UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended February 28,November 30, 2021

For the transition period from ___________ to ___________

Commission file number 333-127953

SOLARWINDOW TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

(800)213-0689

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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 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.

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 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act: None

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 53,196,79953,198,399 shares of common stock, par value $0.001, were outstanding on March 31, 2021.January 13, 2022.

SOLARWINDOW TECHNOLOGIES, INC.

FORM 10-Q

For the Quarterly Period Ended February 28,November 30, 2021

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

(The accompanying notes are an integral part of these consolidated financial statements)

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(The accompanying notes are an integral part of these consolidated financial statements)

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMESTOCKHOLDERS' EQUITY (UNAUDITED)

^(a) Amounts include translation of subsidiary financial statements from South Korean Won to the U.S. dollar.

(The accompanying notes are an integral part of these consolidated financial statements)

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITYCASH FLOWS (UNAUDITED)

(The accompanying notes are an integral part of these consolidated financial statements)

SOLARWINDOW TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(The accompanying notes are an integral part of these consolidated financial statements)

SOLARWINDOW TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – Basis of Presentation and Organization

Basis of PresentationOrganization

The accompanying unaudited interim consolidated financial statements of SolarWindow Technologies, Inc. and its controlled subsidiary companies (collectively, the “Company”) as of February 28, 2021, and for the three and six months ended February 28, 2021 and February 29, 2020 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for  quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on November 10, 2020.

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Actual results may differ from those estimates. The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position as of February 28, 2021, results of operations, stockholders’ equity and cash flows for the three and six months ended February 28, 2021 and February 29, 2020. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Organization

SolarWindow Technologies, Inc. was incorporated in the State of Nevada on May 5, 1998. On August 24, 2020, the Company formed wholly owned SolarWindow Asia (USA) Corp. as the holding company for SolarWindow Asia Co. Ltd., (collectively “SolarWindow Asia”) a company formed in the Republic of Korea for the purpose of expansion into the Asian markets. SolarWindow™ technology harvests light energy from the sun and from artificial light sources, by generating electricity from a transparent coating of organic photovoltaic (“OPV”) solar cells, applied to glass and plastics, thereby creating a “photovoltaic” effect. The Company’s ticker symbol is WNDW.

Liquidity and Management’s Plan

The Company has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. We expect to incur losses as we continue to develop and further refine and promote our technologies and potential product applications. As of February 28,November 30, 2021, the Company had $13,477,264 $11,394,950 of cash and cash equivalents and short term investments on hand and working capital of $13,883,909.$11,012,787. The Company believes that it currently has sufficient cash to meet its funding requirements over the next twelve months following the issuance of this Quarterly Report on Form 10-Q. However, the Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it may need to raise additional capital to accomplish its business plan. If additional funding is required, the Company expects to seek to obtain that funding through financial or strategic investors. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

NOTE 2 – SummaryInterim Statement Presentation

Basis of Significant Accounting PoliciesPresentation and Use of Estimates

Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to theThe accompanying unaudited interim consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended August 31, 2020. Presented below and in the following notes is supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report.

Fiscal quarter

The Company’s quarterly periods end on November 30, February 28, May 31, and August 31. The Company’s second quarter in fiscal 2021 and 2020 ended on February 28, 2021 and February 29, 2020, respectively.

Principles of consolidation

These consolidated financial statements presented are those of SolarWindow Technologies, Inc. and its wholly owned subsidiaries, SolarWindow Asia (USA) Corp.,controlled subsidiary companies (collectively, the “Company”) as of November 30, 2021, and SolarWindow Asia Co. Ltd. All significant intercompany balancesfor the three months ended November 30, 2021 and transactions2020 have been eliminated.

Theprepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These Consolidated Financial Statements aboveshould therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on November 4, 2021.

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Actual results may differ from those estimates. The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position as of November 30, 2021, results of operations, stockholders’ equity and cash flows for the three months ended November 30, 2021 and 2020. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for SolarWindow Asia from the date of its operations beginning in September 2020. During our fiscal quarter ended November 30, 2020, the Company made its initial capital infusion of $831,000 to SolarWindow Asia.entire year.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the accounting period. The Company considers its accounting policies relating to stock basedstock-based compensation to be the most significant accounting policy that involves management estimates and judgments. The Company has made accounting estimates based on the facts and circumstances available as of the reporting date. Actual amounts could differ from these estimates, and such differences could be material.

Cash

These consolidated financial statements presented are those of SolarWindow Technologies, Inc. and its wholly owned subsidiaries, SolarWindow Asia (USA) Corp., and SolarWindow Asia Co. Ltd. All significant intercompany balances and transactions have been eliminated.

Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended August 31, 2021. Presented below and in the following notes is supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report.

Fiscal quarter

The Company’s quarterly periods end on November 30, February 28, May 31, and August 31. The Company’s first quarter in fiscal 2022 and 2021 ended on November 30, 2021 and 2020, respectively.

Cash Equivalents and Highly Liquid Investments

CashAs of November 30, 2021, the Company’s cash, includes $214,177in domestic bank accounts $52,211 in our Korean subsidiary bank account and cash equivalents include cash on hand and highly liquid investments with original maturities$11,128,562 held in Canadian bank accounts in excess of three months or less from the date of purchase.Canadian Deposit Insurance Corporation insured limits.

Short-term investments

The Company determines the balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. Money market funds, certificates of deposit, and time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments. As of February 28,August 31, 2021, the short-term investmentinvestments consists of a fixed-term deposit with a twelve monthtwelve-month maturity at the time of purchase which matured on October 1, 2020.2021.

Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion.

Recent accounting pronouncements not yet adopted

None.

Recently adopted accounting pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The adoptionCompany adopted of ASU 2019-12 is not expected to have a materialbeginning September 1, 2021 with no impact on the Company’s consolidated financial position, results of operations, or cash flows. its Financial Statements. 

Recently adopted accounting pronouncementsNOTE 3 - Net Income (Loss) Per Share

The Company reviews new accounting standards as issued. Although somecomputation of these accounting standards issued or effective afterbasic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the Company’s previous fiscal year mayreporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be applicable,issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company has not identified any standards thatexperienced a loss, there is no inclusion of dilutive securities as their inclusion in the Company believes merit further discussion. The Company believes that none of the new standardsEPS calculation is antidilutive. Furthermore, options and warrants will have a significant impact ondilutive effect under the consolidated financial statements.treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money).

Following is the computation of basic and diluted net loss per share for the three months ended November 30, 2021 and 2020:

NOTE 34 – Property and Equipment

Property and equipment consists of the following:

During the three months ended February 21,November 30, 2021 furniture and fixtures, leasehold improvements 2020, the company purchased $3,142 and in-process$27,726 of property and equipment, increased $15,579, $28,822 and $27,246, respectively, due to payments towards SolarWindow Asia office improvements.

As a result of the closure of the Vestal New York office, during our first fiscal quarter, , the Company disposed of office equipment, computers and furniture with an historical cost totaling $21,543 and net book value of $10,936. The Company received $2,161 of proceeds from the sale of the assets resulting in a loss of $8,775.

respectively. During the three months ended February 28,November 30, 2021 and February 29, 2020, the Company recognized straight-line depreciation expense of $6,673 $8,642 and $6,218,$5,782, respectively.

During the six monthsyear ended February 28, 2021 and February 29, 2020,August 31, 2019, the Company recognized depreciation expensemade payments for in-process equipment totaling $1,292,655 towards the purchase of $12,455manufacturing equipment with an estimated total cost of $1,803,000. Due to the termination of the Triview Process Integration and $12,902, respectively.Production Agreement on September 27, 2019, subsequent COVID-19 pandemic and move into the Asian markets, the Company placed on hold finalizing the equipment. The Company is currently evaluating its options, including completing the equipment which continues to be contingent upon management’s determination of the equipment engineering and performance specifications required in order to optimize the equipment for manufacturing of the Company’s initial product and other factors. Completion of the equipment will require additional payments totaling approximately $510,000.

NOTE 45 – Common Stock and Warrants

Common Stock

At February 28, November 30, 2021,, the Company had 300,000,000authorized shares of common stock with a par value of $0.001 $0.001 per share, 53,196,799 and 53,198,399 shares of common stock outstandingoutstanding.

2006 Long-Term WarrantsIncentive Plan

In 2006 the Company’s Board and stockholders adopted and approved 15,000,000 shares for grant under the 2006 Long-Term Incentive Plan (the “2006 Plan”). The 2006 Plan was extended by the Board on February 7, 2021 to expire two years hence. The 2006 Plan was adopted in order to attract and retain the best available personnel for positions of substantial authority and to provide additional incentive to employees and directors to promote the success of the Company’s business. The 2006 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, and other types of awards to employees, consultants, and directors. Stock option grants pursuant to the 2006 Plan vest from zero to five years and expire from six to ten years after the date of grant with the exercise price equal to the fair value of the underlying stock on the date of grant. All shares approved for grant and subsequently forfeited are available for future grant. The Company does not repurchase shares to fulfill the requirements of options that are exercised and therefore issues new shares when options are exercised. There are currently 7,040,527 shares reserved for issuance under the 2006 Plan, see “NOTE 5 - Stock Options” for additional information.

Warrants

Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. Other than the Series O Warrants and Series P Warrants, all of the following warrants may be exercised on a cashless basis. A summary of the Company’s warrants outstanding and exercisable as of February 28,November 30, 2021 and August 31, 20202021 is as follows:

During the three months ended February 28, 2021, 200,000 Series S Warrants were exercised for cash resulting in $684,000 of proceeds to the Company.

NOTE 56 - Stock Options

The Company measures share-based compensation cost on the grant date, based on the fair value of the award, and recognizes the expense on a straight-line basis over the requisite service period for awards expected to vest. The Company estimated the grant date fair value of stock options using a Black-Scholes valuation model using the following weighted-average assumptions:

A summary of the Company’s stock option activity for the sixthree months ended February 28,November 30, 2021 and related information follows:

The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of the period covered by this report and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all in-the-money option holders exercised their vested options on February 28,November 30, 2021. The intrinsic value of the option changes based upon the fair market value of the Company’s common stock. Since the closing stock price was $15.10 $4.86 on February 28,November 30, 2021 and all 5,054,300 outstanding options have an exercise price below $15.10 $4.86 per share, as of February 28,November 30, 2021, there is $75,046,959 $9,099,086 and $44,988,139 $8,165,631 of intrinsic value in the Company’s outstanding stock options and vested options, respectively.

Three and Six Months Ended February 28,November 30, 2021

Grants - Pursuant to his appointment to the Board, onOn October 19, 2020,27, 2021, the Company’s Board granted 50,000 140,000 options to Joseph Sierchio, Director,its officers and directors, with an exercise price of $3.42,$6.21, exercisable on a cashless basis any time prior to the Company’s listing of any of its securities for trading on a national stock exchange, six yearten-year term and vesting as to 50% of the options on the six-month anniversary of the date of grant and as to the remaining 50% of the options on the twelve-month anniversary from the date of grant. As a result of his resignation from the Board on November 10, 2021, Mr. Gary Parmar forfeited 58,600 unvested stock options, including 30,000 options granted on October 27, 2021.

Three Months Ended November 30, 2020

On October 19, the Company’s Board granted 50,000 options to Joseph Sierchio, Director, with an exercise price of $3.42, exercisable on a cashless basis any time prior to the Company’s listing of any of its securities for trading on a national stock exchange, six-year term and vesting at the rate of 12,500 on the date of grant and 12,500 each anniversary thereafter.

Exercises – upon the exercise of 56,667 stock options by three individuals between December 18, 2020 and February 23, 2021, the Company received $35,400 and issued 37,476 shares of restricted common stock. Of the 56,667 options exercised, 10,000 were exercised for cash at an exercise price of $3.54 and 46,667 were exercised on a cashless basis resulting in the issuance of 27,476 shares of restricted common stock.

Forfeitures and cancellations – On December 18, 2020, Mr. John Conklin and the Company entered into an Amendment to the Separation, Consulting and Release of Claims Agreement dated November 24, 2020. Pursuant to the Amendment, no further payments are due to Mr. Conklin and all stock options granted under his employment agreement totaling 1,008,000 were cancelled. In addition, 37,500 unvested options granted to Mr. Conklin on July 5, 2019 were also cancelled. 16,667 options expired and 4,500 options that were previously canceled as a result of an employee reduction in hours were reinstated due to the continuation of that employee’s services.

Three and Six Months Ended February 29, 2020

On October 9, 2019, the Company granted 153,000 options to an employee with a ten-year term, exercise price of $2.32 per share and vesting at the rate of 1/36th per month. Additionally, on September 16, 2019, the Board granted 5,000 options with a six-year term to a consultant with an exercise price of $3.54 per share and vesting at the rate of 1/20th per quarter.

The following table sets forth the share-based compensation cost resulting from stock option grants, including those previously granted and vesting over time, that were recorded in the Company’s Statements of Operations for the three and six months ended February 28,November 30, 2021 and February 29, 2020:

As of February 28,November 30, 2021, the Company had $2,305,188 $1,014,751 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 3.50 2.75 years.

The following table summarizes information about stock options outstanding and exercisable at February 28, 2021:

NOTE 6 – Leases

On February 26, 2021, SolarWindow Asia entered into an apartment lease for the purposes of housing foreign personnel. The term of the apartment lease provide for a term of one year beginning March 7, 2021, monthly rent of approximately $950 and a security deposit of approximately $8,700 of which approximately $900 was paid prior to February 28, 2021 and the remaining $7,800 paid on March 8, 2021.

In September 2020, SolarWindow Asia entered a lease for office space in South Korea. The lease has a term of one year from September 23, 2020 through September 23, 2021 with monthly payments of approximately $1,200.

The Company’s policy is to record all leases with a term of less than one year as an operating lease with rent expensed recorded on a straight-line basis and to not recognize lease assets or lease liabilities.

On May 1, 2019, the Company leased office space in Vestal, New York and entered into a Professional Building Lease Agreement (the “Lease”). The Lease has an initial term of three years through May 1, 2022 with monthly rent due of $2,200 for the first two years and $2,266 during year three. On November 30, 2020, the Company terminated the Lease and entered into a lease termination agreement (the “Termination Agreement”). Pursuant to the terms of the Termination Agreement, the Company made a payment of $26,400 and delivered the premises in good order including the removal of furniture and fixtures which the Company disposed, See “NOTE 3 – Property and Equipment” for additional information related to the disposal of the furniture and fixtures. All related assets and liabilities were written off with $418 of unrecognized interest expense charged to rent expense.2021:

As of November 30, 2020, the Company has not entered into any leases other than those described above which have not yet commenced and would entitle the Company to significant rights or create additional obligations.

The components of Lease expenses are as follows:

^(a) Represents three months of rent expense at $2,222 per month, $26,400 lease termination fee, ($418) of unrecognized interest expense and $7,632 related to SolarWindow Asia.

Supplemental balance sheet information related to the Lease is as follows:

NOTE 7 - Transactions with Related Persons

A related party with respect to the Company is generally defined as any person (i) (and, if a natural person, inclusive of his or her immediate family) that holds 10% or more of the Company’s securities, (ii) that is part of the Company’s management, (iii) that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

On August 7, 2017, the Company appointed Jatinder Bhogal to the Board of Directors. Mr. Bhogal has provided consulting services to the Company through his wholly owned company, Vector Asset Management, Inc. (“VAMI”), pursuant to a Consulting Agreement dated February 1, 2014, as amended on November 11, 2016 and December 1, 2018 (Amendment No. 2). On July 1, 2020 the Company and VAMI entered into an Executive Consulting Agreement which supersedes the foregoing agreements and(the “ECA”) pursuant to which Mr. Bhogal serves as a director of the Company and as its Chairman and Chief Executive Officer. Pursuant to the Consulting Agreements in effect prior to December 1, 2018, VAMI received compensation of $5,000 per month. Beginning with Amendment No. 2, VAMI received compensation of $18,750 per month and pursuant to the ECA, VAMI receives $34,167 per month.month and is eligible for an annual bonus. VAMI also incurs expenses on behalf of the Company which are reimbursed according to the Company’s expense report policy. In connection with the Consulting Agreements and ECA, the Company recognized cash compensation expense of $102,500$266,500 (includes bonus of $164,000) and $56,250 $102,500 during the three months ended February 28,November 30, 2021 and February 29, 2020, respectively, and $205,000 and $112,500 during the six months ended February 28, 2021 and February 29, 2020, respectively. As of February 28,November 30, 2021, the Company recognized a related party payable to VAMI of $34,167.$198,167.

From time-to–time, Talia Jevan Properties, Inc., a British Columbia corporation wholly-owned by our former Chairman and majority shareholder, Harmel S. Rayat would make interest-free advances to the Company. Advances received totaled $0 and $5,692 during the three months ended February 28, 2021 and February 29, 2020, respectively, and $0 and $86,357 during the six months ended February 28, 2021 and February 29, 2020, respectively. On October 20, 2020, the Company repaid Talia Jevan Properties $53,251, the balance owing as of our fiscal year end August 2020. As of February 28, 2021, there were no balances owing to Talia Jevan Properties, Inc.

Joseph Sierchio, one of the Company’s directors, has maintained his role as the Company’s General Counsel since its inception as Principal of the law firm of Sierchio & Partners, LLP, and then as a Partner with Satterlee Stephens LLP and beginning in August 2020, as Principal of Sierchio Law, LLP pursuant to an engagement letter which provides for an annual fee of $175,000 in exchange for general counsel services. Mr. Sierchio resigned from the Board effective October 22, 2018, and was reappointed on October 1, 2020. Fees for legal services billed by Sierchio Law, LLP while Mr. Sierchio wasserving as a Director totaled $43,750 $43,750 and $72,917 during$29,167 for the three and six months ended February 28,November 30, 2021 and 2020, respectively. As of November 30, 2021, the Company recognized a related party payable to Sierchio Law, LLP of $14,583.

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

NOTE 8 – Commitments and Contingencies

In September 2020, and February 2021, SolarWindow Asia entered into leases for office space and an apartment in South Korea. See “Note 69 - Leases” for additional information.

During 2019, the Company made payments totaling $1,292,655 towards the purchase of manufacturing equipment with an estimated total cost of $1,803,000.$1,803,000. The remaining $510,345 will be paid upon the completion of the equipment oncewhich date is currently unknown.

COVID-19 Pandemic and the final specifications have been determined pending optimization of the Company’s product iteration specific to this equipment.Coronavirus Aid, Relief, and Economic Security (“CARES”) Act

COVID-19

In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11,January 30, 2020, the World Health Organization declared(“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 virusoutbreak as a global pandemic, andbased on March 13, 2020, President Donald J. Trump declared the virus a national emergencyrapid increase in the United States. This highly contagious disease has spread to mostexposure globally.

The full impact 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 leadingCOVID-19 outbreak continues to a world-wide economic downturn. It has caused a disruptionevolve as of the normaldate of this report. As such, it is uncertain as to the full magnitude that the pandemic may have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of many businesses, including the temporary closureCOVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirementsliquidity for employees, either by government order or on a voluntary basis. fiscal year 2022.

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; however, its ultimate impact is highly uncertain and subject to change.

On March 27, 2020, then President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the SBA Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19.

NOTE 9 - Net Income (Loss) Per Share– Leases

On February 26, 2021, SolarWindow Asia entered into an apartment lease for the purposes of housing foreign personnel. The computationapartment lease provided for a term of basic earnings per share (“EPS”) is based on the weighted average numberone year beginning March 7, 2021, monthly rent of shares that were outstanding during the period, including sharesapproximately $950 and a security deposit of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money).approximately $8,700.