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, 2021
☐ 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)
(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
Securities registered pursuant to Section 12(g) of the Act: None
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, 2021 was $260,299,000.
As of November 2, 2021, 53,198,399 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, 2021 and 2020
PAGE
PART I
Item 1. Business 1
Item 1A. Risk Factors 8
Item 1B. Unresolved Staff Comments 27
Item 2. Properties 27
Item 3. Legal Proceedings 27
PART II
Item 7A. Qualitative and Quantitative Disclosures About Market Risk 33
Item 8. Financial Statements 33
Item 9A. Controls and Procedures 33
Item 9B. Other Information 34
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 34
Item 11. Executive Compensation 39
Item 14. Principal Accounting Fees and Services 47
PART IV
Item 15. Exhibits, Financial Statement Schedules 49
SIGNATURES 54
INDEX TO FINANCIAL STATEMENTS F-1 to F-20
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 Item 1. “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,”
“our,” and “SolarWindow” refer to SolarWindow Technologies, Inc, and as applicable, its wholly-owned technologies.
Item 1. Business
We are a pre-revenue company developing proprietary
transparent electricity-generating coatings and methods for their application to various materials which we refer to as our “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 coating materials and their related application.
1
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 LiquidElectricityTM Coatings continued to produce power.
LiquidElectricityTM Coatings on glass panes have
also been subjected to more than 200 freeze/thaw cycles, yielding favorable performance. Our 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
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 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 July 2020 demonstration, LiquidElectricityTM
Coatings applied to otherwise ordinary glass panes resulted in the fabrication of a 9 square-foot window 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. In February
2021, we achieved a 500% increase in prototyping and testing speed, 12-fold increase in testing capacity and output, and 20-times reduction
in material costs using a newly developed high-out platform for lab-scale prototyping. In March 2021, using industry-standard single-cell
patterning for performance testing, we successfully doubled our power conversion efficiency to 14.72% (+/- 0.29%), according to independent
tests conducted by the Device Performance Measurement Laboratory (National Renewable Energy Laboratory).
Currently, our LiquidElectricityTM Coatings 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 manufacturing-related processes with NREL and Argonne National Laboratory. This ongoing work was initiated after we
were awarded a DOE Grant for Advanced Manufacturing. Specifically, our work was 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. Work under the AMM CRADA was
completed in April 2021.
2
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 an office
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 technologies are the subject of thirty-one (31) trademarks and seventy-one (71) 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 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 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 products. The actual cost and time required to commercialize our 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 LiquidElectricityTM 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 LiquidElectricityTM 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.
3
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 LiquidElectricityTM
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 opportunities for intellectual property in-licensing, out-licensing, cross-licensing, and acquisition. We
also seek 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 Our 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 our 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 our products.
4
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 our products, currently under development. Among the companies purporting to be developing such technologies,
are ONYX Solar, Next Energy Technologies, Solarmer Energy, Ubiquitous Energy, Heliatek, Sunew and ARMOR (previously OPVIOUS, GmbH).
We face competition from many companies, major universities
and research institutions in the United States and abroad. Many of these companies, universities and research institutions 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.
These companies, universities and research institutions 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:
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 products utilizing our LiquidElectricityTM Coatings. Accordingly, the speed with which we can develop products, complete safety
approvals and ultimately supply commercial quantities of any products we develop to the market is important.
5
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 November 2, 2021, our proprietary electricity-generating
coatings and associated technologies are the subject of 31 trademarks and 71 U.S. and international patents, granted or in-process, including
ten (10) granted patents in the United States, eight (8) granted patents in non-U.S. jurisdictions, and sixteen (16) and thirty-seven
(37) in-process patent filings in the U.S. and foreign jurisdictions, respectively. In preparation for productization and future commercial
sales, our 31 trademarks have been established for the Company’s use in commerce. Our issued patents are scheduled to expire between
January, 2030 and March, 2037. These dates are subject to change depending on the Company’s current and future patent application
filings and the Company’s discretion to maintain its various intellectual property assets in accordance with its corporate interests
and goals. 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 related 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
Our 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 our 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 our technology evolves. We may be additionally required to comply with similar regulations
and standards in South Korea.
6
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 the date of this prospectus, the Company had the following personnel:
North America Operations
Four (4) full-time employees, two (2) full-time consultants
and three (3) part-time consultants all located in the United States except for our CEO who is located in Canada
South Korea Operations
Three (3) full-time employees, two (2) full-time consultants
and three (3) part-time consultants.
Our full-time consultants include Jatinder S. Bhogal
our Chief Executive Officer, and John Rhee, our President, Director and President and CEO of SolarWindow Asia Co., Ltd., our indirectly
wholly-owned subsidiary.
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 prospectus.
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.
Our executive office is located at 9375 E Shea Blvd.,
Suite 107-B, Scottsdale AZ 85260. Our telephone number is (800) 213-0689; our email is info@solarwindow.com. Our website is www.solarwindow.com.
Information contained on our web site (or any other website) does not constitute part of this prospectus.
Our operations are conducted primarily from our offices
in the Republic of South Korea, located at JA-1022HO 10F, 338, Gwanggyojungang-ro, Suji-gu, Yongin-si, Gyeonggi-do, Republic of Korea.
Our research and development activities are conducted
at the U.S. Department of Energy’s National Renewable Energy Laboratories in Golden, Colorado pursuant to a Cooperative Research
and Development Agreement.
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,
9375 E Shea Blvd., Suite 107-B, Scottsdale AZ 85260. The Board will review and respond to all correspondence received, as appropriate.
7
Item 1A. Risk Factors
Risk Factors
The following risk factors and the forward-looking
statements elsewhere in this prospectus 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 prospectus, 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 the Covid-19 Pandemic
A novel strain of coronavirus, the COVID-19
virus, may adversely affect our business operations and financial condition.
In December 2019, an outbreak of the COVID-19 virus
was reported in Wuhan, China. On March 11, 2020, the World Health Organization declared the COVID-19 virus a global pandemic and on March
13, 2020, President Donald J. Trump declared the virus a national emergency in the United States. This highly contagious disease has spread
to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers,
disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. It has caused a disruption of the
normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either
quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis. The pandemic may
adversely affect our operations, our employees and our employee productivity. It may also impact the ability of our subcontractors, partners,
and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance.
Our employees are working remotely and using various
technologies to perform their functions. In reaction to the spread of COVID-19 in the United States, many businesses have instituted social
distancing policies, including the closure of offices and worksites and deferring planned business activity. The disruption and volatility
in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital. Both the health and
economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons
that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, we may experience a material
adverse effect on our business operations, revenues and financial condition, and development; however, its ultimate impact is highly uncertain
and subject to change.
Risks Related to Our Financial Condition and Need
for Additional Financing
We have not generated any revenues and have
experienced significant losses to date and we expect to continue incur losses for the foreseeable future. Consequently, we will require
additional financing in the future to maintain and 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.
8
We have experienced and continue to experience negative
cash flows from operations. 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 $7,907,902 and $7,353,062 for our fiscal years ended August 31, 2021 and 2020.
As of August 31, 2021, we had cash and short-term investments of $12,127,456 and working capital of $12,148,285. Based on management’s
assessment, the Company has sufficient cash to meet its current funding requirements over the next twelve months following the date of
this annual report, to meet our projected product development and fabrication goals during this period. However, our current cash reserves
may not be sufficient to permit us to maintain or expand our operations beyond this period.
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. We expect that we will need to raise substantial additional
capital to accomplish our manufacturing and product sales objectivesin future years.
We anticipate seeking 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 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.
As noted above, 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 our 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.
In order to obtain the required financing, we
may enter in transactions that may dilute the ownership interest of our current stockholders.
In order to raise sufficient capital to meet its financial
obligations, we may enter into financing transactions that would result in dilution of the ownership interests of our current stockholders
or which may involve the sale of our securities at prices that are at a discount to current market price of our stock as reported on the
OTCPINK. Such sales will be made at prices determined by our Board based on factors deemed appropriate at the time; accordingly, such
sales by us could be made at prices less than the price of the shares of our common stock purchased, in which case, investors could experience
dilution of their investment.
9
Adverse conditions in the alternative energy
or the global economy more generally could have adverse effects on our results of operations and consequently the price of our common
stock.
Our business is exposed to significant financial risks,
most of which are beyond our control, related to interest rates, State & Federal subsidies, the modified accelerated cost recovery
system, taxes, and general economic conditions both domestic and internationally. These risks may affect our ability to effect (i) borrowings
or to raise capital through the offer and sale of equity-based securities and (ii) the execution of our business plan and product commercialization
efforts by thwarting consumer demand for our products, and thereby adversely impacting our potential revenue and profitability.
An increase in raw material prices could have
negative consequences on our long-term profitability.
We face exposure to fluctuations in energy, raw materials,
chemicals, and glass and plastic film prices. If we are not able to hedge, compensate or pass on our increased costs through a supply-chain
or to customers, this could have an adverse impact on our financial results and stability, and deployment of our products.
Risks Related to Our Technology, Products and Operations
The development of our technology is subject
to the risks of failure inherent to the development of any novel technology.
Ultimately, the development and commercialization
of our 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:
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 our technology will require significant
further research, development and testing as we must ascertain whether our technology can form the basis for a commercially viable technology
or product. If our research and development fails to prove the commercial viability of our 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 product development for (a) specific product(s) through at least December 31, 2022.
If we ultimately do not obtain the necessary
regulatory and safe operation approvals for the commercialization of our technology, we will not achieve profitable operations and your
investment may be lost.
In order to commercialize our 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.
10
We are operating in highly fragmented and competitive
market 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, research institutions and universities
may have several competitive advantages over us, including:
• Significantly greater name recognition;
• established distribution networks;
• more advanced technologies and product development;
• processes that are operational and manufacturing prototype or final products;
As a result, we may not be able to compete effectively
against these companies or their products.
Any products developed from our 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.
There are a number of companies that produce solar power and alternative energy products, which may be competitive with those that we
are seeking to develop. Additionally, some of our competitors may be developing or currently producing products based on new solar power
and alternative energy technologies that may have a cost basis similar to, or lower than, our projected product costs.
Accordingly, If we fail to attract and retain
customers and establish a successful distribution network for our products, we may be unable to achieve adequate sales and market
share; or, if our competitors’ products, services or technologies become more accepted
than ours, or if they are successful in bringing their products or services to market earlier than us our revenues could be
adversely affected.
As noted above, some of our current and potential competitors have
significantly greater resources and better competitive positions in certain markets than we do. These factors may allow our
competitors to respond more effectively than us to new or emerging technologies and changes in market requirements. Our competitors
may develop products, features, or services that are similar to ours or that achieve greater market acceptance, may undertake more
far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. See
“Our Business.”
11
Mergers of, or other strategic
transactions by, our competitors could weaken our competitive position or reduce our revenue.
If one or more of our
competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect
our ability to compete effectively. A potential result of such expansion is that certain of our current or potential competitors may
be acquired by third parties with greater available resources and the ability to further invest in product improvements and initiate
or withstand substantial price competition. Our competitors also may establish or strengthen cooperative relationships with our
current or future value-added resellers, third-party consulting firms or other parties with whom we have relationships, thereby
limiting our ability to promote our products. Disruptions in our business caused by these events could reduce our revenue.
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.
To the extent we are able to develop and commercialize
products, if such products do not gain market acceptance, we may not achieve sales and market share.
The development of a successful market for our products
may be adversely affected by a number of factors, some of which are beyond our control, including:
· customer, architectural and engineering acceptance of our products;
If our products fail to gain market acceptance, we
will be unable to achieve sales, market share, or profitability.
If organic solar photovoltaic light energy harvesting
technologies are not suitable for widespread adoption or sufficient demand for such products does not develop or takes longer to develop
than we anticipate, we may not be able to profitably exploit our technology.
The market for OPV solar-energy related products is
emerging and rapidly evolving, and the market for energy harvesting products is generally unproven and not well established. The success
of products for these markets is uncertain.
12
If our OPV solar power or light energy harvesting
technologies prove unsuitable for widespread commercial deployment or if demand for such power products fails to develop sufficiently,
we would be unable to achieve sales and market share. In addition, demand for such products in the particular markets and geographic regions
we target may not develop or may develop more slowly than we anticipate. Many factors will influence the widespread adoption of organic
solar photovoltaic light energy capture and conversion products, including:
· fluctuations in the prices of fossil fuels or their derivatives;
Our growth and success depend on our ability
to develop new products and services and adapt to market and customer needs.
The sectors in which we operate experience rapid and
significant changes due to the introduction of innovative technologies. Introducing new technology products and innovative services, which
we must do on an ongoing basis to meet customers' needs, requires a significant commitment to research and development, which may not
result in success. The company is pre-revenue and may suffer if it invests in technologies that do not function as expected or are not
accepted in the marketplace; its products, systems or service offers are not brought to market in a timely manner; or products become
obsolete or are not responsive to our customers' needs or requirements.
Our business model and strategy are based on
growth through in-licensing, out-licensing, cross-licensing, acquisitions, joint ventures and mergers that may be difficult to execute.
Our business model and strategy are based on growth
through in-licensing, out-licensing, cross-licensing, acquisitions, joint ventures and mergers. External growth transactions are inherently
risky because of the difficulties that may arise in integrating people, operations, technologies and products, and the related acquisition,
administrative and other costs.
As noted above, we plan to make acquisitions,
which could require significant management attention, disrupt our business, result in dilution to our stockholders, and adversely affect
our financial results.
As part of our business strategy, we intend to make
acquisitions to add specialized employees, complementary companies, products, or technologies. However, we have not made any acquisitions
to date, and, as a result, our ability to acquire and integrate larger or more significant companies, products, or technologies in a successful
manner is unproven. In the future, we may not be able to find suitable acquisition candidates, and we may not be able to complete
acquisitions on favorable terms, if at all. Any acquisitions that we consummate may not achieve our goals, and could be viewed negatively
by investors. In addition, if we fail to successfully integrate any acquisitions, or the technologies associated with such acquisitions,
into our company, the revenue and operating results of the combined company could be adversely affected. Any integration process may require
significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize
the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting
charges. We may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, any of which could adversely
affect our financial results. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our
stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions
that would impede our ability to manage our operations.
13
We may be the subject of product liability claims
and other adverse effects due to defective products, design faults or harm caused to persons and property.
Our products may not operate properly or could contain
design or fabrication faults or defects, which could give rise to disputes in respect of its performance, degradation and reliability
giving rise to liability. Product liability related to defective products could lead to a loss of revenue, claims under warranty, and
legal proceedings. Such disputes could result in a fall-off in demand or harm our reputation for product performance, safety, and/or quality.
Our products will be subject to environmental,
occupational safety & health regulations, including but not limited to Underwriter Laboratory (UL) Certification, European Conformity
(CE) Certification, electrical codes, and other state and federal, European Union (EU), and other Country regulations.
Our products will be subject to extensive and increasingly
stringent environmental, occupational safety and health regulations and certifications, including but not limited to, Underwriter Laboratory
(UL) Certification, electrical codes, and other state and federal, EU laws, regulations, and standards (“Laws & Regulations”).
There can be no guarantee that we will not be required to pay significant fines or compensation as a result of past, current or future
breaches of Laws & Regulations. This exposure exists even if we are not responsible for the breaches, in cases where they were committed
in the past by companies or businesses that were not part of ours that may be exposed to the risk of claims for breaches of these Laws
& Regulations. Such claims could adversely affect our financial position and reputation. If we fail to conduct our business in full
compliance with the applicable Laws & Regulations, the judicial or regulatory authorities could require us to conduct investigations
and/or implement costly curative measures.
We lack sales and marketing experience and will
likely rely on third party marketers.
We have limited experience in sales, marketing or
distribution of photovoltaic and energy capture and conversion and generating products. We expect to market and sell or otherwise commercialize
our technology (or any of its derivatives) through distribution and supply-chain channels, co-marketing, co-promotion or licensing arrangements
with third parties. Therefore, any revenues received by us will be dependent on the efforts of third parties. If any such parties breach
or terminate their agreements with us or otherwise fail to conduct marketing activities successfully and in a timely manner, the commercialization
of our technology (or any of its derivatives) would be delayed or terminated, which would adversely affect our ability to generate revenues