10-K
1
f10k_110920.htm
FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2020
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 333-127953
SOLARWINDOW TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
300 Main Street, Suite 6, Vestal, NY 13850
(Former name, former address and former fiscal year, if changed since last report)
(800) 213-0689
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Trading Symbol(s) Name of each exchange on which registered
N/A N/A N/A
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act.
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes ☐ No ☒
The aggregate market value of SolarWindow common
stock held by non-affiliates of the registrant as of the last day of our most recently completed second quarter on February 28,
2020 was $36,464,000.
As of November 9, 2020, 52,959,323 shares of common stock, par value
$0.001, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
SOLARWINDOW TECHNOLOGIES, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEARS ENDED AUGUST 31, 2020 and 2019
PART I PAGE
Item 1. Business 4
Item 1A. Risk Factors 11
Item1B. Unresolved Staff Comments 26
Item 2. Properties 26
Item 3. Legal Proceedings 26
PART II
Item 7A. Qualitative and Quantitative Disclosures About Market Risk 34
Item 8. Financial Statements 34
Item 9A. Controls and Procedures 34
Item 9B. Other Information 35
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 35
Item 11. Executive Compensation 40
Item 14. Principal Accounting Fees and Services 48
PART IV
Item 15. Exhibits, Financial Statement Schedules 50
SIGNATURES 55
INDEX TO FINANCIAL STATEMENTS F-1 to F-21
PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains
forward looking statements. Forward-looking statements discuss matters that are not historical facts. Because they discuss future
events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,”
“intend,” “could,” “should,” “would,” “may,” “seek,” “plan,”
“might,” “will,” “expect,” “predict,” “project,” “forecast,”
“potential,” “continue” negatives thereof or similar expressions. Forward-looking statements contained
in this Report speak only as of the date of this report, are based on various underlying assumptions and current expectations about
the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause
our actual results, level of activity, performance or achievement to be materially different from the results of operations or
plans expressed or implied by such forward-looking statements.
Such forward-looking statements include statements
regarding, among other things, (a) the potential markets for our technologies, our potential profitability, and cash flows (b)
our growth strategies (c) expectations from our ongoing research and development activities (d) anticipated trends in the technology
and alternative energy industries (e) our future financing plans and (f) our anticipated needs for working capital. This information
may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements
to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements.
These statements may be found at various places throughout this report including, but not limited to the discussions under Item
7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”
Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors,
including, without limitation, the matters described in this Form 10-K generally. In light of these risks and uncertainties, there
can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information
expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary
to make the required statements, in light of the circumstances under which they are made, not misleading.
Although forward-looking statements in this
report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown
risks, business, economic and other risks and factors that may cause actual results to be materially different from those discussed
in these forward-looking statements. Many of those factors are outside of our control and could cause actual results to differ
materially from the results expressed or implied by those forward-looking statements. Accordingly, you are urged not to place undue
reliance on these forward-looking statements, which speak only as of the date of this report.
We assume no obligation to update any forward-looking
statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required
by applicable law or regulation.
All references to “we,” “us,”
or “our,” refer to SolarWindow Technologies, Inc.
Item 1.Business
Background
We are a pre-revenue company developing proprietary
transparent electricity-generating coatings (“SolarWindowTM Coatings” or “LiquidElectricityTM Coatings”).
Our LiquidElectricityTM Coatings generate electricity by harvesting light energy from natural sun, artificial light, and low,
shaded, or reflected light conditions. We apply ultra-thin layers of LiquidElectricityTM Coatings to rigid glass, and flexible
glass and plastic surfaces where they transform otherwise ordinary surfaces into organic photovoltaic devices.
Potential applications of our LiquidElectricityTM
Coatings span multiple industries, including architectural, automotive, agrivoltaic (greenhouse agriculture), aerospace, commercial
transportation and marine.
We have achieved important milestones and overcome
major technical challenges in order to broaden the range of materials and products that we can coat to generate electricity. Our
goals in developing electricity-generating products have included ensuring transparency and esthetics, optimizing power generation,
and lowering the costs of our coatings materials and their related application.
We first coated rigid flat glass with our LiquidElectricityTM
Coatings to generate electricity. Numerous technological advancements over the past two years enabled us to fabricate panes of
flat glass layered with LiquidElectricityTM coatings at room temperature and ambient pressure; this process represents a significant
technical achievement which may provide manufacturing advantages over expensive and cumbersome high temperature and high positive
or negative pressure-sensitive manufacturing methods common to conventional solar photovoltaic manufacturing.
Among important field tests, LiquidElectricityTM
Coatings on flat glass have been successfully processed through the rigorous autoclave system for window glass lamination at a
commercial fabricator. At the fabricator’s facilities, glass panes layered with LiquidElectricityTM Coatings were subjected
to the extremely high heat and pressure of autoclave equipment used in commercial glass lamination. Subsequent performance testing
confirmed that glass with SolarWindowTM Coatings continued to produce power.
LiquidElectricityTM Coatings on glass
panes have also been subjected to more than 200 freeze/thaw cycles, yielding favorable performance. SolarWindowTM edge sealing
processes and materials contributed to the prevention of moisture-related damage, an important feature.
In addition to flat glass, we have successfully
applied our LiquidElectricityTM Coatings to generate electricity on flexible glass and plastics. On glass surfaces, our electricity-generating
SolarWindowTM Coatings could enable new and retrofit architectural applications such as windows for commercial towers, glass
walls and curtain walls, room dividers, and other related products. On flexible surfaces, our electricity-generating SolarWindowTM
products present applications in various industries, including: automotive, light and commercial trucks, recreational vehicles,
marine, aerospace and defense, agrivoltaics, and others.
Among our near-term product iterations, is
the electrification of glass surfaces. LiquidElectricityTM coatings could produce electricity-generating windows for potential
use in new construction and retrofit applications in commercial buildings, when applied using our proprietary processes and subsequently
fabricated into a window product.
In a recent demonstration in July 2020, LiquidElectricityTM
Coatings applied to otherwise ordinary glass panes resulted in the fabrication of a 9 square-foot SolarWindowTM array, our
largest and most transparent array, which displayed voltage and successfully powered a series of LED lights. In October 2020, we
released video footage of our electricity-generating coatings applied to glass, successfully powering LED lights while undergoing
testing under various simulated light conditions.
Currently, our LiquidElectricityTM Coatings
and SolarWindowTM products are under development with support from commercial contract firms who provide expertise in specialty
chemistry and coatings processes, and at one of the most respected and advanced solar-photovoltaic research institutions in the
world, the U.S. Department of Energy’s (“DOE”) National Renewable Energy Laboratory (“NREL”),
through a Cooperative Research and Development Agreement (“CRADA”).
Additionally, we work on specific advancements
to various aspects of SolarWindowTM manufacturing-related processes with NREL and Argonne National Laboratory. This ongoing
work was initiated after SolarWindow was awarded our first-ever DOE Grant for Advanced Manufacturing. Specifically, our work is
conducted through an Advanced Materials Manufacturing Cooperative Research and Development Agreement (“AMM CRADA”)
from the DOE Office of Energy Efficiency and Renewable Energy’s Advanced Manufacturing Office, and the Roll-to-Roll Advanced
Materials Manufacturing Consortium, led by Oak Ridge National Laboratory, partnering with Argonne National Laboratory, Lawrence
Berkeley National Laboratory, and NREL.
Beyond research and development, our commercial
strategy is to apply LiquidElectricityTM Coatings to existing third-party materials or product surfaces, to create electricity-generating
products which could become self-powered, or colloquially, “self-charging”. In furtherance of our strategy, over the
past year we have strengthened our management team, established the SolarWindow Innovation Group, and expanded our US operations
to Asia.
In October 2020, we announced the opening of
offices in Seoul, South Korea and the appointment of management and operations personnel in the US and South Korea to pursue commercial
partnerships for our Company so as to enable productization, manufacturing, and marketing of our technologies and products.
Our commercial development efforts in the US
and Asia include seeking technology, product licensing and joint venture arrangements with research institutions, commercial partners,
manufacturing and fabrication facilities, and organizations with established technical competencies, market reach, and distribution
networks in targeted industries.
Our proprietary electricity-generating coatings
and associated SolarWindowTM technologies are the subject of thirty (30) trademarks and over sixty (60) U.S. and international
patents, either granted or in-process. See Intellectual Property, below.
We believe that our efforts have already produced
a basis for these applications. Our planned productization and commercialization of SolarWindowTM technologies will
require significant further product development, fabrication, testing, and validation. In addition to our technology development
CRADA and AMM CRADA, and engagements with specialty contract groups, we anticipate the need for product development partnerships
with commercial partners in order to ascertain the viability of our technologies and products, currently under development.
Our SolarWindowTM technologies and products,
currently under development, use our proprietary chemistries and application processes in order to generate electricity on glass
and plastics. Our ongoing research and product development requires the commitment of significant resources to support the extensive
invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by our contract engineers,
scientists, and consultants.
We cannot accurately predict the amount of
funding or the time required to successfully commercialize SolarWindowTM products. The actual cost and time required to commercialize
our SolarWindowTM technology may vary significantly depending on, among other things, the results of our product development
efforts; the cost of developing, acquiring, or licensing various enabling technologies; changes in the focus and direction of our
business or product development plans; competitive and technological advances; the cost of patent filing, prosecuting, defending
and enforcing claims; demonstrating compliance with regulations and standards; and manufacturing, marketing and other costs that
may be associated with product fabrication. Because of this uncertainty, even if financing is available to us, we may secure insufficient
funding to effectuate our business and/or product development plans.
The Market Opportunity for our SolarWindowTM Coatings
Based on our market research, there are no
commercially marketed electricity-generating products available for sale in the United States which provide the functionality,
features, esthetics, and adaptability of SolarWindowTM Coatings.
Our markets include building window and glass
applications, referred to as “architectural flat glass” and “fabricated glass products.” Flat glass is
extensively used in the architecture industry in applications such as windows, partitions, and facades. One third-party glass
industry report, published in February 2020, by Grand View Research, Inc., projects that the global flat glass market is expected
to reach $202.9 billion by 2027, growing at a revenue-based compounded annual growth rate (“CAGR”) of 7.3%.
We are also targeting applications for our LiquidElectricityTM
Coatings in automotive, light and commercial trucks, recreational vehicles, marine, and aerospace and defense sectors, among others.
We believe that the rising demand for electric propulsion and autonomous piloting in these segments presents a timely opportunity
for our electricity-generating technologies.
Additionally, the agrivoltaics market for our
electricity-generating coatings includes the smart greenhouse market, valued at $1.37 billion in 2019 and projected to reach $3.23
billion by 2027, growing at a CAGR of 11.4% from 2020 to 2027. In addition to these smart greenhouses which monitor and control
the growth condition of plants and optimize the growing process of the plants, we believe that conventional greenhouse structures,
both new and existing, present commercial opportunities for the application of SolarWindow to these structures.
We believe that our addressable markets in
each of the forgoing segments are fractional, yet may present viable commercial opportunities.
Our Competitive Strengths
We believe that the following strengths of
our SolarWindowTM Coatings and technologies should enable us to compete successfully in the alternative and renewable energy
industries:
Our Business Strategy
As noted, our commercial development efforts
in the US and Asia include seeking technology, product licensing and joint venture arrangements with research institutions, commercial
partners, manufacturing and fabrication facilities, and organizations with established technical competencies, market reach, and
distribution networks in targeted industries. Key elements of our business strategy to implement the forgoing include:
Competition for SolarWindowTM Technology and Products
The solar PV industry is highly competitive
and such competition is increasing as the number of participants in the industry continues to grow. Although we are not aware of
other products utilizing technology substantially similar to SolarWindowTM technology, numerous solar cell technologies have
been developed, or are being developed, by a number of companies, from which products may be derived and ultimately compete with
the SolarWindowTM Products.
Such technologies include, but are not necessarily
limited to, the use of organic materials, advanced crystalline silicon thin film concepts, amorphous silicon, cadmium telluride,
copper-indium-gallium-selenide, titanium dioxide, and copper indium di-selenide, and others to generate electricity from sunlight.
Given sufficient time, investment and advances in manufacturing technologies, any of these competing technologies may achieve lower
manufacturing costs, superior performance, or greater market acceptance than SolarWindowTM Products, currently under development.
We face competition from many companies, major
universities and research institutions in the United States and abroad. Many of our competitors have substantially greater resources,
experience in conducting research, experience in obtaining regulatory approvals for their products, operating experience, research
and development and marketing capabilities name recognition and production capabilities. We will face competition from companies
marketing existing products or developing new products which may render our technologies (and hence future products) obsolete.
The descriptions of the products and technologies
being developed or marketed by our competitors listed below have been taken from publicly available documents or reports filed
by these companies:
These companies may have numerous competitive
advantages, including:
· Significantly greater name recognition;
§ established distribution networks;
§ more advanced technologies and product development;
§ processes that are operational and manufacturing prototype or final products;
If our competitors were to succeed in developing
products that are more effective in producing electrical energy at a lower cost than SolarWindowTM technology, some or all
of SolarWindowTM Products or our technology could be rendered obsolete and non-competitive. Accordingly, in addition to our
research and development efforts, we have undertaken a public relations, advertising, and market access outreach programs designed
to establish our “brand” name recognition early on in our corporate development; we intend to continue to develop and
market our brand name pending commercialization of products, if any, we may derive from our research and development efforts. We
believe our strategy ultimately will facilitate the marketing, distribution and public acceptance of any products we may derive
from our research and development efforts, if and when any applicable regulatory approval is received.
Our commercial success will depend on our ability
and the ability of our manufacturing partners, licensee or sub-licensees, if any, to compete effectively in product development
areas such as, but not limited to: safety, reliability, availability, price, marketing, distribution and patent position.
Our competitive position in the market will
also depend on our ability to attract and retain qualified personnel, to obtain patent protection, develop proprietary products
and processes, protect our intellectual property rights, and to secure sufficient capital resources required during the often-substantial
period between technology development and commercial sales.
An important factor will be the timing of market
introduction of any SolarWindowTM products we develop. Accordingly, the speed with which we can develop SolarWindowTM
products, complete safety approvals and ultimately supply commercial quantities of any products we develop to the market is important.
Proprietary Assets
Intellectual Property
The success of our business depends, in
part, on our ability to maintain and protect our proprietary technologies, information, processes, and know-how. We rely
primarily on patent, trademark, copyright and trade secrets laws in the U.S. and similar laws in other countries,
confidentiality agreements and procedures and other contractual arrangements to protect our technologies and products.
As of August 31, 2020, our proprietary
electricity-generating coatings and associated SolarWindowTM technologies are the subject of more than 30 trademarks and
over 60 U.S. and international patents, granted or in-process. Our patent filings include five (5) granted patents in the
United States, while all in-process patent filings include U.S. and foreign jurisdictions. In preparation for productization
and future commercial sales, our 30 trademarks have been established for the Company’s use in commerce. Our issued
patents are scheduled to expire between November, 2032 and March, 2033, and may or may not be basis for filing continuations.
We continually assess opportunities to seek patent protection for those aspects of our technology, designs, and methodologies
and processes that we believe may provide us with significant competitive advantages or additional commercial opportunities.
We believe that many elements of LiquidElectricityTM Coatings and SolarWindowTM processes, technologies and
products involve proprietary know-how, technology, or data that are not covered by patents or patent applications, including
but not limited to technical processes, equipment, design architecture, algorithms, and procedures. Accordingly, we rely on
trade secret protection and confidentiality agreements to safeguard our interests with respect to proprietary know-how that
is not patentable and processes for which patents are difficult to enforce.
Our commercial success will depend in part on
our ability to obtain and maintain patent and other proprietary protection for our technology, inventions and improvements; to
preserve the confidentiality of our trade secrets; to defend and enforce our proprietary rights, including any patents we now own
or that we may own in the future; and to operate without infringing on the valid and enforceable patents and other proprietary
rights of third parties.
Government Regulation
SolarWindowTM technology may be subject
to certain government regulations and standards. Our ability to remain viable will depend on favorable government decisions at
various stages of the technology’s development by various agencies. From time to time, legislation is introduced that could
significantly change the statutory or regulatory provisions governing our research and product development processes, as well as
approval of the manufacturing and marketing of any products derived from such research and development activities.
The production and marketing of SolarWindowTM
technology derived products would be subject to existing and future safety & health regulations and standards in the United
States and South Korea.
Current safety & health requirements and
standards for electrical products can include, but may not be limited to, Occupational Safety and Health Administration regulations,
National Electrical Code as approved as an American National Standard by the American National Standards Institute or ANSI/NFPA-70,
certification by Underwriters Laboratories and the Society of Automotive Engineers, and compliance with State, Federal, and local
building codes. These regulations are subject to change, and our ability to remain viable is contingent upon successfully satisfying
regulatory requirements as stipulated by these agencies and/or others as the development of SolarWindowTM technology evolves.
We may be additionally required to comply with similar regulations and standards in South Korea.
Employees and Consultants
The Company utilizes the services of full-time
employees as well as part-time employees and consultants on a contract basis. As of October 31, 2020, we had three (3) full-time
employees and seven (7) part-time employees and consultants. Our employees are located in the United States, Canada and South Korea.
Our full-time employees include Jatinder S.
Bhogal our President and Chief Executive Officer, John A. Conklin our Chief Technology Officer, and James Whitaker our Principal
R&D Scientist.
We have employer sponsored health and dental
plans available to form W-2 based employees. Additionally, from time-to-time, the Company grants stock options to employees on
a discretionary basis. None of our employees are covered by a collective bargaining agreement. We believe our relations
with our employees are good.
Other Information
Our website address is www.solarwindow.com. We
make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information accessible
through our website is not a part of this Annual Report on Form 10-K.
The public may also read and copy any materials
we file with the United States Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov
which site contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically
with the SEC. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the
document(s) in which the statement is included, and we do not assume or undertake any obligation to update any of those statements
or documents unless we are required to do so by law.
The Company’s executive office
is located at 430 Park Avenue, Suite 702, New York, NY 10022. The Company’s telephone number is (800) 213-0689.
Stockholder Communications
Stockholders who wish to communicate with the
Board may do so by addressing their correspondence to the Board at SolarWindow Technologies, Inc., Attention: Jatinder S. Bhogal
or Justin Frere, 430 Park Avenue, Suite 702, New York, NY 10022. The Board will review and respond to all correspondence received,
as appropriate.
Item1A. Risk Factors
RISK FACTORS
The following risk factors and the forward-looking statements
elsewhere in this Report on Form 10-K should be read carefully in connection with evaluating the business of the Company. A
wide range of events and circumstances could materially affect our overall performance and our results of operations, and therefore,
an investment in us is subject to risks and uncertainties. In addition to the important factors affecting specific business operations
and the financial results of those operations identified elsewhere in this Annual Report on Form 10-K, the following important
factors, among others, could adversely affect our operations. While each risk is described separately below, some of these risks
are interrelated and it is possible that certain risks could trigger the applicability of other risks described below. Also, the
risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties not presently known
to us, or that are currently deemed immaterial, could also potentially impair our overall performance, the performance of particular
businesses and our results of operations. These risk factors may be amended, supplemented or superseded from time to time in filings
and reports that we file with the SEC in the future.
Risks Related To Our Business
We have experienced significant losses,
have not generated any revenues and expect losses to continue for the foreseeable future.
We have not generated any revenue since inception
and do not expect to generate any substantial amounts of revenue for the foreseeable future. We had a net loss of $7,353,062 and
$6,887,678 for our fiscal years ended August 31, 2020 and 2019.
The sale by our stockholders of restricted
shares, either pursuant to a resale prospectus or Rule 144, may adversely affect our ability to raise the funds we will require
to effectuate our business plan.
As of August 31, 2020, we had 52,959,323 shares
issued and outstanding, of which 31,306,805 are deemed “restricted” or “control” securities within the
meaning of Rule 144, as promulgated under the Securities Act (“Rule 144”). The possibility that substantial
amounts of our common stock may be sold into the public market, either under Rule 144, or pursuant to a resale registration statement,
may adversely affect prevailing market prices for the common stock and could impair our ability to raise capital in the future
through the sale of equity securities because of the perception that future stock sales could decrease our stock price and because
of the availability of resale shares to those interested in investing in our common stock.
We will require additional financing
in the future to expand operations into advanced stages of product development and fabrication, and failure to obtain such financing
would have a material adverse effect on our business, operating results, financial condition and prospects.
We are currently in the advanced stages of
our research and early stages of product development and have come to the point where larger, faster, and more precise equipment
is necessary for development to continue and to be able to come to market with a commercially viable product. On November 26, 2018,
the Company completed a self-directed offering of equity securities resulting in proceeds of $19,800,000. Based on management’s
assessment, the Company has sufficient cash to meet its funding requirements over the next twelve months following the issuance
of this Annual Report, to meet product development and fabrication goals.
We have experienced and continue to experience
negative cash flows from operations. We expect that we will need to raise substantial additional capital to accomplish our business
plan in future years. We expect to seek additional funding through financial or strategic investors. If adequate funds are not
available on reasonable terms, or at all, it would result in a material adverse effect our 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 SolarWindowTM 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 us than might otherwise be available.
If we raise additional funds by issuing equity
or debt securities, further dilution to stockholders may result and new investors could have rights superior to existing stockholders.
Even if financing is available to us,
because we cannot currently estimate the amount of funds or time required to commercialize our technologies, we may secure less
funding than is actually required to effectuate our business plan.
We are currently in the advanced stages of
our research and early stages of product development. We have come to the point where larger, faster, and more precise equipment
is necessary for all facets of technology and product development to continue and to be able to come to market with a commercially
viable product. We, however, cannot accurately predict the amount of funding or the time required to successfully commercialize
the SolarWindowTM technology. The actual cost and time required to commercialize these technologies may vary significantly
depending on, among other things, the results of our research and product development efforts; the cost of developing, acquiring,
or licensing various enabling technologies, changes in the focus and direction of our research and product development programs;
competitive and technological advances; the cost of filing, prosecuting, defending and enforcing claims with respect to patents;
the regulatory approval process; process manufacturing; marketing and other costs associated with commercialization of these technologies.
Because of this uncertainty, even if financing is available to us, we may secure insufficient funding to effectuate our business
plan.
Due to the fact that all but one of our
five directors conduct outside business activities and are not our employees, attention and efforts will not be focused solely
on our business activities which may hinder our achieving our business objectives.
Currently we have five directors, only one
of whom is an employee. Mr. Jatinder S. Bhogal, our President and Chief Executive Officer, does and will continue to provide his
full-time efforts to our business activities. While our four (4) other Directors intend to devote as much time as necessary to
the success and development of SolarWindowTM technology, currently each has other business interests or employment obligations
requiring their time and attention. While each has generally agreed to provide such time and attention to our business activities
as may be reasonably required, and have done so to date, there can be no assurance that their priorities will not shift in the
future and that the amount of time that each devotes to our activities will be sufficient for us to meet our business objectives.
In the event that their outside interests begin to take precedence over their positions in with the Company, our business will
suffer and may adversely impact our goal of achieving profitability through the commercialization of SolarWindow. In this event,
if effective corrective action is not taken, investors could lose all or part of their investment.
The success of our research and development
activities is uncertain. If such efforts are not successful, we will be unable to generate revenues from our operations and we
may have to cease doing business.
Commercialization of the SolarWindowTM
technology will require significant further research, development and testing as we must ascertain whether the SolarWindowTM
technology can form the basis for a commercially viable technology or product. If our research and development fails to prove the
commercial viability of the SolarWindowTM technology, we may need to abandon our business model and/or cease doing business,
in which case our shares may have no value and you may lose your investment. We anticipate remaining engaged in technology and
initial product development for (a) specific product(s) through at least December 2021.
The development of the SolarWindowTM
technology is subject to the risks of failure inherent to the development of any novel technology.
Ultimately, the development and commercialization
of the SolarWindowTM technology is subject to a number of risks that are particular to the development and commercialization
of any novel technology. These risks include, but are not limited to, the following:
If we ultimately do not obtain the necessary
regulatory and safe operation approvals for the commercialization of the SolarWindowTM technology, we will not achieve profitable
operations and your investment may be lost.
In order to commercialize the SolarWindowTM
technology, we may need to obtain regulatory approval from various local, state, federal or international agencies; or approval
from global safety certifying organizations that will certify safe operation of our products. At this time, we do not have a product
to be submitted for regulatory or safe operating approval. The process for obtaining these approvals may be time consuming and
costly, and there is no guaranty that we will be able to obtain such approvals. The failure to obtain any necessary approvals could
delay or prevent us from achieving revenue or profitability, which could result in the partial or total loss of your investment.
Our ability to operate profitably is
directly related to our ability to develop, protect and perfect rights in and to our proprietary technology.
We rely on a combination of trademark, trade
secret, nondisclosure, know-how, copyright and patent law to protect our SolarWindowTM technology, which may afford only limited
protection.
We may initiate claims or litigation against
third parties for infringement of our proprietary rights or to establish the validity, scope or enforceability of our proprietary
rights. Any such claims could be time consuming, result in costly litigation, or force us to enter into royalty or license agreements
rather than dispute the merits of such claims, requiring us to pay royalties and/or license fees to third parties. There is always
a risk that patents, if issued, may be subsequently invalidated, either in whole or in part and this could diminish or extinguish
protection for any technology we may license or may adversely affect our ability to fully commercialize our technologies.
We generally require our employees, consultants,
advisors and collaborators to execute appropriate agreements with us, regarding the confidential information developed or made
known to such persons during the course of their engagement by us. These agreements provide that any proprietary technologies developed
during such engagement are owned by us and that confidential information pertaining to such technologies will be kept confidential
and not disclosed to third parties except in specific circumstances. These agreements also provide for the assignment to us by
any such person of any patents issued with respect to any such technologies. If these provisions are breached, we may not be able
to fully perfect our rights to the technologies in question, and in some instances, we may not have an appropriate remedy available
for the damages that we may incur as a result of any such breach.
Our proprietary rights may not adequately
protect our technologies and products.
Our commercial success will depend, in part,
on our ability to obtain patents and/or maintain adequate protection for our technologies and products in the United States and
other countries. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that
our proprietary technologies and products are covered by valid and enforceable patents or are effectively maintained as trade secrets.
We intend to apply for additional patents for
our SolarWindowTM technologies, applications, processes, and products, as we deem appropriate. We may, however, fail to apply
for patents on important technologies, products, or processes in a timely manner, if at all. Our existing patents and any future
patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing
products, processes, or technologies. In addition, the patent positions of alternative energy technology companies are highly uncertain
and involve complex legal and factual questions for which important legal principles and regulations or policies remain unresolved.
As a result, the validity and enforceability of our patents cannot be predicted with certainty. In addition, we cannot guarantee
that:
· we were the first to file patent applications for these inventions;
· any of our pending patent applications will result in issued patents;
· any of our patents will be valid or enforceable;
The actual protection afforded by a patent
varies on a product-by-product basis, from country to country and depends on many factors, including the type of patent, the scope
of its coverage, the availability of regulatory related extensions, the availability of legal remedies in a particular country
and the validity and enforceability of the patents. Our ability to maintain and solidify our proprietary position for our products
will depend on our success in obtaining effective claims and enforcing those claims once granted. Our issued patents and those
that may be issued in the future, or those licensed to us, may be challenged, invalidated, unenforceable or circumvented, and the
rights granted under any issued patents may not provide us with proprietary protection or competitive advantages against competitors
with similar products. We also rely on trade secrets to protect some of our technology, especially where it is believed that patent
protection is inappropriate or unobtainable. However, trade secrets are difficult to maintain. While we use reasonable efforts
to protect our trade secrets, our employees, consultants, contractors or scientific and other advisors may unintentionally or willfully
disclose our proprietary information to competitors. Enforcement of claims that a third party has illegally obtained and is using
trade secrets is expensive, time consuming and uncertain. In addition, non-U.S. courts are sometimes less willing than U.S. courts
to protect trade secrets. If our competitors independently develop equivalent knowledge, methods and know-how, we may not be able
to assert our trade secrets against them and our business could be harmed.
We may not be able to protect our intellectual
property rights throughout the world.
Filing, prosecuting and defending patents on
all of our products in every jurisdiction would be prohibitively expensive. Competitors may use our technologies in jurisdictions
where we have not obtained patent protection to develop their own products. These products may compete with our products and may
not be covered by any patent claims or other intellectual property rights.
The laws of some non-U.S. countries do not
protect intellectual property rights to the same extent as the laws of the United States, and many companies have encountered significant
problems in protecting and defending such rights in foreign jurisdictions. The legal systems of certain countries, particularly
certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make
it difficult for us to stop the infringement of our patents. Proceedings to enforce our patent rights in foreign jurisdictions
could result in substantial cost and divert our efforts and attention from other aspects of our business.
If we fail to protect our intellectual
property rights, our competitors may take advantage of our ideas and compete directly against us.
Our success will depend, to a significant degree,
on our ability to secure and protect intellectual property rights and enforce patent and trademark protections relating to our
technology. While we believe that the protection of patents and trademarks is important to our business (and as a result we have
over 90 U.S. and International patent, and trademark filings), we also rely on a combination of copyright, trade secret, nondisclosure
and confidentiality agreements, know-how and continuing technological innovation to maintain our competitive position. From time
to time, litigation may be advisable to protect our intellectual property position. However, these legal means afford only limited
protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Any litigation in
this regard could be costly, and it is possible that we will not have sufficient resources to fully pursue litigation or to protect
our intellectual property rights. This could result in the rejection or invalidation of our existing and future patents. Any adverse
outcome in litigation relating to the validity of our patents, or any failure to pursue litigation or otherwise to protect our
patent position, could materially harm our business and financial condition. In addition, confidentiality agreements with our employees,
consultants, customers, and key vendors may not prevent the unauthorized disclosure or use of our technology. It is possible that
these agreements will be breached or that they will not be enforceable in every instance, and that we will not have adequate remedies
for any such breach. Enforcement of these agreements may be costly and time consuming. Furthermore, the laws of foreign countries
may not protect our intellectual property rights to the same extent as the laws of the United States.
We may be accused of infringing the intellectual
property rights of others.
We cannot guarantee that we will not become
the subject of infringement claims or legal proceedings by third parties with respect to our current or future technology developments.
Any such claims could be time consuming, result in costly litigation and could ultimately lead to a determination that the SolarWindowTM
technology, or any of its derivatives, infringe on a third party's patent rights.
If we fail to obtain additional licenses
in the future required to maintain our rights to market products developed, if any, we may need to curtail or cease operations.
We may not retain all rights to developments,
inventions, patents and other proprietary information resulting from any collaborative arrangements, whether in effect as of the
date hereof or which may be entered into at some future time with third parties. As a result, we may be required to license such
developments, inventions, patents or other proprietary information from such third parties, possibly at significant cost to us.
Our failure to obtain and maintain any such licenses could have a material adverse effect on our business, financial condition
and results of our operations. In particular, the failure to obtain a license could prevent us from using or commercializing our
technology.
Compliance with environmental regulations
or dealing with harmful or hazardous materials involved in our research and development, may require us to divert our limited capital
resources.
Our research and product development programs
involve the handling of chemicals. These chemicals have the potential to be harmful or hazardous to human health and/or the environment.
Accordingly, we may become subject to federal, state and local laws and regulations governing the use, handling, storage and disposal
of dangerous and hazardous materials. If violations of environmental, and/or safety & health laws or standards occur, we could
be held liable for damages, penalties and costs of remedial actions. These expenses or this liability could have a significant
negative impact on our business, financial condition and results of operations. We may unintentionally violate environmental, and/or
safety & health laws or standards in the future as a result of human error, equipment failure or other causes. Environmental,
and safety & health laws and standards could become more stringent over time, imposing greater compliance costs and increasing
risks and penalties associated with violations. We may be subject to potentially conflicting and changing regulatory agendas of
political, business, environmental, or safety & health groups. Changes to or restrictions on permitting requirements or processes,
harmful or hazardous material storage, or chemical handling might require an unplanned capital investment or relocation of our
research or product development programs. Failure to comply with new or existing laws or regulations, or failing to plan for possible
changes in these laws could harm our business, financial condition and results of operations. Currently, we do not have any insurance
coverage with respect to damages or liabilities we may incur as a result of these activities.
In seeking to acquire or develop technologies,
we are operating in highly competitive markets and our competitors have several competitive advantages over us.
Our commercial success will depend on our ability
to compete effectively in product development areas such as, but not limited to, building integration, safety, efficacy, ease of
use, customer compliance, price, marketing and distribution. Our competitors may succeed in developing products that are more effective
than any products derived from our research and development efforts or that would render such products obsolete and non-competitive.
The alternative and renewable energy industry is characterized by intense competition, rapid product development and technological
change. Most of the competition that we encounter is expected to come from companies, research institutions and universities who
are researching and developing technologies and products similar to, or are competitive with, any technology we may develop.
These companies may have several competitive
advantages, including:
· significantly greater name recognition;
· established relations with customers;
· established distribution networks;
· more advanced technologies and product development;
· has the ability to endure potentially prolonged patent litigation.
As a result, we may not be able to compete
effectively against these companies or their products.
Any products developed from our SolarWindowTM
technology will face competition from other companies producing solar power and/or energy harvesting or storage products.
The solar power market is intensely competitive
and rapidly evolving.
Some of our competitors are better capitalized,
have more employees, and have established market positions than SolarWindow. If we fail to attract and retain customers and establish
a successful distribution network for our solar products, we may be unable to achieve adequate sales and market share. There are
a number of major multi-national corporations that produce solar power and alternative energy products, which may be competitive
with those that we are seeking to develop, including Heliatek, Dyetec Solar, Dysol, Solarmer Energy, BP Solar, Kyocera Solar, Sharp,
GE, Mitsubishi, Solar World AG, Sanyo, Ubiquitous Energy, Oxford PV, ONYX Solar, Next Energy Technologies, and others. We also
expect that future competition will include new entrants to the solar power market offering new technological solutions. Further,
many of our competitors are developing and are currently producing products based on new solar power and alternative energy technologies
that may have a cost basis similar to, or lower than, our SolarWindowTM Product projected costs.
Technological changes could render our
products uncompetitive or obsolete, which could prevent us from achieving market share and sales.
Our failure to refine or advance our technologies,
and to develop and introduce new products could cause our products to become uncompetitive or obsolete, which could prevent us
from achieving market share and sales. The alternative and renewable energy industry is rapidly evolving and highly competitive.
We will need to invest significant financial resources in additional technology research & development, and product development
to keep pace with technological advances in the industry and to compete in the future; we may be unable to secure such financing.
We believe that a variety of competing solar and alternative or renewable energy technologies may be in development by other companies
that could result in lower manufacturing costs and/or higher product performance than those expected for our products. Our development
efforts may be hindered or rendered obsolete by the technological advances of others, and other technologies may prove more advantageous
for the commercialization of transparent electricity-generating products.