Forward-Looking Statements

This Report on Form 10-Q contains forward-looking statements which involve assumptions and describe our future plans, strategies, and expectations, and are generally identifiable by use of words such as "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project," or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

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 industry, (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 under "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as in this Form 10-Q generally. 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-Q 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 uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers 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. Readers are urged to carefully review and consider the various disclosures made by us in our filings with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect our actual results may vary materially from those expected or projected.

Except where the context otherwise requires and for purposes of this Form 10-Q only, "we" "us" "our" "Company" "our Company" and "SolarWindow" refer to SolarWindow Technologies, Inc., a Nevada corporation.





Overview

We are a pre-revenue company developing proprietary SolarWindow™ transparent electricity generating coatings. SolarWindow™ coatings are an OPV device comprised of ultra-thin layers that can be applied to glass, flexible glass and plastic surfaces. Our SolarWindow™ transparent electricity-generating coatings and technology is capable of harvesting light energy from the sun and artificial sources and could potentially be used on any of the more than 85 million commercial and residential buildings in the U.S. alone. Our SolarWindow™ technology is the subject of over sixty (60) U. S. and international patent, and thirty (30) trademark application filings for our electricity-generating coating and SolarWindow™ technology development efforts.

The development of our SolarWindow™ technology continues to advance under the Stevenson-Wydler Cooperative Research and Development Agreement (the "CRADA") with the Alliance for Sustainable Energy, LLC (the "Alliance for Sustainable Energy"), which is the operator of The National Renewable Energy Laboratory ("NREL"). SolarWindow™ technology and product development continues under the initial NREL CRADA.





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In addition, the Company was awarded an Advanced Materials Manufacturing Cooperative Research and Development Agreement ("AMM CRADA") from the U.S. Department of Energy ("DOE") Office of Energy Efficiency and Renewable Energy's ("EERE") Advanced Manufacturing Office ("AMO"). The purpose of AMM CRADA is to develop and demonstrate a unique high-throughput process methodology for semitransparent OPV modules compatible with high process speeds for many different advanced material manufacturing systems.

We have achieved numerous important milestones and overcome major technical challenges in the development of our SolarWindow™ technology, including the ability to generate electricity on glass while remaining transparent and the application of our coatings on to glass at room temperature and pressure.

A brief list of some of our more important milestones includes:

· SolarWindow™ coatings were successfully processed through a rigorous laminated


   commercial window glass fabrication autoclave system. Layered with SolarWindow™
   electricity-generating liquid coatings, glass modules were subjected to the
   extremely high heat and pressure of autoclave equipment located at a commercial
   glass fabricator's facility. Despite the SolarWindow™ modules being subjected
   to the harsh pressure and temperature conditions, subsequent performance
   testing confirmed that the modules continued to produce power. This is an
   important milestone for the commercialization of SolarWindow products, showing
   that our PV layers are compatible with autoclave production equipment.

· SolarWindow has been awarded a Grant by the U.S. Department of Energy, for


   Advanced Manufacturing. The Company was awarded the CRADA after submitting a
   proposal outlining its process technologies and fabrication methods to the
   DOE's Roll-to-Roll Advanced Materials Manufacturing Consortium, led by Oak
   Ridge National Laboratory ("ORNL") and partnering with Argonne National
   Laboratory ("ANL"), Lawrence Berkeley National Laboratory ("LBNL"), and NREL.
   The AMM CRADA will be carried out with the DOE by SolarWindow, ANL, and NREL.

· the Company has set a new performance record for power efficiency with a 34%


   increase in performance over previous generations of its transparent
   electricity-generating glass. Performance results are based on independent
   testing and certification of SolarWindow™ devices by NREL's Device Performance
   Measurement Laboratory;

· successfully completed important freeze/thaw performance testing necessary for


   the commercialization of our transparent electricity-generating coatings;
   modules were subjected to more than 200 freeze/thaw cycles, which yielded
   favorable performance results of the edge sealing processes and minimal impact
   on the device electrical performance;

· expanded product development and successfully applied our


   electricity-generating coatings onto flexible glass - as thin as a business
   card (only 0.1-millimeter-thick) - that is flexible enough to be bent without
   breaking or cracking;

· entered into the NREL CRADA which is still in effect and continues to support


   our on-going R&D and product development to improve our device, materials, and
   processes;

· filed over ninety (90) U. S. and international patent and trademark


   applications for our electricity-generating coating and SolarWindow™ technology
   development efforts;

· expanded the use of our SolarWindow™ coatings to include two new product lines


   for commercial and military aircraft, and the safety and security of military
   pilots;

· generated electricity on flexible plastic using novel see-through SolarWindow™


   coatings;

· developed new SolarWindow™ coatings with increased transparency and improved


   color;




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· produced the largest OPV device ever fabricated at NREL in the institute's


   history;

· successfully collected and transported electricity using a virtually

'invisible' conductive wiring system developed for SolarWindow™;

We are currently developing "SolarWindow™ Products" derived from our SolarWindow™ technology designed to address several potential markets, including:

· SolarWindow™ - Commercial - A flat glass product for installation in new


   commercial towers under construction and replacement windows;

· SolarWindow™ - Structural Glass - Structural glass walls and curtains for tall


   structures;

· SolarWindow™- Architectural Glass - Textured and decorative interior glass


   walls, room dividers, etc.;

· SolarWindow™ - Residential - A window glass for installation in new residential


   homes under construction and replacement windows;

· SolarWindow™ - Flex - Flexible films which may be applied directly to different

surfaces;

· SolarWindow™ - PowerWrap™ - A proprietary product under development that plans


   to feature multiple colors and high-power production; and

· SolarWindow™ Retrofit Veneer - Transparent, tinted, and flexible veneers that


   installers can apply directly on to existing, previously installed, window
   glass.

This product line is established to broaden our market reach goals beyond new and replacement installations, to include windows currently installed on the estimated five million commercial buildings constructed in the U.S. alone. As noted, the SolarWindow™ Retrofit Veneer products will be developed concurrently with the other SolarWindow™ products currently under development.

Our product development efforts have produced early working prototypes for these applications, which we are sharing with potential commercialization partners, who will work along-side us to ascertain whether the SolarWindowTM technology can form the basis for a commercially viable technology or product and which products will be first to market.

We also developed the capability to integrate transparent SolarWindow™ coatings on to flexible glass. This presents new product opportunities for curved and non-flat surfaces in automotive, aircraft, and military applications.

We plan to advance the technical and product development, and subsequent commercialization of our SolarWindow™ technologies and products through process integration with existing glass fabricators, research and development agreements, licensing, joint venture arrangements, and co-marketing and co-promotion and distribution arrangements with third party collaborators. We are actively seeking additional technology and product licensing, joint venture arrangements, and manufacturing process integration relationships with commercial partners and industry; and organizations which have established technical competencies, market reach, and mature distribution networks in the solar PV, building-integrated PV, and alternative and renewable energy market industries. We believe that this approach could provide immediate access to existing distribution channels which can increase market penetration and commercial acceptance of our products and enable us to avoid expending significant funds for development of a large sales and marketing organization. At the time of this filing, we have not entered into any such arrangements for these services or relationships.





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We do not currently have any commercial products and there is no assurance that we will successfully be able to design, develop, manufacture, or sell any commercial products in the future. Our product development programs involve ongoing R&D and product development efforts, and the commitment of significant resources to support the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by our contract engineers, scientists, and consultants.

We cannot accurately predict the amount of funding or the time required to successfully commercialize or fabricate SolarWindow™ products. The actual cost and time required to commercialize our SolarWindow™ 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.

Research and Related Agreements

We are a party to certain agreements related to the development of our SolarWindow™ technology.

Stevenson-Wydler Cooperative Research and Development Agreement with the Alliance for Sustainable Energy

On March 18, 2011, we entered into the NREL CRADA with Alliance for Sustainable Energy, the operator of the NREL under its U.S. Department of Energy contract to advance the commercial development of the SolarWindow™ technology. Under terms of the NREL CRADA, NREL researchers will make use of our exclusive intellectual property ("IP"), newly developed IP, and NREL's background IP in order to work towards specific product development goals, established by the Company. Under the terms of the NREL CRADA, we agreed to reimburse Alliance for Sustainable Energy for filing fees associated with all documented, out-of-pocket costs directly related to patent application preparation and filings, and maintenance of the patent applications.

On January 16, 2013, we entered into a modification to the NREL CRADA for the purpose of extending the date pursuant to which NREL's researchers will make use of our exclusive IP and NREL's background IP.

On March 6, 2013, we entered into Phase II of our NREL CRADA. Under the terms of the agreement, researchers will additionally work towards:

· further improving SolarWindow™ technology efficiency and transparency;

· optimizing electrical power (current and voltage) output;

· optimizing the application of the active layer coatings which make it possible


   for SolarWindow™ coatings to generate electricity on glass surfaces;

· developing improved electricity-generating coatings by enhancing performance,


   processing, reliability, and durability;

· optimizing SolarWindow™ coating performance on flexible substrates; and

· developing high speed and large area roll-to-roll (R2R) and sheet-to-sheet

(S2S) coating methods required for commercial-scale building integrated

photovoltaic ("BIPV") products and windows.

On December 28, 2015, we entered into another modification to the NREL CRADA (the "Modification"). The purpose of the Modification was to extend the date of completion to December 2019 pursuant to which NREL's researchers work towards specific product development goals.





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On November 18, 2019, we entered into a No Cost Time Extension ("NCTE") under the NREL CRADA. Under the terms of the NCTE, all terms and conditions of the NREL CRADA remain in full force and effect without change, with a new completion date of March 21, 2020. Specifically, we are preparing to commercialize our OPV-based SolarWindow™ transparent electricity-generating coatings for BIPV, and glass and flexible plastic applications. Under the Modification, NREL and the Company will work jointly towards achieving specific commercialization goals and objectives. As of November 30, 2019, the Company made $658,585 of advances to Alliance for Sustainable Energy for work to be performed under the NREL CRADA, which is capitalized as deferred research and development costs on our balance sheets.

U.S. Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy's (EERE) Advanced Manufacturing Office (AMO) Cooperative Research and Development Agreement

On March 15, 2018 the Company was awarded it's first-ever AMM CRADA by the DOE EERE AMO. SolarWindow was awarded the AMM CRADA after submitting a proposal outlining its coating technologies and fabrication methods to the DOE's Roll-to-Roll Advanced Materials Manufacturing Consortium, led by ORNL and partnering with ANL, LBNL, and NREL. The AMM CRADA will be carried out with the DOE by SolarWindow, ANL, and NREL.

The purpose of the AMM CRADA is to develop and demonstrate a unique high-throughput process methodology for semitransparent OPV modules compatible with high process speeds for many different advanced material manufacturing systems.





Results of Operations

Three months ended November 30, 2019 compared with the three months ended November 30, 2018





Operating Expenses



A summary of our operating expense for the three months ended November 30, 2019
and 2018 follows:



                                          Three Months Ended
                                             November 30,            Increase /     Percentage
                                          2019           2018        (Decrease)       Change
Operating expenses:
Selling, general and administrative   $   448,562     $ 371,405     $   77,157            21
Research and product development          330,249       137,620        192,629           140
Stock based compensation                  420,970       385,734         35,236             9
Total operating expenses              $ 1,199,781     $ 894,759     $  305,022            34

Selling, General and Administrative

Selling, general and administrative ("SG&A") costs include all expenditures incurred other than research and development related costs, including costs related to personnel, professional fees, travel and entertainment, public company costs, insurance and other office related costs. During the three months ended November 30, 2019 compared to the three months ended November 30, 2018, SG&A costs increased due primarily to an approximately $51,000 increase in personnel costs and $24,000 increase in other administrative costs.

Research and Product Development

Research and Product Development ("R&PD") costs represent costs incurred to develop our SolarWindow™ technology and are incurred pursuant to our research agreements and agreements with other third-party providers and certain internal R&PD cost allocations. Payments under these agreements include salaries and benefits for R&PD personnel, allocated overhead, contract services and other costs. R&PD costs are expensed when incurred, except for non-refundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed. During the three months ended November 30, 2019 compared to the three months ended November 30, 2018, R&PD costs increased primarily as a result of an approximate $130,000 increase in CRADA costs, $48,000 increase in personnel costs and $15,000 increase in other R&PD related costs.





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Stock Based Compensation

The Company grants stock options to its Directors, employees and consultants. Stock compensation represents the expense associated with the amortization of our stock options. Expense associated with equity-based transactions is calculated and expensed in our financial statements as required pursuant to various accounting rules and is non-cash in nature. Stock based compensation expense increased during the three months ended November 30, 2019 compared to the three months ended November 30, 2018 due to differences in the terms of option grants and the roll off of expense related to older grants offset by expense related to more recent grants.





Other Income (Expense)



A summary of our other income (expense) for the three months ended November 30,
2019 and 2018 follows:



                                      Three Months Ended November 30,        Increase /
                                        2019                 2018            (Decrease)
   Other income (expense)
   Interest income                $      94,503       $               -     $   94,503
   Interest expense                           -                (128,239 )     (128,239 )
   Accretion of debt discount                 -                (663,918 )     (663,918 )
   Total other income (expense)   $      94,503       $        (792,157 )   $ (886,660 )

"Interest income" relates to the interest earned on our cash. "Interest expense" relates to the stated interest of our convertible promissory notes and bridge note. "Accretion of debt discount" represents the accretion of the discount applied to those notes as a result of the issuance and modification of detachable warrants and the beneficial conversion feature contained therein. As a result of the financing received by the Company on November 26, 2018, all outstanding debt was converted resulting in the elimination of further interest expense and an increase in accretion due to the recognition of all remaining debt discount related to the 2013 Note.

Liquidity and Capital Resources

Our principal source of liquidity is cash in the bank. As of November 30, 2019, the Company had $15,950,512 of cash compared to $16,604,011 as of August 31, 2019. We have financed our operations primarily from the sale of equity and debt securities.

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