stock options, including 182,000 options that are exercisable and in-the-money. On November 21, 2017, the Company granted 255,000 options to directors and employees with an exercise price of $4.87. On December 27, 2017, the Company entered into an employment agreement with John Conklin pursuant to which Mr. Conklin was granted 1,008,000 stock purchase options with an exercise price of $5.35 per share, vesting at the rate of 1/48 th During the six months ended February 28, 2018, there were 276,667 options exercised on a cashless basis resulting in the issuance of 141,050 shares of common stock. The aggregate intrinsic value of the options exercised was $1,015,585. During the year ended August 31, 2017, there were 130,000 options exercised on a cashless basis resulting in the issuance of 46,520 shares of common stock. The aggregate intrinsic value of the options exercised was $186,500. On November 15, 2016, the Company granted 35,000 options to two employees with an exercise price of $3.28. On July 7, 2017, the Company finalized and executed two consulting agreements with third parties to provide business development services. The terms and conditions of each consulting agreement are similar and provide for combined compensation of $26,000 per month in cash and the grant of 1,500,000 common stock purchase options with an exercise price of $2.70 per share, and which vest upon the achievement of performance milestones and upon Board approval. The 1,500,000 stock options granted to consultants had a grant date fair value of $1.84 per option. As of February 28, 2018, the Company continues to address the conditions that would lead to the achievement of the performance milestones identified in the consulting agreements. Compensation expense will be recorded for the options when the performance milestones become probable of being achieved. 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 28, 2018 and 2017: Three Months Ended Six Months Ended February 28, February 28, 2018 2017 2018 2017 Stock Compensation Expense: SG&A $ 181,201 $ 26,667 $ 580,676 $ 79,722 R&PD 178,980 11,695 293,778 57,240 Total $ 360,181 $ 38,362 $ 874,454 $ 136,962 As of February 28, 2018, the Company had $5,801,820 of unrecognized compensation cost related to unvested stock options. Of the unrecognized compensation expense, $3,041,820 is expected to be recognized over a period of 4.0 years and $2,760,000 of compensation expense will be recorded when and if the performance milestones, from the two consulting agreements described above, become probable of being achieved. The following table summarizes information about stock options outstanding and exercisable at February 28, 2018: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Subject to Outstanding Options Weighted Average Contractual Life (years) Weighted Average Exercise Price Number of Shares Subject To Options Exercise Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $ 2.70 1,500,000 4.36 2.70 - 4.36 2.70 3.28 17,500 8.72 3.28 17,500 8.72 3.28 3.46 35,000 7.85 3.46 25,000 7.85 3.46 4.87 217,500 9.73 4.87 97,500 9.73 4.87 5.35 1,008,000 9.85 5.35 42,000 9.85 5.35 5.94 33,334 2.82 5.94 33,334 2.82 5.94 Total 2,811,334 6.79 $ 3.87 215,334 8.38 $ 4.84 | 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 2,072,580 remain available for grant and 1,013,334 were issued pursuant to the exercise of vested options as of August 31, 2017. 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 2006 Plan was approved by stockholders on February 7, 2011 and expires according to its terms on February 7, 2021. The Company employs the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of “plain vanilla” options: Year Ended Year Ended August 31, 2017 August 31, 2016 Expected dividend yield – – Expected stock price volatility 79% - 81 % 82 % Risk-free interest rate 1.95% - 2.03 % 2.06 % Expected term (in years) 5.00 - 7.67 7.67 Exercise price $ 2.71 $ 3.46 Weighted-average grant date fair-value $ 1.85 $ 2.64 A summary of the Company’s stock option activity for the years ended August 31, 2017 and 2016 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, 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 Grants 1,535,000 2.71 Exercises (130,000 ) 2.62 Outstanding at August 31, 2017 2,125,001 2.84 5.31 years 2,969,800 Exercisable at August 31, 2017 237,501 3.51 6.01 years 233,900 Available for grant at August 31, 2017 2,072,580 The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of the period covered by this report and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all in-the-money option holders exercised their vested options on August 31, 2017. 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 $4.20 on August 31, 2017 and 2,075,000 outstanding options have an exercise price below $4.20 per share, as of August 31, 2017, there is intrinsic value to the Company’s outstanding, in-the-money stock options, including 187,500 options that are exercisable and in-the-money. During the year ended August 31, 2017, there were 130,000 options exercised on a cashless basis resulting in the issuance of 46,520 shares of common stock. The aggregate intrinsic value of the options exercised was $186,500. During the year ended August 31, 2016, there were 556,667 options exercised 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 $1,277,834. On November 15, 2016, the Company granted 35,000 options to two employees with an exercise price of $3.28. On July 7, 2017, the Company finalized and executed two consulting agreements with third parties to provide business development services. The terms and conditions of each consulting agreement are similar and provide for combined compensation of $26,000 per month in cash and the grant of 1,500,000 common stock purchase options with an exercise price of $2.70 per share, and which vest upon the achievement of performance conditions and upon Board approval. The 1,500,000 stock options granted to consultants had a grant date fair value of $1.84 per option. As of August 31, 2017, the Company determined the achievement of the performance conditions was not probable. Compensation expense will be recorded for the options with performance conditions when and if the performance conditions become probable of being achieved. 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 years ended August 31, 2017 and 2016: Years Ended August 31, 2017 2016 Stock Compensation Expense: SG&A $ 118,969 $ 211,406 R&D 80,630 97,357 Total $ 199,599 $ 308,763 As of August 31, 2017, the Company had $2,792,847 of unrecognized compensation cost related to unvested stock options. Of the unrecognized compensation expense, $32,847 is expected to be recognized over a period of 1.25 years and $2,760,000 of compensation expense will be recorded when and if the performance conditions become probable of being achieved. The following table summarizes information about stock options outstanding and exercisable at August 31, 2017: 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 5,000 5.31 $ 0.80 5,000 5.31 $ 0.80 1.40 5,000 7.30 1.40 5,000 7.30 1.40 2.50 10,000 3.60 2.50 10,000 3.60 2.50 2.70 1,500,000 5.00 2.70 - 5.00 2.70 2.90 455,000 6.41 2.90 105,000 6.41 2.90 3.28 35,000 9.21 3.28 17,500 9.21 3.28 3.46 65,000 8.35 3.46 45,000 8.35 3.46 4.98 16,667 0.52 4.98 16,667 0.52 4.98 5.94 33,334 3.32 5.94 33,334 3.32 5.94 Total 2,125,001 5.31 $ 2.84 237,501 6.01 $ 3.51 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 8 - Net Loss Per Share | During the three and six months ended February 28, 2018 and 2017, 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 28, 2018 and 2017: Three Months Ended February 28, Six Months Ended February 28, 2018 2017 2018 2017 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (1,489,463 ) $ (1,286,271 ) $ (4,188,615 ) $ (3,008,801 ) Denominator: Weighted average number of common shares outstanding 36,135,080 28,666,741 35,743,320 28,615,533 Basic and diluted EPS $ (0.04 ) $ (0.04 ) $ (0.12 ) $ (0.11 ) The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented: Stock options 2,811,334 625,001 2,811,334 625,001 Warrants 2,909,850 11,586,631 2,909,850 11,586,631 Convertible debt 3,004,655 2,772,057 3,004,655 2,772,057 Warrants issuable upon conversion of debt (See "NOTE 2 - Debt" above) 3,004,655 2,772,057 3,004,655 2,772,057 Total shares not included in the computation of diluted losses per share 11,730,494 17,755,746 11,730,494 17,755,746 | During the years ended August 31, 2017 and 2016, 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, 2017 and 2016: Years Ended August 31, 2017 2016 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (5,353,425 ) $ (4,637,313 ) Denominator: Weighted average number of common shares outstanding 31,299,979 27,295,540 Basic and diluted EPS $ (0.17 ) $ (0.17 ) The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented: Stock options 2,125,001 720,001 Warrants 4,115,000 11,586,631 Convertible debt 2,870,739 2,678,280 Warrants issuable upon conversion of debt (See "NOTE 3 - Debt" above) 2,870,739 2,678,280 Total shares not included in the computation of diluted losses per share 11,981,479 17,663,192 |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
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 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. The law firm of Satterlee Stephens LLP (“Satterlee”), of which Joseph Sierchio, one of the Company’s directors, is a partner, provides counsel to the Company. Mr. Sierchio is the Company’s primary attorney. Fees billed by Satterlee during the three months ended February 28, 2018 and 2017, totaled $71,767 and $45,005, respectively, and $145,834 and $151,555 during the six months ended February 28, 2018 and 2017. At February 28, 2018 and August 31, 2017, the Company owed Satterlee $71,767 and $105,184, respectively, which is included in accounts payable. Mr. Sierchio continues to serve as a director of the Company. On August 7, 2017, the Company appointed Jatinder Bhogal to the Board of Directors. Mr. Bhogal has provided consulting services to the Company through his wholly owned company, Vector Asset Management, Inc., pursuant to a Consulting Agreement dated February 1, 2014 as amended on November 11, 2016. Pursuant to the Consulting Agreement, Mr. Bhogal receives compensation of $5,000 per month. In connection with the Consulting Agreement, during the three months ended February 28, 2018 and 2017, the Company recognized expense $15,000 and $15,000, respectively, and $30,000 and $30,000 of expense during the six months ended February 28, 2018 and 2017, respectively. On November 3, 2017, the Company entered into the Third Amendment to the 2013 Bridge Loan Agreement and the Third Amendment to the 2015 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor agreed to extend the maturity date to December 31, 2019. Pursuant to the Third Amendment to the 2013 Bridge Loan Agreement and the Third Amendment to the 2015 Bridge Loan Agreement, the rate of interest increased to 10.5% and the following warrants, held by the Investor, had their maturity date extended to December 31, 2022: a) Series M Warrant to purchase 246,000 shares; b) Series N Warrant to purchase 767,000 shares; c) Series P Warrant to purchase 213,500 shares; d) Series R Warrant to purchase 468,750; and e) Series S-A Warrant to purchase 300,000 shares. As a result of extending the expiration date of the above warrants to December 31, 2022, the Company recognized an additional debt discount to the 2013 Note of $1,074,265 as of November 3, 2017. For additional information related to our warrants, please see “NOTE 4 – Common Stock and Warrants”. For additional information related to our debt, please see “NOTE 2 – Debt”. 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. | 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. The law firm of Sierchio & Partners, LLP, of which Joseph Sierchio, one of the Company’s directors, was a principal, had provided counsel to the Company since its inception. Beginning in September 2016, Mr. Sierchio became a partner at Satterlee Stephens LLP (“Satterlee”). Concurrently with Mr. Sierchio’s move to Satterlee, the Company engaged with Satterlee to provide legal counsel with Mr. Sierchio maintaining his role as the Company’s primary attorney. During the years ended August 31, 2017 and 2016, the Company recognized $321,739 and $291,951 of fees for legal services billed by firms associated with Mr. Sierchio. At August 31, 2017, the Company owed Satterlee $105,184 which is included in accounts payable. There are no accounts payable to Sierchio & Partners, LLP as of August 31, 2017. Mr. Sierchio continues to serve as a director of the Company. At August 31, 2016, the Company owed Sierchio & Partners, LLP $53,467 which is included in accounts payable. On August 7, 2017, the Company appointed Jatinder Bhogal to the Board of Directors. Mr. Bhogal has provided consulting services to the Company through his wholly owned company, Vector Asset Management, Inc., pursuant to a Consulting Agreement dated February 1, 2014 as amended on November 11, 2016. Pursuant to the Consulting Agreement, Mr. Bhogal received compensation of $5,000 per month. During each of the years ended August 31, 2017 and 2016, the Company recognized $60,000 of expense in connection with the Consulting Agreement. On July 24, 2017, the Company entered into the July 2017 Private Placement with the Investor for the sale of 300,000 units at a price of $2.30 per unit for $690,000 in aggregate proceeds. Each unit consisted of one share of common stock and one Series S-A Warrant to purchase one (1) share of common stock at an exercise price of $2.53 per share through July 24, 2022. The warrants may be exercised on a cashless basis. On March 2, 2017, the Investor exercised outstanding warrants to purchase up to 7,642,631 shares of the Company’s common stock on a cashless basis, consisting of: (i) a Series I Warrant to purchase up to 921,875 shares; (ii) a Series J Warrant to purchase up to 3,110,378 shares; (iii) a Series K Warrant to purchase up to 3,110,378 shares; and (iv) a Series L Warrant to purchase up to 500,000 shares, resulting in the issuance of 5,215,046 shares of common stock. On November 14, 2016, the Company paid the March 2015 Note in full resulting in a payment to the Investor totaling $19,599 representing $18,146 of principal and $1,453 of accrued interest. 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 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 the 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 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 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 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 March 2016 Private Placement 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 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, 2017 | |
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 CompanyÂ’s deferred tax assets at August 31, 2017 and 2016 are as follows: 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 7,120,032 $ 5,995,528 Capitalized research and development 1,431,748 1,285,254 Depreciation (7,137 ) (82 ) Stock based compensation 1,168,629 1,207,988 Foreign affiliate interest expense 296,315 190,173 Research and development credit carry forward 438,298 369,117 Total deferred tax assets 10,447,885 9,047,979 Less: valuation allowance (10,447,885 ) (9,047,979 ) Net deferred tax asset $ - $ - The net increase in the valuation allowance for deferred tax assets was $1,399,906 and $1,342,798 for the years ended August 31, 2017 and 2016, 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 managementÂ’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2017 available to offset future federal taxable income, if any, of $20,941,270, which will fully expire between the period from August 31, 2020 to August 31, 2037. Accordingly, there is no current tax expense for the years ended August 31, 2017 and 2016. In addition, the Company has research and development tax credit carry forwards of $438,298 at August 31, 2017, 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, 2017 and 2016. 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, 2017 and 2016: 2017 2016 Income tax benefit at statutory rate $ 1,820,165 $ 1,576,686 Permanent differences (490,980 ) (297,211 ) Research and development credit 70,721 63,323 Change in valuation allowance (1,399,906 ) (1,342,798 ) $ - $ - The fiscal years 2015 through 2017 remain open to examination by federal authorities and other jurisdictions in which the Company operates. |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 11 - Subsequent Events | Management has reviewed material events subsequent of the period ended February 28, 2018 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”. On March 15, 2018 the Company received notification it has been awarded its first-ever advanced materials manufacturing Cooperative Research and Development Agreement (CRADA) from the U.S. Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy’s (EERE) Advanced Manufacturing Office (AMO). On March 13, 2018 the company Board of Directors appointed Mr. Harmel S. Rayat, company founder and longtime majority stockholder, as Chairman of its Board of Directors. On March 3, 2018, a holder of our Series P Warrants exercised 500 warrants at an exercise price of $3.70 per share resulting in $1,850 to the Company and the issuance of 500 shares of common stock. On April 13, 2018, a holder of our Series P Warrants exercised 1,000 warrants at an exercise price of $3.70 per share resulting in $3,700 to the Company and the issuance of 500 shares of common stock. On April 13, 2018, an employee exercised 15,000 stock purchase options on a cashless basis resulting in the issuance of 5,112 shares of common stock. | Management has reviewed material events subsequent of the period ended August 31, 2016 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”. On September 7, 2017, John Conklin, the Company’s President & CEO, exercised 100,000 stock purchase options on a cashless basis resulting in the issuance of 46,097 shares of common stock. On September 7, 2017, two other employees exercised a total of 72,500 stock purchase options on a cashless basis resulting in the issuance of 33,151 shares of common stock. On September 7, 2017, the Investor exercised their outstanding Series Q Warrant to purchase up to 468,750 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 189,940 shares of common stock. On September 7, 2017, a third party exercised their outstanding Series Q Warrant to purchase up to 468,750 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 189,940 shares of common stock. On September 11, 2017, the Company initiated and on September 29, 2017, completed a self-directed offering of 821,600 units at a price of $3.11 per unit for $2,555,176 in aggregate proceeds (the “ September 2017 Private Placement Subsequent to year end, holders of our Series O Warrants exercised 80,000 warrants at an exercise price of $3.10 per share resulting in $248,000 to the Company and the issuance of 80,000 shares of common stock. On November 3, 2017, the Company entered into the Third Amendment to the 2013 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the 2013 Note to extend the maturity date to December 31, 2019. On November 3, 2017, the Company entered into the Third Amendment to the 2015 Bridge Loan Agreement with the Investor pursuant to which the Company and the Investor amended the March 2015 loan to extend the maturity date to December 31, 2019. Pursuant to the Third Amendment to the 2013 Bridge Loan Agreement and the Third Amendment to the 2015 Bridge Loan Agreement, the rate of interest increased to 10.5% and the following warrants, held by the Investor, had their maturity date extended to December 31, 2022: a) Series M Warrant to purchase 246,000 shares; b) Series N Warrant to purchase 767,000 shares; c) Series P Warrant to purchase 213,500 shares; d) Series R Warrant to purchase 468,750; and e) Series S-A Warrant to purchase 300,000 shares. For additional information related to our warrants, please see “NOTE 6 – Common Stock and Warrants”. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Summary Of Significant Accounting Policies Policies | ||
Principles of Consolidation | Kinetic Energy 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. 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 CompanyÂ’s 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 managementÂ’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions. | |
Cash and Cash Equivalents | Cash and cash equivalents 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 measured and recorded on a recurring or nonrecurring basis with Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 3 inputs. | |
Fair Value of Financial Instruments | The carrying value of cash and 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 CompanyÂ’s notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. | |
Research and Development | Research and development costs represent costs incurred to develop the CompanyÂ’s technology, including salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, supplies, equipment purchase and repair and other costs. Research and 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 has granted stock options with performance conditions to certain nonemployee consultants. At each reporting date, the Company evaluates whether the achievement of the performance conditions is probable. Compensation expense is recorded over the appropriate service period based upon the assessment of achievement of each performance condition or the occurrence of the event which will trigger the options to vest. 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 Company’s stock-based compensation plans. | |
Income Taxes | The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. | |
Segment Reporting | The CompanyÂ’s business is considered to be operating in one segment based upon the CompanyÂ’s organizational structure, the way in which the operations are managed and evaluated, the availability of separate financial results and materiality considerations. | |
Net Income (Loss) Per Share | The computation of basic earnings per share (“EPS”) 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 July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. Management is currently assessing the impact the adoption of ASU 2017-09 will have on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting (Topic 718)”, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for our current fiscal year. The adoption of ASU 2016-09 did not have a material impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for our current fiscal year. The adoption of ASU 2015-17 did not have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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. | In March 2016, the Financial Accounting Standards Board (“ FASB ASU In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company has determined that the adoption of ASU 2015-17 will currently have no impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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. |
Basis of Presentation, Organiza
Basis of Presentation, Organization, Recent Accounting Pronouncements and Going Concern (Policies) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Basis Of Presentation Organization Recent Accounting Pronouncements And Going Concern Policies | ||
Basis of Presentation | The unaudited financial statements of SolarWindow Technologies, Inc. (the “ Company GAAP KEC New Energy Solar | |
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. to align the company name with its 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 harvests light energy from the sun and artificial sources to generate electricity from a transparent coating of organic photovoltaic solar cells applied to glass or plastics, creating a “photovoltaic” effect. Photovoltaics are best known as “solar panels” providing a method to generate electricity using solar cells to convert energy from the sun into a flow of electrons. Conventional PV power is generated by solar modules composed of interconnected mono- or poly-crystalline cells containing PV and electricity-conducting materials. These materials are usually opaque (i.e., not see-through) and only effectively generate electricity with sun light. The Company’s researchers have replaced these materials with a very thin layer of specially developed compounds that allow our SolarWindow™ technology to remain see-through or “transparent,” while generating electricity when exposed to either sun or artificial light. The Company’s SolarWindow™ research and product development programs involve ongoing 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. The Company’s activities are subject to significant risks and uncertainties, including, but not limited to, the Company’s failure to secure, on a timely basis, adequate additional funding to commercialize its SolarWindow™ technology or the development of a similar technology and products, by existing or potential future competitors, who may gain earlier market entry or greater market acceptance than the Company’s technology and products. | |
Recent Accounting Pronouncements | In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. Management is currently assessing the impact the adoption of ASU 2017-09 will have on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting (Topic 718)”, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for our current fiscal year. The adoption of ASU 2016-09 did not have a material impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for our current fiscal year. The adoption of ASU 2015-17 did not have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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. | In March 2016, the Financial Accounting Standards Board (“ FASB ASU In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company has determined that the adoption of ASU 2015-17 will currently have no impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, 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. 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 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, has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. Due to the “start-up” nature of our business, we expect to incur losses as we continue development of our products and technologies. As of February 28, 2018, the Company has incurred recurring operating losses since inception of $43,218,367. As of February 28, 2018, the Company had approximately $1,841,672 of cash on hand and current liabilities of $148,296. 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. As of the date of filing of the Company’s most recent Form 10-K on November 22, 2017, based on management’s assessment, the Company had sufficient cash to meet its funding requirements for the next twelve months. However, currently, based upon the Company’s near term anticipated level of operations and expenditures, management believes that cash on hand should be sufficient to enable the Company to continue operations through November 2018 or approximately seven months from the date of this quarterly report. 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. The Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. The Company expects to seek additional funding through private equity or convertible debt. 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 and development programs; sell rights to its SolarWindow™ technology and/or MotionPower™ technology, or other technologies or products based upon these technologies; or license the rights to these technologies or products on terms that are less favorable to the Company than might otherwise be available. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
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) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Debt Tables | ||
Principal maturities for notes payable | 2018 - 2019 - 2020 3,600,000 Total $ 3,600,000 | |
Outstanding debt | Issue Maturity Debt Interest Date Date Principal Discount Balance Payable As of February 28, 2018: March 2015 Loan as amended 3/4/2015 12/31/2019 $ 600,000 $ - $ 600,000 $ 146,747 2013 Note as amended 10/7/2013 12/31/2019 3,000,000 (914,762 ) 2,085,238 1,116,377 $ 3,600,000 $ (914,762 ) $ 2,685,238 $ 1,263,124 As of August 31, 2017: March 2015 Loan as amended 3/4/2015 12/31/2017 $ 600,000 $ - $ 600,000 $ 113,465 2013 Note as amended 10/7/2013 12/31/2017 3,000,000 (413,377 ) 2,586,623 932,912 $ 3,600,000 $ (413,377 ) $ 3,186,623 $ 1,046,377 |
Derivative Liability Related 22
Derivative Liability Related to the PPM Units (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
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) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Common Stock And Warrants Tables | ||
Warrants outstanding and exercisable | Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average February 28, August 31, Exercise Description 2018 2017 Price Expiration Series M 246,000 246,000 $ 2.34 December 31, 2022 Series N 767,000 767,000 $ 3.38 December 31, 2022 Series O - 618,000 $ 3.10 October 31, 2017 Series P 306,500 309,000 $ 3.70 April 30, 2018 Series Q - 937,500 $ 3.20 December 31, 2022 Series R 468,750 937,500 $ 4.00 December 31, 2022 Series S-A 300,000 300,000 $ 2.53 December 31, 2022 Series S 821,600 - $ 3.42 September 29, 2022 Total 2,909,850 4,115,000 | Shares of Common Stock Issuable from Warrants Outstanding as of Weighted Average August 31, August 31, Exercise Description 2017 2016 Price Expiration Series I - 921,875 $ 1.37 December 31, 2020 Series J - 3,110,378 $ 1.12 December 31, 2020 Series K - 3,110,378 $ 1.20 December 31, 2020 Series L - 500,000 $ 1.20 December 7, 2020 Series M 246,000 375,000 $ 2.34 December 31, 2020 Series N 767,000 767,000 $ 3.38 December 31, 2020 Series O 618,000 618,000 $ 3.10 October 31, 2017 Series P 309,000 309,000 $ 3.70 April 30, 2018 Series Q 937,500 937,500 $ 3.20 June 20, 2019 Series R 937,500 937,500 $ 4.00 June 20, 2021 Series S-A 300,000 - $ 2.53 July 24, 2022 Total 4,115,000 11,586,631 |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Stock Options Tables | ||
Fair value of each option award | Six Months Ended February 28, 2018 2017 Expected dividend yield – – Expected stock price volatility 83.43% – 83.55% 79% - 81% Risk-free interest rate 2.27% - 2.33% 1.95% - 2.03% Expected term (in years) 7.67 5.00 - 7.67 Exercise price $4.87 - $5.35 $ 2.71 Weighted-average grant date fair-value $3.76 - $5.64 $ 1.85 | Year Ended Year Ended August 31, 2017 August 31, 2016 Expected dividend yield – – Expected stock price volatility 79% - 81 % 82 % Risk-free interest rate 1.95% - 2.03 % 2.06 % Expected term (in years) 5.00 - 7.67 7.67 Exercise price $ 2.71 $ 3.46 Weighted-average grant date fair-value $ 1.85 $ 2.64 |
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, 2016 720,001 3.06 Grants 1,535,000 2.71 Exercises (130,000 ) 2.62 Outstanding at August 31, 2017 2,125,001 2.84 Grants 1,263,000 5.25 Forfeitures (300,000 ) 2.90 Exercises (276,667 ) 3.30 Outstanding at February 28, 2018 2,811,334 3.87 6.79 years 5,154,075 Exercisable at February 28, 2018 215,334 4.84 8.38 years 193,975 | Number of Shares Subject to Option Grants Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($) 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 Grants 1,535,000 2.71 Exercises (130,000 ) 2.62 Outstanding at August 31, 2017 2,125,001 2.84 5.31 years 2,969,800 Exercisable at August 31, 2017 237,501 3.51 6.01 years 233,900 Available for grant at August 31, 2017 2,072,580 |
Share-based compensation cost | Three Months Ended Six Months Ended February 28, February 28, 2018 2017 2018 2017 Stock Compensation Expense: SG&A $ 181,201 $ 26,667 $ 580,676 $ 79,722 R&PD 178,980 11,695 293,778 57,240 Total $ 360,181 $ 38,362 $ 874,454 $ 136,962 | Years Ended August 31, 2017 2016 Stock Compensation Expense: SG&A $ 118,969 $ 211,406 R&D 80,630 97,357 Total $ 199,599 $ 308,763 |
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 $ 2.70 1,500,000 4.36 2.70 - 4.36 2.70 3.28 17,500 8.72 3.28 17,500 8.72 3.28 3.46 35,000 7.85 3.46 25,000 7.85 3.46 4.87 217,500 9.73 4.87 97,500 9.73 4.87 5.35 1,008,000 9.85 5.35 42,000 9.85 5.35 5.94 33,334 2.82 5.94 33,334 2.82 5.94 Total 2,811,334 6.79 $ 3.87 215,334 8.38 $ 4.84 | 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 5,000 5.31 $ 0.80 5,000 5.31 $ 0.80 1.40 5,000 7.30 1.40 5,000 7.30 1.40 2.50 10,000 3.60 2.50 10,000 3.60 2.50 2.70 1,500,000 5.00 2.70 - 5.00 2.70 2.90 455,000 6.41 2.90 105,000 6.41 2.90 3.28 35,000 9.21 3.28 17,500 9.21 3.28 3.46 65,000 8.35 3.46 45,000 8.35 3.46 4.98 16,667 0.52 4.98 16,667 0.52 4.98 5.94 33,334 3.32 5.94 33,334 3.32 5.94 Total 2,125,001 5.31 $ 2.84 237,501 6.01 $ 3.51 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Net Loss Per Share Tables | ||
Computation of basic and diluted net loss per share | Three Months Ended February 28, Six Months Ended February 28, 2018 2017 2018 2017 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (1,489,463 ) $ (1,286,271 ) $ (4,188,615 ) $ (3,008,801 ) Denominator: Weighted average number of common shares outstanding 36,135,080 28,666,741 35,743,320 28,615,533 Basic and diluted EPS $ (0.04 ) $ (0.04 ) $ (0.12 ) $ (0.11 ) The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented: Stock options 2,811,334 625,001 2,811,334 625,001 Warrants 2,909,850 11,586,631 2,909,850 11,586,631 Convertible debt 3,004,655 2,772,057 3,004,655 2,772,057 Warrants issuable upon conversion of debt (See "NOTE 2 - Debt" above) 3,004,655 2,772,057 3,004,655 2,772,057 Total shares not included in the computation of diluted losses per share 11,730,494 17,755,746 11,730,494 17,755,746 | Years Ended August 31, 2017 2016 Basic and Diluted EPS Computation Numerator: Loss available to common stockholders' $ (5,353,425 ) $ (4,637,313 ) Denominator: Weighted average number of common shares outstanding 31,299,979 27,295,540 Basic and diluted EPS $ (0.17 ) $ (0.17 ) The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented: Stock options 2,125,001 720,001 Warrants 4,115,000 11,586,631 Convertible debt 2,870,739 2,678,280 Warrants issuable upon conversion of debt (See "NOTE 3 - Debt" above) 2,870,739 2,678,280 Total shares not included in the computation of diluted losses per share 11,981,479 17,663,192 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2017 | |
Income Taxes Tables | |
Deferred income taxes | 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 7,120,032 $ 5,995,528 Capitalized research and development 1,431,748 1,285,254 Depreciation (7,137 ) (82 ) Stock based compensation 1,168,629 1,207,988 Foreign affiliate interest expense 296,315 190,173 Research and development credit carry forward 438,298 369,117 Total deferred tax assets 10,447,885 9,047,979 Less: valuation allowance (10,447,885 ) (9,047,979 ) Net deferred tax asset $ - $ - |
Reconciliation income tax benefit | 2017 2016 Income tax benefit at statutory rate $ 1,820,165 $ 1,576,686 Permanent differences (490,980 ) (297,211 ) Research and development credit 70,721 63,323 Change in valuation allowance (1,399,906 ) (1,342,798 ) $ - $ - |
Organization and Going Concern
Organization and Going Concern (Details Narrative) - USD ($) | Nov. 03, 2017 | Sep. 29, 2017 | Oct. 31, 2017 | Feb. 28, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
State of incorporation | State of Nevada | State of Nevada | ||||
Date of incorporation | May 5, 1998 | May 5, 1998 | ||||
Cash | $ 1,841,672 | $ 670,853 | $ 2,509,215 | |||
Retained deficit | (43,218,367) | (39,029,752) | (33,676,327) | |||
Total current liabilities | $ 148,296 | $ 230,184 | $ 794,588 | |||
Investor [Member] | 2013 Bridge Loan Agreement [Member] | ||||||
Maturity date | Dec. 31, 2019 | |||||
Investor [Member] | 2015 Bridge Loan Agreement [Member] | ||||||
Maturity date | Dec. 31, 2019 | |||||
Subsequent Event [Member] | Series O Warrants [Member] | ||||||
Proceeds from sale of common stock and warrants | $ 248,000 | |||||
Warrants exercise | 80,000 | |||||
Subsequent Event [Member] | Investor [Member] | 2013 Bridge Loan Agreement [Member] | ||||||
Principal amount | $ 3,000,000 | |||||
Maturity date | Dec. 31, 2019 | |||||
Subsequent Event [Member] | Investor [Member] | 2015 Bridge Loan Agreement [Member] | ||||||
Principal amount | $ 600,000 | |||||
Maturity date | Dec. 31, 2019 | |||||
Subsequent Event [Member] | Private Placement [Member] | Investor [Member] | ||||||
Proceeds from sale of common stock and warrants | $ 2,555,176 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Aug. 31, 2017 | |
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 |
Furniture & equipment [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
Debt (Details)
Debt (Details) | Aug. 31, 2017USD ($) |
Debt Details | |
2,018 | |
2,019 | |
2,020 | 3,600,000 |
Total | $ 3,600,000 |
Debt (Details 1)
Debt (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Principal | $ 3,600,000 | $ 3,600,000 |
Debt Discount | (914,762) | (413,377) |
Outstanding debt balances | 2,685,238 | 3,186,623 |
Interest Payable | $ 1,263,124 | $ 1,046,377 |
March 2015 Loan as amended [Member] | ||
Issue Date | Mar. 4, 2015 | Mar. 4, 2015 |
Maturity Date | Dec. 31, 2019 | Dec. 31, 2017 |
Principal | $ 600,000 | $ 600,000 |
Debt Discount | ||
Outstanding debt balances | 600,000 | 600,000 |
Interest Payable | $ 146,747 | $ 113,465 |
2013 Note as amended [Member] | ||
Issue Date | Oct. 7, 2013 | Oct. 7, 2013 |
Maturity Date | Dec. 31, 2019 | Dec. 31, 2017 |
Principal | $ 3,000,000 | $ 3,000,000 |
Debt Discount | (914,762) | (413,377) |
Outstanding debt balances | 2,085,238 | 2,586,623 |
Interest Payable | $ 1,116,377 | $ 932,912 |
Debt (Details Narrative)
Debt (Details Narrative) | Nov. 03, 2017USD ($)shares | Nov. 03, 2017USD ($)shares | Dec. 07, 2015USD ($)$ / sharesshares | Mar. 04, 2015USD ($)$ / sharesshares | Nov. 10, 2014USD ($) | Oct. 07, 2013USD ($)$ / sharesshares | Mar. 31, 2016USD ($)pure / Integershares | Dec. 31, 2015USD ($)$ / sharesshares | Feb. 28, 2018USD ($)shares | Feb. 28, 2017USD ($) | Mar. 31, 2016USD ($)pure / Integershares | Feb. 28, 2018USD ($)shares | Feb. 28, 2017USD ($) | Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2016USD ($) | Dec. 31, 2017shares | Mar. 02, 2017shares | Oct. 07, 2015shares |
Debt discount attributable to the relative fair value | $ 3,629,309 | |||||||||||||||||
Face value of note | $ 3,000,000 | |||||||||||||||||
Accretion of debt discount | $ (227,733) | $ (323,932) | $ (572,880) | $ (687,991) | $ (1,311,445) | $ (2,335,954) | ||||||||||||
Interest expense | 122,731 | 76,127 | 216,747 | 152,465 | 312,185 | 308,983 | ||||||||||||
Additional debt discount | $ 2,476,875 | $ 914,762 | $ 914,762 | 413,377 | 1,650,120 | |||||||||||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2022 | |||||||||||||||||
Additional debt discount | $ 1,074,265 | $ 1,074,265 | ||||||||||||||||
Interest rate increase | 10.50% | |||||||||||||||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | Investor [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | |||||||||||||||||
Additional debt discount | $ 1,074,265 | $ 1,074,265 | ||||||||||||||||
Interest rate increase | 10.50% | |||||||||||||||||
2013 Bridge Loan Agreement [Member] | Investor [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | |||||||||||||||||
2015 Bridge Loan Agreement [Member] | Investor [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | |||||||||||||||||
Interest rate increase | 10.50% | |||||||||||||||||
Subsequent Event [Member] | Third Amendment to 2013 Bridge Loan Agreement [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2022 | |||||||||||||||||
Interest rate increase | 10.50% | |||||||||||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2022 | |||||||||||||||||
Interest rate increase | 10.50% | |||||||||||||||||
Subsequent Event [Member] | 2013 Bridge Loan Agreement [Member] | Investor [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | |||||||||||||||||
Subsequent Event [Member] | 2015 Bridge Loan Agreement [Member] | Investor [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | |||||||||||||||||
Series J Warrant Member | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 1.12 | |||||||||||||||||
Exercisable date | Nov. 9, 2019 | |||||||||||||||||
Series K Warrant Member | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 1.20 | |||||||||||||||||
Exercisable date | Nov. 9, 2019 | |||||||||||||||||
Series I Warrant Member | ||||||||||||||||||
Commom stock purchase | shares | 921,875 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 1.37 | |||||||||||||||||
Convertible Promissory Note [Member] | ||||||||||||||||||
Cash receved | $ 3,000,000 | |||||||||||||||||
Promissory note annual interest rate | 10.00% | 7.00% | ||||||||||||||||
Maturity date | Sep. 1, 2016 | |||||||||||||||||
Common stock conversion price | common stock at a conversion price equal to 85% of the thirty day volume weighted average price of the CompanyÂ’s common stock | |||||||||||||||||
Debt instrument convertible beneficial conversion feature | The Investor may elect to convert principal and accrued interest into units of the Company's equity securities, with each Unit consisting of (a) one share of common stock; and (b) one Stock Purchase Warrant for the purchase of one share of common stock. The conversion price for each Unit is the lesser of (i) $1.37; or (ii) 70% of the 20 day average closing price of the Company's common stock prior to conversion, subject to a floor of $1.00 with the exercise price of each Warrant being equal to 60% of the 20 day average closing price of the Company's common stock prior to conversion. If issued, the Warrant included in the Units will be exercisable for a period of five years | |||||||||||||||||
Convertible Promissory Note [Member] | Warrant [Member] | ||||||||||||||||||
Commom stock purchase | shares | 3,004,655 | 3,004,655 | ||||||||||||||||
Series L Warrant Member | ||||||||||||||||||
Commom stock purchase | shares | 500,000 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 1.20 | |||||||||||||||||
Debt discount attributable to the relative fair value | 299,750 | |||||||||||||||||
Accretion of debt discount | 74,702 | 170,614 | ||||||||||||||||
Additional debt discount | $ 33,000 | |||||||||||||||||
Series M Warrant Member | ||||||||||||||||||
Commom stock purchase | shares | 275,000 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 2.34 | |||||||||||||||||
Accretion of debt discount | 74,702 | 170,614 | ||||||||||||||||
Bridge Loan One [Member] | ||||||||||||||||||
Cash receved | $ 600,000 | |||||||||||||||||
Promissory note annual interest rate | 7.00% | |||||||||||||||||
Accretion of debt discount | $ 0 | 18,982 | $ 0 | 74,702 | ||||||||||||||
Interest expense | $ (18,846) | (11,690) | $ (33,282) | (23,306) | 47,832 | 44,742 | ||||||||||||
Default rate | 15.00% | |||||||||||||||||
Series M Stock Member | ||||||||||||||||||
Commom stock purchase | shares | 100,000 | |||||||||||||||||
Commom stock purchase price | $ / shares | $ 2.34 | |||||||||||||||||
Additional debt discount | $ 205,800 | |||||||||||||||||
Bridge Loan [Member] | ||||||||||||||||||
Cash receved | 550,010 | |||||||||||||||||
Wire fees | $ 10 | |||||||||||||||||
Accretion of debt discount | 0 | 458,777 | ||||||||||||||||
Debt instrument convertible beneficial conversion feature | 458,777 | |||||||||||||||||
Interest expense | $ 695 | 17,604 | ||||||||||||||||
PPM Member | ||||||||||||||||||
Promissory note annual interest rate | 10.00% | |||||||||||||||||
Commom stock purchase | shares | 529,230 | 529,230 | ||||||||||||||||
Investor received PPM Units | 177 | 177 | ||||||||||||||||
Coverted amount | $ 548,700 | $ 548,700 | ||||||||||||||||
Remaining amount | 18,146 | 18,146 | ||||||||||||||||
Inducement expense | $ 36,176 | $ 36,176 | ||||||||||||||||
Investor [Member] | ||||||||||||||||||
Common stock conversion price | 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. | |||||||||||||||||
Series J [Member] | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | |||||||||||||||||
Series K [Member] | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | |||||||||||||||||
Series I [Member] | ||||||||||||||||||
Commom stock purchase | shares | 921,875 | |||||||||||||||||
Series M [Member] | ||||||||||||||||||
Commom stock purchase | shares | 100,000 | |||||||||||||||||
Series M [Member] | Investor [Member] | ||||||||||||||||||
Commom stock purchase | shares | 275,000 | |||||||||||||||||
December 31 2020 Member | Series J [Member] | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | 3,110,378 | ||||||||||||||||
Additional debt discount | $ 304,817 | |||||||||||||||||
December 31 2020 Member | Series K [Member] | ||||||||||||||||||
Commom stock purchase | shares | 3,110,378 | 3,110,378 | 3,110,378 | |||||||||||||||
Additional debt discount | $ 326,590 | |||||||||||||||||
December 31 2020 Member | Series I [Member] | ||||||||||||||||||
Commom stock purchase | shares | 921,875 | 921,875 | 3,110,378 | |||||||||||||||
Additional debt discount | $ 233,234 | |||||||||||||||||
December 31 2020 Member | Series N [Member] | ||||||||||||||||||
Commom stock purchase | shares | 767,000 | 767,000 | ||||||||||||||||
Commom stock purchase price | $ / shares | $ 3.38 | |||||||||||||||||
Fair value of the Series N Warrant, per share | $ / shares | $ 2.102 | |||||||||||||||||
Fair value of the Series N Warrant total | $ 1,612,234 | |||||||||||||||||
December 31 2020 Member | Series M [Member] | Investor [Member] | ||||||||||||||||||
Commom stock purchase | shares | 275,000 | |||||||||||||||||
December 31 2022 Member | Series N [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2020 | |||||||||||||||||
Commom stock purchase | shares | 767,000 | 767,000 | 767,000 | 767,000 | ||||||||||||||
Additional debt discount | $ 327,509 | $ 327,509 | ||||||||||||||||
Extended maturity date | Dec. 31, 2022 | |||||||||||||||||
December 31 2022 Member | Series S [Member] | ||||||||||||||||||
Maturity date | Jul. 24, 2022 | |||||||||||||||||
Commom stock purchase | shares | 300,000 | 300,000 | ||||||||||||||||
Additional debt discount | $ 20,100 | $ 20,100 | ||||||||||||||||
Extended maturity date | Dec. 31, 2022 | |||||||||||||||||
December 31 2022 Member | Series R [Member] | ||||||||||||||||||
Maturity date | Jun. 20, 2021 | |||||||||||||||||
Commom stock purchase | shares | 468,750 | 468,750 | 468,750 | 468,750 | ||||||||||||||
Additional debt discount | $ 295,781 | $ 295,781 | ||||||||||||||||
Extended maturity date | Dec. 31, 2022 | |||||||||||||||||
December 31 2022 Member | Series P [Member] | ||||||||||||||||||
Maturity date | Apr. 30, 2018 | |||||||||||||||||
Commom stock purchase | shares | 213,500 | 213,500 | 213,500 | 213,500 | ||||||||||||||
Additional debt discount | $ 348,219 | $ 348,219 | ||||||||||||||||
Extended maturity date | Dec. 31, 2022 | |||||||||||||||||
December 31 2022 Member | Series M [Member] | ||||||||||||||||||
Maturity date | Dec. 31, 2020 | |||||||||||||||||
Commom stock purchase | shares | 246,000 | 246,000 | 246,000 | 246,000 | ||||||||||||||
Additional debt discount | $ 82,656 | $ 82,656 | ||||||||||||||||
Extended maturity date | Dec. 31, 2022 | |||||||||||||||||
2013 Loan Agreement Member | ||||||||||||||||||
Accretion of debt discount | 227,733 | 304,950 | $ 572,880 | 613,289 | 1,236,743 | 1,706,563 | ||||||||||||
Interest expense | $ (103,885) | $ (64,437) | (183,465) | $ (128,473) | 263,668 | $ 246,637 | ||||||||||||
Remaining debt discount | $ 914,762 | $ 413,377 |
Private Placements (Details Nar
Private Placements (Details Narrative) - USD ($) | Sep. 11, 2017 | Jul. 24, 2017 | Jun. 20, 2016 | Mar. 31, 2016 | Sep. 29, 2017 | Aug. 31, 2016 |
Number of PPM units exchange for cash | 441 | |||||
June 2016 Private Placement [Member] | ||||||
Self directed shares issued | 937,500 | |||||
Self directed shares issued, per share | $ 3.20 | |||||
Self directed shares issued, amount | $ 3,000,000 | |||||
Exercise price of series Q stock | $ 3.20 | |||||
Maturity date of series Q stock | Jun. 20, 2019 | |||||
Exercise price of series R stock purchase warrant | $ 4 | |||||
Maturity date of series R stock | Jun. 20, 2021 | |||||
Relative fair value of common stock | $ 1,338,000 | |||||
Relative fair value of series Q warrants | 783,000 | |||||
Relative fair value of series R warrants | $ 879,000 | |||||
March 2016 Private Placement [Member] | ||||||
Price per PPM unit of series O stock | $ 3.10 | |||||
Net PPM unit price amount | $ 3,100 | |||||
Exercise price of series P stock | $ 3.70 | |||||
Maturity date of series P stock | Apr. 30, 2018 | |||||
Number of PPM units issued | 618 | |||||
Number of PPM units exchange for cash | 441 | |||||
Proceeds from units in exchange for cash | $ 1,367,100 | |||||
Conversion of units under loan agreement | 177 | |||||
Proceeds from conversion of principal owed | $ 548,700 | |||||
Reset Price | $ 3.10 | |||||
Expiration of reset adjustment | Sep. 30, 2016 | |||||
July 2017 Private Placement [Member] | ||||||
Self directed shares issued | 300,000 | |||||
Self directed shares issued, per share | $ 2.30 | |||||
Self directed shares issued, amount | $ 690,000 | |||||
Exercise price of series Q stock | $ 2.53 | |||||
Relative fair value of common stock | $ 414,000 | |||||
Relative fair value of series S-A warrants | $ 276,000 | |||||
Market price per share | $ 3.20 | |||||
Estimated volatility rate | 76.13% | |||||
Risk free interest rate | 1.83% | |||||
Expected dividend rate | 0.00% | |||||
Expected life | 5 years | |||||
September 2017 Private Placement [Member] | ||||||
Self directed shares issued | 821,600 | 821,600 | ||||
Self directed shares issued, per share | $ 3.11 | $ 3.11 | ||||
Self directed shares issued, amount | $ 2,555,176 | $ 2,555,176 | ||||
Exercise price of series Q stock | $ 3.42 | |||||
Relative fair value of common stock | $ 1,540,000 | |||||
Relative fair value of series S-A warrants | $ 1,015,000 | |||||
Market price per share | $ 3.95 | |||||
Estimated volatility rate | 77.96% | |||||
Risk free interest rate | 1.71% | |||||
Expected dividend rate | 0.00% | |||||
Expected life | 5 years | |||||
Unit price, description | The unit price was based on a 15% discount to the average of the 30 day closing price (last day being Friday September 8, 2017) of the Company's common stock as reported on the OTCQB | |||||
Description of units issued | Each unit consisted of one share of common stock and one Series S Stock Purchase Warrant to purchase one (1) share of common stock at an exercise price of $3.42 per share through September 29, 2022 |
Derivative Liability Related 33
Derivative Liability Related to the PPM Units (Details) | 12 Months Ended |
Aug. 31, 2016$ / 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 34
Derivative Liability Related to the PPM Units (Details 1) | 12 Months Ended |
Aug. 31, 2016USD ($) | |
Derivative Liability Related To Ppm 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 | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2015 | |
Shares of Common Stock Issuable from Warrants | 2,909,850 | 11,586,631 | 4,115,000 | |
Weighted Average Exercise Price | $ 3.87 | $ 3.06 | $ 2.84 | $ 2.68 |
Series I [Member] | ||||
Shares of Common Stock Issuable from Warrants | 921,875 | |||
Weighted Average Exercise Price | $ 1.37 | |||
Expiration | Dec. 31, 2020 | |||
Series J [Member] | ||||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |||
Weighted Average Exercise Price | $ 1.12 | |||
Expiration | Dec. 31, 2020 | |||
Series K [Member] | ||||
Shares of Common Stock Issuable from Warrants | 3,110,378 | |||
Weighted Average Exercise Price | $ 1.20 | |||
Expiration | Dec. 31, 2020 | |||
Series L [Member] | ||||
Shares of Common Stock Issuable from Warrants | 500,000 | |||
Weighted Average Exercise Price | $ 1.20 | |||
Expiration | Dec. 7, 2020 | |||
Series M [Member] | ||||
Shares of Common Stock Issuable from Warrants | 246,000 | 375,000 | 246,000 | |
Weighted Average Exercise Price | $ 2.34 | $ 2.34 | $ 2.34 | |
Expiration | Dec. 31, 2022 | Dec. 31, 2020 | ||
Series N [Member] | ||||
Shares of Common Stock Issuable from Warrants | 767,000 | 767,000 | 767,000 | |
Weighted Average Exercise Price | $ 3.38 | $ 3.38 | $ 3.38 | |
Expiration | Dec. 31, 2022 | Dec. 31, 2020 | ||
Series O [Member] | ||||
Shares of Common Stock Issuable from Warrants | 618,000 | 618,000 | ||
Weighted Average Exercise Price | $ 3.10 | $ 3.10 | $ 3.10 | |
Expiration | Oct. 31, 2017 | Oct. 31, 2017 | ||
Series P [Member] | ||||
Shares of Common Stock Issuable from Warrants | 306,500 | 309,000 | 309,000 | |
Weighted Average Exercise Price | $ 3.70 | $ 3.70 | $ 3.70 | |
Expiration | Apr. 30, 2018 | Apr. 30, 2018 | ||
Series Q [Member] | ||||
Shares of Common Stock Issuable from Warrants | 937,500 | 937,500 | ||
Weighted Average Exercise Price | $ 3.20 | $ 3.20 | $ 3.20 | |
Expiration | Dec. 31, 2022 | Jun. 20, 2019 | ||
Series R [Member] | ||||
Shares of Common Stock Issuable from Warrants | 468,750 | 937,500 | 937,500 | |
Weighted Average Exercise Price | $ 4 | $ 4 | $ 4 | |
Expiration | Dec. 31, 2022 | Jun. 20, 2021 | ||
Series S-A [Member] | ||||
Shares of Common Stock Issuable from Warrants | 300,000 | 300,000 | ||
Weighted Average Exercise Price | $ 2.53 | $ 2.53 | $ 2.53 | |
Expiration | Dec. 31, 2022 | Jul. 24, 2022 | ||
Series S [Member] | ||||
Shares of Common Stock Issuable from Warrants | 821,600 | |||
Weighted Average Exercise Price | $ 3.42 | $ 3.42 | ||
Expiration | Sep. 29, 2022 |
Common Stock and Warrants (De36
Common Stock and Warrants (Details Narrative) - USD ($) | Nov. 03, 2017 | Sep. 07, 2017 | Jul. 07, 2017 | Jan. 05, 2016 | Dec. 28, 2017 | Nov. 21, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Nov. 15, 2016 | Oct. 30, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | Apr. 13, 2018 | Sep. 11, 2017 | Jul. 24, 2017 | Mar. 02, 2017 | Oct. 07, 2015 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 | ||||||||||||||||
Common stock, shares issued | 13,622 | 36,250,544 | 34,329,691 | 28,500,221 | |||||||||||||||
Common stock, shares outstanding | 36,250,544 | 34,329,691 | 28,500,221 | ||||||||||||||||
Proceeds from issuance of common stock | $ 40,000 | ||||||||||||||||||
Common stock option vested | 1,500,000 | ||||||||||||||||||
Common stock issued for services, shares | 5,282 | ||||||||||||||||||
Common stock issued for services, value | $ 15,000 | ||||||||||||||||||
Shares reserved for issuance under 2006 Plan | 1,035,197 | 2,072,580 | |||||||||||||||||
Cashless exercise options | 130,000 | 556,667 | |||||||||||||||||
Share issued for 2006 Plan to director | 30,000 | ||||||||||||||||||
Share issued for director net | 90,000 | 160,000 | 120,000 | ||||||||||||||||
Exercise price of share issued to directors | $ 3.75 | $ 4.87 | $ 3.28 | ||||||||||||||||
Common stock, shares issued during period | 40,000 | 40,000 | 46,520 | 282,106 | |||||||||||||||
Proceeds from issuence of units | $ 1,367,100 | ||||||||||||||||||
Number of PPM units exchange for cash | 441 | ||||||||||||||||||
Issuance of common stock shares to purchase unit | 441,000 | ||||||||||||||||||
Warrant issued under 2013 loan agreement | 2,870,739 | ||||||||||||||||||
Convertible debt | $ 3,000,000 | ||||||||||||||||||
Warrant exercised | 5,215,046 | ||||||||||||||||||
Outstanding warrants | 7,642,631 | ||||||||||||||||||
Share based compensation (Monthly) | $ 26,000 | $ 1,897,154 | $ 530,562 | 648,201 | $ 646,263 | ||||||||||||||
Proceeds from exercise of warrants | $ 2,812,426 | $ 991,860 | $ 4,367,100 | ||||||||||||||||
Stock purchase option exercised | (276,667) | (130,000) | (556,667) | ||||||||||||||||
AlastairLivesey[Member] | |||||||||||||||||||
Exercise price of share issued to directors | $ 4.87 | ||||||||||||||||||
Common stock, shares issued during period | 50,000 | ||||||||||||||||||
Stock issuance lock-in period, description | 75% of the 210,000 issued shares are subject to a one-year lock-up | ||||||||||||||||||
Stock Option [Member] | |||||||||||||||||||
Cashless exercise options | 276,667 | ||||||||||||||||||
Common stock, shares issued during period | 141,050 | ||||||||||||||||||
Stock Option [Member] | AlastairLivesey[Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 19,067 | ||||||||||||||||||
Stock purchase option exercised | 36,667 | ||||||||||||||||||
Stock Option [Member] | John Conklin [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 80,110 | ||||||||||||||||||
Stock purchase option exercised | 150,000 | ||||||||||||||||||
Three Other Individuals [Member] | Stock Option [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 41,873 | ||||||||||||||||||
Stock purchase option exercised | 90,000 | ||||||||||||||||||
July 2017 Private Placement [Member] | |||||||||||||||||||
Self directed shares issued | 300,000 | ||||||||||||||||||
Self directed shares issued, per share | $ 2.30 | ||||||||||||||||||
Self directed shares issued, amount | $ 690,000 | ||||||||||||||||||
Exercise price of series S-A stock | $ 2.53 | ||||||||||||||||||
September 2017 Private Placement [Member] | |||||||||||||||||||
Self directed shares issued | 821,600 | 821,600 | |||||||||||||||||
Self directed shares issued, per share | $ 3.11 | $ 3.11 | |||||||||||||||||
Self directed shares issued, amount | $ 2,555,176 | $ 2,555,176 | |||||||||||||||||
Exercise price of series S-A stock | $ 3.42 | ||||||||||||||||||
Maturity date | Sep. 29, 2022 | ||||||||||||||||||
June 2016 Private Placement [Member] | |||||||||||||||||||
Proceeds from issuence of units | $ 3,000,000 | ||||||||||||||||||
Issuance of common stock shares to purchase unit | 937,500 | ||||||||||||||||||
Loan Agreement [Member] | |||||||||||||||||||
Principal loan converted | $ 548,700 | ||||||||||||||||||
Conversion of units under loan agreement | 177 | ||||||||||||||||||
Issuance of common stock shares to purchase unit | 177,000 | ||||||||||||||||||
Series R [Member] | Third party [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 285,823 | ||||||||||||||||||
Warrant exercised | 468,750 | ||||||||||||||||||
Series I [Member] | |||||||||||||||||||
Common stock, shares issued | 584,634 | ||||||||||||||||||
Description of warrant issued date | 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. | ||||||||||||||||||
Commom stock purchase | 921,875 | ||||||||||||||||||
Series J [Member] | |||||||||||||||||||
Common stock, shares issued | 4,293,900 | ||||||||||||||||||
Description of warrant issued date | 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. | ||||||||||||||||||
Commom stock purchase | 3,110,378 | ||||||||||||||||||
Series K [Member] | |||||||||||||||||||
Common stock, shares issued | 4,293,900 | ||||||||||||||||||
Description of warrant issued date | 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. | ||||||||||||||||||
Commom stock purchase | 3,110,378 | ||||||||||||||||||
Series M [Member] | |||||||||||||||||||
Common stock, shares issued | 275,000 | ||||||||||||||||||
Common stock issued for exchange, shares | 129,000 | ||||||||||||||||||
Common stock issued for exchange, values | $ 301,860 | ||||||||||||||||||
Description of warrant issued date | An inducement for the Investor to extend the maturity date of the March 2015 Loan from September 4, 2015 to December 21, 2016. In June 2017, the Investor exercised 129,000 Series M Warrants. | ||||||||||||||||||
Exercise price of warrants | $ 2.34 | $ 2.34 | |||||||||||||||||
Commom stock purchase | 100,000 | ||||||||||||||||||
Warrant exercised | 129,000 | 129,000 | |||||||||||||||||
Series M [Member] | Investor [Member] | |||||||||||||||||||
Commom stock purchase | 275,000 | ||||||||||||||||||
Series L Warrant [Member] | |||||||||||||||||||
Common stock, shares issued | 336,512 | ||||||||||||||||||
Description of warrant issued date | 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. | ||||||||||||||||||
Series N [Member] | |||||||||||||||||||
Common stock, shares issued | 767,000 | ||||||||||||||||||
Description of warrant issued date | 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. | ||||||||||||||||||
Series O [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 80,000 | ||||||||||||||||||
Description of warrant issued date | The Series O and Series P Warrants were issued in connection with the March 2016 Private Placement and the Series Q and Series R Warrants were issued in connection with the June 2016 Private Placement. | ||||||||||||||||||
Exercise price of warrants | $ 3.10 | ||||||||||||||||||
Warrant exercised | 80,000 | ||||||||||||||||||
Proceeds from exercise of warrants | $ 248,000 | ||||||||||||||||||
Series P [Member] | |||||||||||||||||||
Description of warrant issued date | The Series O and Series P Warrants were issued in connection with the March 2016 Private Placement and the Series Q and Series R Warrants were issued in connection with the June 2016 Private Placement. | ||||||||||||||||||
Series P [Member] | Third Holders [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 2,500 | ||||||||||||||||||
Exercise price of warrants | $ 3.70 | ||||||||||||||||||
Warrant exercised | 2,500 | ||||||||||||||||||
Proceeds from exercise of warrants | $ 9,250 | ||||||||||||||||||
Series Q warrants [Member] | Third party [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 189,940 | ||||||||||||||||||
Warrant exercised | 468,750 | ||||||||||||||||||
Series Q warrants [Member] | Investor [Member] | |||||||||||||||||||
Common stock issued for exchange, shares | 189,940 | ||||||||||||||||||
Warrant exercised | 468,750 | ||||||||||||||||||
Subsequent Event [Member] | Stock Option [Member] | |||||||||||||||||||
Common stock, shares issued | 5,112 | ||||||||||||||||||
Cashless exercise options | 276,667 | ||||||||||||||||||
Subsequent Event [Member] | Series M, N and P [Member] | Warrant [Member] | |||||||||||||||||||
Shares issuable upon conversion of warrants | 213,500 | ||||||||||||||||||
Subsequent Event [Member] | Series R [Member] | Warrant [Member] | |||||||||||||||||||
Shares issuable upon conversion of warrants | 468,750 | ||||||||||||||||||
Subsequent Event [Member] | Series M, N, P, R and S-A [Member] | Warrant [Member] | |||||||||||||||||||
Maturity date | Dec. 31, 2022 | ||||||||||||||||||
Subsequent Event [Member] | Series Q warrants [Member] | Third party [Member] | |||||||||||||||||||
Common stock, shares issued | 189,940 | ||||||||||||||||||
Subsequent Event [Member] | Series Q warrants [Member] | Investor [Member] | |||||||||||||||||||
Common stock, shares issued | 189,940 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
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 | 7 years 8 months 2 days | ||
Exercise price | $ 5.25 | $ 2.71 | $ 2.71 | $ 3.46 |
Weighted-average grant date fair-value | $ 1.85 | $ 1.85 | $ 2.64 | |
Minimum [Member] | ||||
Expected stock price volatility | 83.43% | 79.00% | 79.00% | |
Risk-free interest rate | 2.27% | 1.95% | 1.95% | |
Expected term (in years) | 5 years | 5 years | ||
Exercise price | $ 4.87 | |||
Weighted-average grant date fair-value | $ 3.76 | |||
Maximum [Member] | ||||
Expected stock price volatility | 83.55% | 81.00% | 81.00% | |
Risk-free interest rate | 2.33% | 2.03% | 2.03% | |
Expected term (in years) | 7 years 8 months 1 day | 7 years 8 months 2 days | ||
Exercise price | $ 5.35 | |||
Weighted-average grant date fair-value | $ 5.64 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Number of Options | ||||
Outstanding Beginning | 2,125,001 | 720,001 | 720,001 | 1,267,502 |
Grants | 1,263,000 | 1,535,000 | 65,000 | |
Forfeitures | 300,000 | (55,834) | ||
Exercises | (276,667) | (130,000) | (556,667) | |
Outstanding Ending | 2,811,334 | 2,125,001 | 720,001 | |
Exercisable Ending | 215,334 | 237,501 | ||
Available for grant Ending | 2,072,580 | |||
Weighted Average Exercise Price ($) | ||||
Weighted-average exercise price Beginning | $ 2.84 | $ 3.06 | $ 3.06 | $ 2.68 |
Grants | 5.25 | $ 2.71 | 2.71 | 3.46 |
Forfeitures | 2.90 | 3.23 | ||
Exercises | 3.30 | 2.62 | 2.22 | |
Weighted-average exercise price Ending | 3.87 | 2.84 | $ 3.06 | |
Exercisable Ending | $ 4.84 | $ 3.51 | ||
Weighted Average Remaining Contractual Term | ||||
Outstanding Ending | 6 years 9 months 14 days | 5 years 3 months 22 days | ||
Exercisable Ending | 8 years 4 months 16 days | 6 years 4 days | ||
Aggregate Intrinsic Value ($) | ||||
Outstanding Ending | $ 5,154,075 | $ 2,969,800 | ||
Exercisable Ending | $ 193,975 | $ 233,900 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Stock Compensation Expense: | ||||||
SG&A | $ 181,201 | $ 26,667 | $ 580,676 | $ 79,722 | $ 118,969 | $ 211,406 |
R&D | 178,980 | 11,695 | 293,778 | 57,240 | 80,630 | 97,357 |
Total | $ 360,181 | $ 38,362 | $ 874,454 | $ 136,962 | $ 199,599 | $ 308,763 |
Stock Options (Details 3)
Stock Options (Details 3) - $ / shares | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2015 | |
Number of Shares Subject to Outstanding Options | 2,811,334 | 2,125,001 | 720,001 | 1,267,502 |
Weighted average contractural life (years) | 6 years 9 months 14 days | 5 years 3 months 22 days | ||
Weighted-average exercise price | $ 3.87 | $ 2.84 | $ 3.06 | $ 2.68 |
Number of Shares Subject to options exercisable | 215,334 | 237,501 | ||
Weighted average contractural life (years) of options exercisable | 8 years 4 months 16 days | 6 years 4 days | ||
Weighted-average exercise price of options exercisable | $ 4.84 | $ 3.51 | ||
$0.80 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 5,000 | |||
Weighted average contractural life (years) | 5 years 3 months 22 days | |||
Weighted-average exercise price | $ 0.80 | |||
Number of Shares Subject to options exercisable | 5,000 | |||
Weighted average contractural life (years) of options exercisable | 5 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 | 1,500,000 | 5,000 | ||
Weighted average contractural life (years) | 4 years 4 months 9 days | 7 years 3 months 19 days | ||
Weighted-average exercise price | $ 2.70 | $ 1.40 | ||
Number of Shares Subject to options exercisable | 5,000 | |||
Weighted average contractural life (years) of options exercisable | 4 years 4 months 9 days | 7 years 3 months 19 days | ||
Weighted-average exercise price of options exercisable | $ 2.70 | $ 1.40 | ||
$2.50 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 217,500 | 10,000 | ||
Weighted average contractural life (years) | 9 years 8 months 22 days | 3 years 7 months 6 days | ||
Weighted-average exercise price | $ 4.87 | $ 2.50 | ||
Number of Shares Subject to options exercisable | 97,500 | 10,000 | ||
Weighted average contractural life (years) of options exercisable | 9 years 8 months 22 days | 3 years 7 months 6 days | ||
Weighted-average exercise price of options exercisable | $ 4.87 | $ 2.50 | ||
$2.70 Per Share [Member] | ||||
Weighted average contractural life (years) | 5 years | |||
Weighted average contractural life (years) of options exercisable | 5 years | |||
$2.90 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 455,000 | |||
Weighted average contractural life (years) | 6 years 4 months 28 days | |||
Weighted-average exercise price | $ 2.90 | |||
Number of Shares Subject to options exercisable | 105,000 | |||
Weighted average contractural life (years) of options exercisable | 6 years 4 months 28 days | |||
Weighted-average exercise price of options exercisable | $ 2.90 | |||
$3.28 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 35,000 | |||
Weighted average contractural life (years) | 9 years 2 months 16 days | |||
Weighted-average exercise price | $ 3.28 | |||
Number of Shares Subject to options exercisable | 17,500 | |||
Weighted average contractural life (years) of options exercisable | 9 years 2 months 16 days | |||
Weighted-average exercise price of options exercisable | $ 3.28 | |||
$3.46 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 1,008,000 | 65,000 | ||
Weighted average contractural life (years) | 9 years 10 months 6 days | 8 years 4 months 6 days | ||
Weighted-average exercise price | $ 5.35 | $ 3.46 | ||
Number of Shares Subject to options exercisable | 42,000 | 45,000 | ||
Weighted average contractural life (years) of options exercisable | 9 years 10 months 6 days | 8 years 4 months 6 days | ||
Weighted-average exercise price of options exercisable | $ 5.35 | $ 3.46 | ||
$4.98 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 16,667 | |||
Weighted average contractural life (years) | 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 | 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) | 3 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 | 3 years 3 months 26 days | |||
Weighted-average exercise price of options exercisable | $ 5.94 | |||
$2.70 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 1,500,000 | |||
Weighted-average exercise price | $ 2.70 | |||
Number of Shares Subject to options exercisable | ||||
Weighted-average exercise price of options exercisable | $ 2.70 | |||
$5.94 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 33,334 | |||
Weighted average contractural life (years) | 2 years 9 months 25 days | |||
Weighted-average exercise price | $ 5.94 | |||
Number of Shares Subject to options exercisable | 33,334 | |||
Weighted average contractural life (years) of options exercisable | 2 years 9 months 25 days | |||
Weighted-average exercise price of options exercisable | $ 5.94 | |||
$3.46 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 35,000 | |||
Weighted average contractural life (years) | 7 years 10 months 6 days | |||
Weighted-average exercise price | $ 3.46 | |||
Number of Shares Subject to options exercisable | 25,000 | |||
Weighted average contractural life (years) of options exercisable | 7 years 10 months 6 days | |||
Weighted-average exercise price of options exercisable | $ 3.46 | |||
$3.28 Per Share [Member] | ||||
Number of Shares Subject to Outstanding Options | 17,500 | |||
Weighted average contractural life (years) | 8 years 8 months 19 days | |||
Weighted-average exercise price | $ 3.28 | |||
Number of Shares Subject to options exercisable | 17,500 | |||
Weighted average contractural life (years) of options exercisable | 8 years 8 months 19 days | |||
Weighted-average exercise price of options exercisable | $ 3.28 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | Jul. 07, 2017 | Dec. 27, 2017 | Nov. 21, 2017 | Aug. 31, 2017 | Nov. 15, 2016 | Feb. 28, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Stock option available for grant shares | 2,072,580 | 2,072,580 | ||||||
Stock option exercise | 130,000 | 130,000 | 1,277,834 | |||||
Closing stock option exercise price | $ 4.20 | $ 5.70 | $ 4.20 | |||||
Stock option outstanding | 2,075,000 | 2,778,000 | 2,075,000 | |||||
Stock options granted | 1,500,000 | 35,000 | ||||||
Stock options exercise price | $ 2.70 | $ 3.28 | $ 5.70 | $ 4.20 | ||||
Expected period for recognition | 1 year 6 months | |||||||
Common stock, shares issued during period | 40,000 | 40,000 | 46,520 | 282,106 | ||||
Aggregate intrinsic value of options | $ 182,000 | $ 186,500 | $ 1,277,834 | |||||
Cashless exercise options | 130,000 | 130,000 | 556,667 | |||||
Share based compensation (Monthly) | $ 26,000 | |||||||
Common stock option vested | 1,500,000 | |||||||
Grant date fair value per option | $ 1.84 | |||||||
Stock option exercise, total | (276,667) | (130,000) | (556,667) | |||||
Forfeitures | (300,000) | 55,834 | ||||||
Directors and Employees [Member] | ||||||||
Stock options granted | 255,000 | |||||||
Stock options exercise price | $ 4.87 | |||||||
Common stock, shares issued during period | 50,000 | |||||||
Two Employees [Member] | ||||||||
Stock options granted | 35,000 | |||||||
Stock options exercise price | $ 3.28 | |||||||
Employment Agreement [Member] | ||||||||
Stock options granted | 1,008,000 | |||||||
Maturity date | Dec. 31, 2017 | |||||||
Vesting rate description | 1/48th per month | |||||||
Forfeitures | 300,000 | |||||||
Exercise price | $ 5.35 | |||||||
Stock Option [Member] | ||||||||
Common stock, shares issued during period | 141,050 | |||||||
Aggregate intrinsic value of options | $ 1,015,585 | |||||||
Cashless exercise options | 276,667 | |||||||
Share based compensation expenses not yet recognized | $ 2,792,847 | $ 5,801,820 | $ 2,792,847 | |||||
Share based compensation expenses to be recognized in 1.25 years | 32,847 | 3,041,820 | 32,847 | |||||
Conditional share based compensation to be recognized in future | $ 2,760,000 | $ 2,760,000 | $ 2,760,000 | |||||
Share based compensation recognition period | 1 year 2 months 30 days | 4 years | ||||||
Stock Option [Member] | Directors and Employees [Member] | ||||||||
Stock option exercise, total | 36,667 | |||||||
2006 Incentive Stock Option Plan [Member] | ||||||||
Stock option approved | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Stock option available for grant shares | 2,072,580 | 1,035,197 | 2,072,580 | |||||
Stock option exercise | 1,013,334 | 624,565 | 1,013,334 | |||||
Maturity date | Feb. 7, 2021 | Feb. 7, 2021 | ||||||
Stock option exercise, total | 1,290,001 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Numerator: | ||||||
Loss available to common stockholders' | $ (1,489,463) | $ (1,286,271) | $ (4,188,615) | $ (3,008,801) | $ (5,353,425) | $ (4,637,313) |
Denominator: | ||||||
Weighted average number of common shares outstanding | 36,135,080 | 28,666,741 | 35,743,320 | 28,615,533 | 31,299,979 | 27,295,540 |
Basic and diluted EPS | $ (0.04) | $ (0.04) | $ (0.12) | $ (0.11) | $ (0.17) | $ (0.17) |
The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented: | ||||||
Stock options | 2,811,334 | 625,001 | 2,811,334 | 625,001 | 2,125,001 | 720,001 |
Warrants | 2,909,850 | 11,586,631 | 2,909,850 | 11,586,631 | 4,115,000 | 11,586,631 |
Convertible debt | 3,004,655 | 2,772,057 | 3,004,655 | 2,772,057 | 2,870,739 | 2,678,280 |
Warrants issuable upon conversion of debt (See "NOTE 2 - Debt" above) | 3,004,655 | 2,772,057 | 3,004,655 | 2,772,057 | 2,870,739 | 2,678,280 |
Total shares not included in the computation of diluted losses per share | 11,730,494 | 17,755,746 | 11,730,494 | 17,755,746 | 11,981,479 | 17,663,192 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Nov. 03, 2017USD ($)shares | Nov. 03, 2017USD ($)shares | Aug. 07, 2017USD ($) | Jul. 07, 2017USD ($)shares | Nov. 14, 2016USD ($) | Jul. 24, 2017USD ($)$ / sharesshares | Feb. 28, 2018USD ($)shares | Feb. 28, 2017USD ($) | Feb. 28, 2018USD ($)shares | Feb. 28, 2017USD ($) | Aug. 31, 2017USD ($)shares | Aug. 31, 2016USD ($)shares | Oct. 07, 2017$ / shares | Dec. 31, 2017shares | Mar. 02, 2017shares | Dec. 31, 2016shares | Dec. 31, 2015USD ($)shares | Dec. 22, 2015USD ($) | Oct. 07, 2015USD ($)shares |
Outstanding warrants | 7,642,631 | ||||||||||||||||||
Issuance of common stock | 13,622 | 36,250,544 | 36,250,544 | 34,329,691 | 28,500,221 | ||||||||||||||
Share-based Compensation (monthly) | $ | $ 26,000 | ||||||||||||||||||
Ownership percentage | 10.00% | 10.00% | |||||||||||||||||
Debt discount | $ | $ 914,762 | $ 914,762 | $ 413,377 | $ 1,650,120 | $ 2,476,875 | ||||||||||||||
Bridge Loan [Member] | |||||||||||||||||||
Cash received | $ | $ 550,000 | ||||||||||||||||||
Advance cash received | $ | $ 150,000 | 400,000 | |||||||||||||||||
Wire fees | $ | $ 5 | ||||||||||||||||||
Third Amendment to 2013 Bridge Loan Agreement [Member] | |||||||||||||||||||
Increase in interest rate | 10.50% | ||||||||||||||||||
Maturity date | Dec. 31, 2022 | ||||||||||||||||||
Debt discount | $ | $ 1,074,265 | $ 1,074,265 | |||||||||||||||||
Series I [Member] | |||||||||||||||||||
Commom stock purchase | 921,875 | ||||||||||||||||||
Issuance of common stock | 584,634 | ||||||||||||||||||
Series I [Member] | December 31 2020 Member | |||||||||||||||||||
Commom stock purchase | 921,875 | 3,110,378 | 921,875 | ||||||||||||||||
Debt discount | $ | $ 233,234 | ||||||||||||||||||
Series J [Member] | |||||||||||||||||||
Commom stock purchase | 3,110,378 | ||||||||||||||||||
Issuance of common stock | 4,293,900 | ||||||||||||||||||
Series J [Member] | December 31 2020 Member | |||||||||||||||||||
Commom stock purchase | 3,110,378 | 3,110,378 | |||||||||||||||||
Debt discount | $ | $ 304,817 | ||||||||||||||||||
Series K [Member] | |||||||||||||||||||
Commom stock purchase | 3,110,378 | ||||||||||||||||||
Issuance of common stock | 4,293,900 | ||||||||||||||||||
Series K [Member] | December 31 2020 Member | |||||||||||||||||||
Commom stock purchase | 3,110,378 | 3,110,378 | 3,110,378 | ||||||||||||||||
Debt discount | $ | $ 326,590 | ||||||||||||||||||
Series L [Member] | |||||||||||||||||||
Commom stock purchase | 500,000 | ||||||||||||||||||
Issuance of common stock | 5,215,046 | ||||||||||||||||||
Series N [Member] | |||||||||||||||||||
Issuance of common stock | 767,000 | ||||||||||||||||||
Series N [Member] | December 31 2020 Member | |||||||||||||||||||
Commom stock purchase | 767,000 | 767,000 | |||||||||||||||||
Series N [Member] | December 31 2022 Member | |||||||||||||||||||
Commom stock purchase | 767,000 | 767,000 | 767,000 | 767,000 | |||||||||||||||
Maturity date | Dec. 31, 2020 | ||||||||||||||||||
Debt discount | $ | $ 327,509 | $ 327,509 | |||||||||||||||||
Series M [Member] | |||||||||||||||||||
Commom stock purchase | 100,000 | ||||||||||||||||||
Issuance of common stock | 275,000 | ||||||||||||||||||
Series M [Member] | December 31 2022 Member | |||||||||||||||||||
Commom stock purchase | 246,000 | 246,000 | 246,000 | 246,000 | |||||||||||||||
Maturity date | Dec. 31, 2020 | ||||||||||||||||||
Debt discount | $ | $ 82,656 | $ 82,656 | |||||||||||||||||
Series P [Member] | December 31 2022 Member | |||||||||||||||||||
Commom stock purchase | 213,500 | 213,500 | 213,500 | 213,500 | |||||||||||||||
Maturity date | Apr. 30, 2018 | ||||||||||||||||||
Debt discount | $ | $ 348,219 | $ 348,219 | |||||||||||||||||
Series R [Member] | December 31 2022 Member | |||||||||||||||||||
Commom stock purchase | 468,750 | 468,750 | 468,750 | 468,750 | |||||||||||||||
Maturity date | Jun. 20, 2021 | ||||||||||||||||||
Debt discount | $ | $ 295,781 | $ 295,781 | |||||||||||||||||
Series S-A [Member] | December 31 2022 Member | |||||||||||||||||||
Commom stock purchase | 300,000 | 300,000 | |||||||||||||||||
Investor [Member] | |||||||||||||||||||
Short term debt repaid in cash, Advance | $ | 25,720 | ||||||||||||||||||
Investor [Member] | Third Amendment to 2013 Bridge Loan Agreement [Member] | |||||||||||||||||||
Terms of agreement | Third Amendment to the 2015 Bridge Loan Agreement, the rate of interest increased to 10.5% and the following warrants, held by the Investor, had their maturity date extended to December 31, 2022: a) Series M Warrant to purchase 246,000 shares; b) Series N Warrant to purchase 767,000 shares; c) Series P Warrant to purchase 213,500 shares; d) Series R Warrant to purchase 468,750; and e) Series S-A Warrant to purchase 300,000 shares | ||||||||||||||||||
Increase in interest rate | 10.50% | ||||||||||||||||||
Maturity date | Dec. 31, 2019 | ||||||||||||||||||
Debt discount | $ | $ 1,074,265 | $ 1,074,265 | |||||||||||||||||
Investor [Member] | Series M [Member] | |||||||||||||||||||
Commom stock purchase | 275,000 | ||||||||||||||||||
Exercise price | $ / shares | $ 2.34 | ||||||||||||||||||
Investor [Member] | Series M [Member] | December 31 2020 Member | |||||||||||||||||||
Commom stock purchase | 275,000 | ||||||||||||||||||
Sierchio [Member] | |||||||||||||||||||
Legal services | $ | 71,767 | $ 45,005 | 145,834 | $ 151,555 | $ 321,739 | 291,951 | |||||||||||||
Satterlee [Member] | |||||||||||||||||||
Owed amount included in accounts payable | $ | 71,767 | 71,767 | 105,184 | ||||||||||||||||
March 2015 [Member] | |||||||||||||||||||
Increase (decrease) in related party payable | $ | $ 19,599 | ||||||||||||||||||
Principal amount | $ | 18,146 | ||||||||||||||||||
Accrued interest | $ | $ 1,453 | ||||||||||||||||||
Sierchio & Partners LLP [Member] | |||||||||||||||||||
Owed amount included in accounts payable | $ | 53,467 | ||||||||||||||||||
Consulting Agreement [Member] | |||||||||||||||||||
Related party expense | $ | $ 15,000 | $ 15,000 | $ 30,000 | $ 30,000 | $ 60,000 | $ 60,000 | |||||||||||||
Consulting Agreement [Member] | Mr. Bhogal [Member] | |||||||||||||||||||
Share-based Compensation (monthly) | $ | $ 5,000 | ||||||||||||||||||
Private Placement [Member] | Investor [Member] | |||||||||||||||||||
Common stock shares reserved for future issuance | 300,000 | ||||||||||||||||||
Unit price per share | $ / shares | $ 2.30 | ||||||||||||||||||
Proceeds from units reserved for future issuance | $ | $ 690,000 | ||||||||||||||||||
Terms of agreement | Each unit consisted of one share of common stock and one Series S Warrant to purchase one (1) share of common stock at an exercise price of $2.53 per share through July 24, 2022. The warrants may be exercised on a cashless basis. | ||||||||||||||||||
Private Placement [Member] | Series S Warrant [Member] | Investor [Member] | |||||||||||||||||||
Exercise price | $ / shares | $ 2.53 | ||||||||||||||||||
March 2016 Private Placement [Member] | Investor [Member] | |||||||||||||||||||
Issuance of common stock | 427,000 | ||||||||||||||||||
Conversion of units under loan agreement | 177 | ||||||||||||||||||
Number of units purchased | 250 | ||||||||||||||||||
Principal loan converted | $ | $ 548,700 | ||||||||||||||||||
Proceed from private placement | $ | $ 775,000 | ||||||||||||||||||
March 2016 Private Placement [Member] | Series O [Member] | Investor [Member] | |||||||||||||||||||
Outstanding warrants | 427,000 | ||||||||||||||||||
March 2016 Private Placement [Member] | Series P [Member] | Investor [Member] | |||||||||||||||||||
Outstanding warrants | 213,500 | ||||||||||||||||||
June 2016 Private Placement [Member] | Investor [Member] | |||||||||||||||||||
Issuance of common stock | 468,750 | ||||||||||||||||||
Number of units purchased | 468,750 | ||||||||||||||||||
Proceed from private placement | $ | $ 1,500,000 | ||||||||||||||||||
June 2016 Private Placement [Member] | Series Q [Member] | Investor [Member] | |||||||||||||||||||
Issuance of common stock | 468,750 | ||||||||||||||||||
June 2016 Private Placement [Member] | Series R [Member] | Investor [Member] | |||||||||||||||||||
Issuance of common stock | 468,750 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Aug. 31, 2017 | Aug. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 7,120,032 | $ 5,995,528 |
Capitalized research and development | 1,431,748 | 1,285,254 |
Depreciation | (7,137) | (82) |
Stock based compensation | 1,168,629 | 1,207,988 |
Foreign affiliate interest expense | 296,315 | 190,173 |
Research and development credit carry forward | 438,298 | 369,117 |
Total deferred tax assets | 10,447,885 | 9,047,979 |
Less: valuation allowance | (10,447,885) | (9,047,979) |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Income Taxes Details 1 | ||
Income tax benefit at statutory rate | $ 1,820,165 | $ 1,576,686 |
Permanent differences | (490,980) | (297,211) |
Research and development credit | 70,721 | 63,323 |
Change in valuation allowance | (1,399,906) | (1,342,798) |
Total |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Income Taxes Details Narrative | ||
Change in valuation allowance | $ 1,399,906 | $ 1,342,798 |
Research and development credit carry forward | 438,298 | $ 369,117 |
Federal income tax | $ 20,941,270 | |
Federal income tax expire period | August 31, 2020 to August 31, 2037 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 13, 2018 | Mar. 03, 2018 | Nov. 03, 2017 | Sep. 11, 2017 | Jul. 07, 2017 | Feb. 28, 2018 | Sep. 07, 2017 | Aug. 31, 2017 | Aug. 31, 2016 |
Stock option exercise | 130,000 | 1,277,834 | |||||||
Issuance of common stock | 13,622 | 36,250,544 | 34,329,691 | 28,500,221 | |||||
Proceeds from issuance of common stock | $ 40,000 | ||||||||
Cashless exercise options | 130,000 | 556,667 | |||||||
Stock Option [Member] | |||||||||
Cashless exercise options | 276,667 | ||||||||
2013 Bridge Loan Agreement [Member] | Investor [Member] | |||||||||
Maturity date | Dec. 31, 2019 | ||||||||
2015 Bridge Loan Agreement [Member] | Investor [Member] | |||||||||
Interest rate increase | 10.50% | ||||||||
Maturity date | Dec. 31, 2019 | ||||||||
Subsequent Event [Member] | Stock Option [Member] | |||||||||
Stock option exercise | 15,000 | ||||||||
Issuance of common stock | 5,112 | ||||||||
Cashless exercise options | 276,667 | ||||||||
Subsequent Event [Member] | Two other employees [Member] | |||||||||
Stock option exercise | 72,500 | ||||||||
Issuance of common stock | 33,151 | ||||||||
Subsequent Event [Member] | John Conklin [Member] | |||||||||
Stock option exercise | 100,000 | ||||||||
Issuance of common stock | 46,097 | ||||||||
Subsequent Event [Member] | September 2017 Private Placement [Member] | |||||||||
Self directed shares issued | 821,600 | ||||||||
Self directed shares issued, per share | $ 3.11 | ||||||||
Self directed shares issued, amount | $ 2,555,176 | ||||||||
Exercise price | $ 3.42 | ||||||||
Description Subscription agreements | The unit price was based on a 15% discount to the average of the 30 day closing price (last day being Friday September 8, 2017) of the Company’s common stock as reported on the OTCQB. Each unit consisted of one share of common stock and one Series S Stock Purchase Warrant to purchase one (1) share of common stock at an exercise price of $3.42 per share through September 29, 2017. | ||||||||
Subsequent Event [Member] | Series P [Member] | |||||||||
Stock option exercise | 1,000 | 500 | |||||||
Issuance of common stock | 500 | 500 | |||||||
Exercise price | $ 3.70 | $ 3.70 | |||||||
Proceeds from issuance of common stock | $ 3,700 | $ 1,850 | |||||||
Subsequent Event [Member] | Series O [Member] | September 2017 Private Placement [Member] | |||||||||
Stock option exercise | 80,000 | ||||||||
Warrants Purchase | 80,000 | ||||||||
Exercise price | $ 3.10 | ||||||||
Proceeds from issuance of common stock | $ 248,000 | ||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | |||||||||
Interest rate increase | 10.50% | ||||||||
Maturity date | Dec. 31, 2022 | ||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | Series R [Member] | |||||||||
Warrants Purchase | 468,750 | ||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | Series P [Member] | |||||||||
Warrants Purchase | 213,500 | ||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | Series N [Member] | |||||||||
Warrants Purchase | 767,000 | ||||||||
Subsequent Event [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | Series M [Member] | |||||||||
Warrants Purchase | 246,000 | ||||||||
Subsequent Event [Member] | 2013 Bridge Loan Agreement [Member] | Investor [Member] | |||||||||
Maturity date | Dec. 31, 2019 | ||||||||
Subsequent Event [Member] | 2015 Bridge Loan Agreement [Member] | Investor [Member] | |||||||||
Maturity date | Dec. 31, 2019 | ||||||||
Subsequent Event [Member] | Series S-A [Member] | Third Amendment 2015 Bridge Loan Agreement [Member] | |||||||||
Warrants Purchase | 300,000 | ||||||||
Subsequent Event [Member] | Series Q [Member] | Third party [Member] | |||||||||
Issuance of common stock | 189,940 | ||||||||
Warrants Purchase | 468,750 | ||||||||
Subsequent Event [Member] | Series Q [Member] | Investor [Member] | |||||||||
Issuance of common stock | 189,940 | ||||||||
Warrants Purchase | 468,750 |