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, 2023
☐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 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 has filed a report on and
attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fi rm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
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, 2023, was $25,648,000.
As of November 10, 2023, 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, 2023 and 2022
PART I PAGE
Item 1. Business 1
Item 1A. Risk Factors 7
Item1B. Unresolved Staff Comments 25
Item 2. Properties 25
Item 3. Legal Proceedings 25
PART II
Item 7A. Qualitative and Quantitative Disclosures About Market Risk 30
Item 8. Financial Statements 31
Item 9A. Controls and Procedures 31
Item 9B. Other Information 32
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 33
Item 11. Executive Compensation 37
Item 14. Principal Accounting Fees and Services 42
PART IV
Item 15. Exhibits, Financial Statement Schedules 44
SIGNATURES 49
INDEX TO FINANCIAL STATEMENTS F-1 to F-18
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 application to various materials which we refer to as “LiquidElectricity®
Coatings”. Our LiquidElectricity® 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 LiquidElectricity® Coatings to rigid glass, and flexible
glass and plastic surfaces where they transform otherwise ordinary surfaces into organic photovoltaic devices, commonly known as solar
cells, or solar modules.
Our LiquidElectricity® is a framework which utilizes
chemistry for different ultra-thin layers applied to a substrate. These layers include hole transport layers, active layers, electron
transport layers, and conductive contact points for transmission of electricity. We have developed a specialty expertise in each layer
of our LiquidElectricity® to optimize for power, optical clarity, manufacturability, stability, and other qualities. The flexibility
engineered into our LiquidElectricity® framework allows us to target a variety of potential applications spanning multiple industries,
including architectural, automotive, agrivoltaic (agricultural greenhouse), aerospace, commercial transportation and marine.
Our LiquidElectricity® Coatings are under development
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”). SolarWindow also has support from commercial contract firms who provide expertise in chemistry,
coatings processes, and manufacturing.
Our commercial development efforts 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.
Among our near-term product iterations, is the electrification
of glass surfaces. LiquidElectricity® , when applied using our proprietary processes to glass, could be fabricated into a window product
to produce electricity-generating windows for potential use in new construction and retrofit applications in commercial buildings. We
also envision the application of LiquidElectricity® Coatings to existing third-party materials or product surfaces, to create electricity-generating
products which could become self-powered, or colloquially, “self-charging” products.
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 aesthetics, optimizing power generation, developing
productization processes, simplifying manufacturability, and lowering costs of coating materials and their related application.
We first coated rigid flat glass with our LiquidElectricity®
Coatings to generate electricity. Numerous technological advancements have enabled us to fabricate panes of flat glass layered with LiquidElectricity®
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, LiquidElectricity®
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 LiquidElectricity® 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 LiquidElectricity® Coatings continued to produce power.
LiquidElectricity® 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 LiquidElectricity® 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.
In 2022, SolarWindow successfully applied LiquidElectricity®
Coatings using fully-solution processable methodology to create a non-transparent organic photovoltaic device. Fully-solution processable
organic photovoltaic methodology offers the potential for industry standard chemical deposition for more capital and time efficient manufacturing
and production.
In 2023, LiquidElectricity® Coatings were successfully
applied using fully-solution processable methodology to create semi-transparent solar modules. LiquidElectricity® applied with this
methodology could benefit the agriculture market through utilizing crop shelter structures which offer protection in adverse climate conditions
by generating electricity on greenhouse windows and canopies while simultaneously optimizing light transmission for maximum crop yield.
Our planned productization and commercialization of
SolarWindow® 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, as well as additional financing, which may not be readily available, 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 scientists, engineers, 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 LiquidElectricity® Coatings
SolarWindow recognizes demand for global energy requirements,
including reducing energy costs while using environmentally friendly next-generation renewables, and actively seeks to advance our novel
solar photovoltaic solutions in global adoption of new renewable technologies.
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 LiquidElectricity® 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 2022, by Grandview Research, Inc.,
projects that the global flat glass market was $273.43 billion in 2021 and is expected to reach $400.38 billion by 2030, growing at a
revenue-based compounded annual growth rate (“CAGR”) of 4.3%.
We are also targeting applications for our LiquidElectricity®
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, projected to reach $11 billion by 2032 with a growth rate of 11.7% annually from 2023 to
2032, driven in part by rising food demand due to growing populations and by government initiatives to develop smart farming, according
to reports by Precedence Research issued in August 2023 and Research & Markets issued in April 2023. 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, although fractional may nevertheless present viable commercial opportunities. Our ability to successfully address
these markets is also dependent on our ability to effectuate development and commercial partnerships as well as securing adequate financing
as needed.
Our Competitive Strengths
We believe that the following strengths of our LiquidElectricity® Coatings
and technologies should enable us to compete successfully in the alternative and renewable energy industries:
Our Business Strategy
Our commercial development efforts 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 photovoltaic 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.
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 Organic Optoelectronics Technology (Beijing) Co., Ltd., Ubiquitous Energy, Heliatek,
Sunew Filmes Fotovoltaicos Impressos S.A. and ASCA 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, historically, we have undertaken 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 development and commercialization partnerships, the marketing, distribution and public acceptance of any products derived
from our research and development efforts, and assist in attracting equity capital, if and when needed.
Our competitive position in the market will also depend
on:
In addition to the foregoing, ultimately, 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.
Intellectual Property
The success of our business depends, in part, on our
ability to pursue, 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.
The Company periodically reviews its intellectual
property portfolio in order to ensure that its portfolio remains germane to its continuing business and operations and, as a cost saving
measure, and if warranted, sell or abandon any intellectual property which is no longer useful or relevant to the Company’s commercialization
efforts or to more fully protect the Company’s intellectual property portfolio.
As of the date of the Annual Report, our proprietary
technologies are the subject of eleven (11) granted United States patents, nineteen (19) granted patents in non-U.S. jurisdictions, and
eight (8) U.S. and twelve (12) non-U.S. pending patent applications. If maintained to their full term our issued patents are scheduled
to expire on various dates between January 2030 and April 2040. 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. Some aspects of LiquidElectricity® Coatings and related processes, technologies and products
involve proprietary trade secrets of the Company.
Additionally, the Company has filed various trademark
registrations and applications for use in commerce.
We believe that many elements of LiquidElectricity®
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.
The Company’s commercial success depends in
part on its ability to obtain intellectual property protection of its innovations and designs, to protect its trade secrets, and to conduct
business without infringing the intellectual property rights of others.
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.
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 annual report, the Company has one (1) full-time
employee, two (2) part-time employees, one (1) full-time consultant and one (1) part-time consultant all located in the United States.
From time to time, the Company grants stock options
to employees and consultants either pursuant to contract requirements or 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.
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 annual report.
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: Mr. Amit Singh, 9375 E Shea Blvd.,
Suite 107-B, Scottsdale AZ 85260. 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 annual report 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, 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 business, results of operations and potential profitability. 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 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.
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 $2,396,395 and $4,948,533 for our fiscal years ended August 31, 2023 and 2022,
respectively. As of August 31, 2023, we had cash and short-term investments of $5,992,610 and working capital of $6,017,272. Based on
management’s assessment, the Company has sufficient cash and short-term investments 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 and short-term investments 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 objectives in 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, intellectual property and prospects. In particular, the Company may be required
to delay; reduce the scope of or terminate its research and development programs; abandon its pursuit of filed but unissued patents; 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.
Because we cannot currently estimate the amount
of funds or time required to commercialize our technologies, even if financing is available to us, 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.
To obtain financing as needed, we may enter
into 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
Pink market. 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.
Adverse conditions in the alternative energy
industry or the global economy 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 for 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 in the development of any novel technology.
Ultimately, the development and commercialization
of our technology is subject to a variety of risks that are particular to the development and commercialization of any novel technology,
the occurrence of any one of which may adversely affect our operations. 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 efforts fail 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 the foreseeable future.
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.
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.
We are operating in a 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 or have more employees than we do; and, unlike us, some have established
market positions for their products. 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.”
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.
The alternative and renewable energy industry is rapidly
evolving and highly competitive. Our failure to refine or advance our technologies, and to develop and introduce new products on a timely
basis could cause our products to become uncompetitive or obsolete, which could prevent us from achieving market share and sales. 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; however, 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 can 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.
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 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, without limitation, the following:
· 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, on a going forward basis,
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.
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 their 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.
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
and our profitability.
We may not be able to integrate our process
and/or technologies into a manufacturing process necessary to produce a manufacturable product.
Without sufficient capital, human resources, the appropriate
process equipment, or required supply chain, the Company may not be capable of integrating its process and/or technologies into a manufacturing
process necessary to produce a manufacturable product. The innovation of our processes and technologies is a crucial strategic concern,
with mounting pressure to meet anticipated power, financial, and ROI and IRR for our manufacturers, or sales and distribution channels.
If we are unable to integrate our processes and/or technologies into industry, our product innovations can rapidly become obsolete. LiquidElectricity®
Coatings and related processes and supply chains are highly complex and continuously exposed to a variety of risks such as microeconomics,
macroeconomic, face geopolitical pressures, regulatory requirements, environmental risk and responsibilities, construction risk, and emerging
markets. Integration of our processes is critical to product development and revenue generation. If the process cannot be integrated into
industry, products, or brought to market in a timely manner, the Company, its potential products, and ability to operate may be threatened.
Currently, the integration of our technologies into industrial manufacturing processes is uncertain.
While there are numerous reasons for selecting a manufacturing
partner, there is considerable risk in selecting a manufacturing partner that is the correct fit for the Company. The level and severity
of risk to the Company is associated with cost, resources and resource management, quality control, scaled production, complicated supply
chain, location, corporate culture, management philosophy, market experience, and an adaptable business model. Based on these risks, the
Company may not be able to integrate our process or technology into an existing manufacturing process with an acceptable level of risk.
Our insurance coverage
may not be adequate to protect us from all business risks.
We may be subject, in the
ordinary course of business, to losses resulting from products liability, accidents, acts of God, and other claims against us, for which
we may have no insurance coverage. As a general matter, the policies that we do have may include significant deductibles or self-insured
retentions, and we cannot be certain that our insurance coverage will be sufficient to cover all future losses or claims against us. A
loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial
condition and operating results.
Risks Related to International
Expansion
In fiscal year 2021, we expanded our operations
to Asia with a business and corporate development operations office in the Republic of Korea, which, on January 13, 2023, the Board decided
to exit.
In September 2020, the Company
established SolarWindow Asia Co. Ltd., its indirectly, wholly owned South Korean subsidiary (the “Korean Subsidiary”).
The Company experienced difficulties in Korea that ultimately resulted in the Board electing to shut down the Korean Subsidiary. The Company
has engaged Korea-based legal counsel and accountants to assist it in winding down the Korea operations and gathering the data necessary
to meet its financial reporting requirements. The Company may incur significant future costs related to the closure, and/or potential
unknown liabilities which may remain undisclosed by its former Chairman and Chief Executive Officer. Currently, the company is not able
to determine when the closure of its Korea Subsidiary will be final.
The Company has limited experience in intellectual
property, manufacturing, regulatory compliance, and sales in international markets, which may adversely affect our business, results of
operations or financial condition should the Company pursue establishing operations in international markets.
International expansion would
expose the Company to risks which could have a material impact on our overall operations and ultimate success. These risks, include:
· fluctuations in currency exchange rates;
· enhanced difficulties of integrating any foreign acquisitions;
· political, social, or economic instability;
· difficulties in staffing and managing international operations;
Changes in regulatory, geopolitical,
social, economic, or monetary policies and other factors, if any, may have a material adverse effect on our business in the future, or
may require us to exit a particular market or significantly modify our current business practices. Abrupt political change, terrorist
activity and armed conflict pose a risk of general economic disruption in affected countries, which could also result in an adverse effect
on our business and results of operations.
We may expand our operations abroad where
we have limited operating experience and may be subject to increased business and economic risks that could affect our financial results.
As we move forward with our