UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended November 30,
2012
o
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
NEW ENERGY TECHNOLOGIES, INC.
(Exact name of registrant as specified in
its charter)
Nevada
|
59-3509694
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
|
|
9192 Red Branch Road, Suite 110
|
|
Columbia, Maryland
|
21045
|
(Address of principal executive offices)
|
(Zip Code)
|
(800) 213-0689
(Registrant’s telephone number, including
area code)
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
T
No
o
Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 and post such files). Yes
T
No
o
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer
|
¨
|
|
Accelerated filer
|
o
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
¨
|
|
Smaller reporting company
|
x
|
Indicate by check mark
whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act.) Yes
o
No
T
Indicate the number of
shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 20,638,360 shares
of common stock, par value $0.001, were outstanding on January 14, 2013.
NEW ENERGY TECHNOLOGIES, INC.
FORM 10-Q
For the Quarterly Period November 30,
2012
Table of Contents
PART I FINANCIAL INFORMATION
|
|
|
|
Item 1. Consolidated Financial Statements (Unaudited)
|
|
|
|
Consolidated Balance Sheets
|
1
|
|
|
Consolidated Statements of Operations
|
2
|
|
|
Consolidated Statements of Stockholders’ Equity (Deficit)
|
3
|
|
|
Consolidated Statements of Cash Flows
|
4
|
|
|
Notes to Consolidated Financial Statements
|
5
|
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
12
|
|
|
Item 4. Controls and Procedures
|
16
|
|
|
PART II OTHER INFORMATION
|
|
|
|
Item 1. Legal Proceedings
|
17
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
17
|
|
|
Item 3. Defaults Upon Senior Securities
|
17
|
|
|
Item 4. Mine Safety Disclosures
|
17
|
|
|
Item 5. Other Information
|
17
|
|
|
Item 6. Exhibits
|
17
|
|
|
Signatures
|
18
|
|
|
Certifications
|
|
|
|
PART I — FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
NEW ENERGY TECHNOLOGIES, INC.
|
(A Development Stage Company)
|
CONSOLIDATED BALANCE SHEETS
|
NOVEMBER 30, 2012 AND AUGUST 31, 2012
|
|
|
|
|
|
|
|
|
|
November 30,
|
|
|
August 31,
|
|
|
|
2012
|
|
|
2012
|
|
ASSETS
|
|
(Unaudited)
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
727,153
|
|
|
$
|
1,046,918
|
|
Deferred research and development costs
|
|
|
2,990
|
|
|
|
32,595
|
|
Prepaid expenses and other current assets
|
|
|
24,096
|
|
|
|
28,233
|
|
Total current assets
|
|
|
754,239
|
|
|
|
1,107,746
|
|
|
|
|
|
|
|
|
|
|
Equipment, net of accumulated depreciation of $7,418 and $5,882, respectively
|
|
|
18,430
|
|
|
|
19,966
|
|
Total assets
|
|
$
|
772,669
|
|
|
$
|
1,127,712
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
58,976
|
|
|
$
|
63,403
|
|
Accrued liabilities
|
|
|
44,141
|
|
|
|
26,231
|
|
Convertible promissory note, net of discount of $983,689 and $999,485, respectively
|
|
|
16,311
|
|
|
|
515
|
|
Total current liabilities
|
|
|
119,428
|
|
|
|
90,149
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding at November 30, 2012 and August 31, 2012.
|
|
|
-
|
|
|
|
-
|
|
Common stock: $0.001 par value; 300,000,000 shares authorized, 20,638,360 shares issued and outstanding at November 30, 2012 and August 31, 2012.
|
|
|
20,638
|
|
|
|
20,638
|
|
Additional paid-in capital
|
|
|
13,821,422
|
|
|
|
13,798,282
|
|
Deficit accumulated during the development stage
|
|
|
(13,188,819
|
)
|
|
|
(12,781,357
|
)
|
Total stockholders' equity
|
|
|
653,241
|
|
|
|
1,037,563
|
|
Total liabilities and stockholders' equity
|
|
$
|
772,669
|
|
|
$
|
1,127,712
|
|
(The accompanying notes are an integral part of these consolidated financial statements)
|
NEW ENERGY TECHNOLOGIES, INC.
|
(A Development Stage Company)
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011 AND FOR THE
|
PERIOD FROM INCEPTION (MAY 5, 1998) TO NOVEMBER 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
May 5, 1998
|
|
|
|
Three Months Ended November 30,
|
|
|
(Inception) to
|
|
|
|
2012
|
|
|
2011
|
|
|
November 30, 2012
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
301,531
|
|
|
|
515,275
|
|
|
|
11,687,523
|
|
Research and development
|
|
|
72,225
|
|
|
|
130,192
|
|
|
|
2,662,364
|
|
Total operating expense
|
|
|
373,756
|
|
|
|
645,467
|
|
|
|
14,349,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(373,756
|
)
|
|
|
(645,467
|
)
|
|
|
(14,349,887
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
-
|
|
|
|
-
|
|
|
|
98,582
|
|
Interest expense - other
|
|
|
(17,910
|
)
|
|
|
-
|
|
|
|
(56,534
|
)
|
Interest expense - accretion of debt discount
|
|
|
(15,796
|
)
|
|
|
-
|
|
|
|
(16,311
|
)
|
Loss on disposal of fixed assets
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,307
|
)
|
Gain on dissolution of foreign subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
59,704
|
|
Foreign exchange loss
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
(86,428
|
)
|
Change in fair value of warrant liability
|
|
|
-
|
|
|
|
-
|
|
|
|
2,128,331
|
|
Payable written off
|
|
|
-
|
|
|
|
156,109
|
|
|
|
186,109
|
|
Total other income (expense)
|
|
|
(33,706
|
)
|
|
|
156,077
|
|
|
|
2,308,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(407,462
|
)
|
|
|
(489,390
|
)
|
|
|
(12,041,741
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
-
|
|
|
|
(135,461
|
)
|
|
|
(404,307
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(407,462
|
)
|
|
$
|
(624,851
|
)
|
|
$
|
(12,446,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
Discontinued operations
|
|
$
|
-
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
Total
|
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted
|
|
|
20,638,360
|
|
|
|
20,638,360
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements)
|
NEW ENERGY TECHNOLOGIES, INC.
|
(A Development Stage Company)
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)(Unaudited)
|
FROM MAY 5, 1998 (INCEPTION) TO NOVEMBER 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
Deficit Accumulated
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Additional
|
|
|
Comprehensive
|
|
|
During
the
|
|
|
Comprehensive
|
|
|
Total
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in
Capital
|
|
|
Income
(Loss)
|
|
|
Development
Stage
|
|
|
Income
(Loss)
|
|
|
Equity
(Deficit)
|
|
Restricted common stock issued to related
parties for management services at $0.001 per share
|
|
|
3,000,000
|
|
|
$
|
3,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,000
|
|
Unrestricted common stock sales to third parties
at $0.40 per share
|
|
|
375,000
|
|
|
|
375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
150,000
|
|
Net loss for the
year ended August 31, 1998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,326
|
)
|
|
|
(12,326
|
)
|
|
|
(12,326
|
)
|
Balance, August 31, 1998
|
|
|
3,375,000
|
|
|
|
3,375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
(12,326
|
)
|
|
|
(12,326
|
)
|
|
|
140,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended August 31, 1999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(77,946
|
)
|
|
|
(77,946
|
)
|
|
|
(77,946
|
)
|
Balance, August 31, 1999
|
|
|
3,375,000
|
|
|
|
3,375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
(90,272
|
)
|
|
|
(77,946
|
)
|
|
|
62,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended August 31, 2000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,446
|
)
|
|
|
(12,446
|
)
|
|
|
(12,446
|
)
|
Balance, August 31, 2000
|
|
|
3,375,000
|
|
|
|
3,375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
(102,718
|
)
|
|
|
(12,446
|
)
|
|
|
50,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for year ended August 31,
2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,904
|
)
|
|
|
(12,904
|
)
|
|
|
(12,904
|
)
|
Balance, August 31, 2001
|
|
|
3,375,000
|
|
|
|
3,375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
(115,622
|
)
|
|
|
(12,904
|
)
|
|
|
37,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended August 31, 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54,935
|
)
|
|
|
(54,935
|
)
|
|
|
(54,935
|
)
|
Balance, August 31, 2002
|
|
|
3,375,000
|
|
|
|
3,375
|
|
|
|
149,625
|
|
|
|
-
|
|
|
|
(170,557
|
)
|
|
|
(54,935
|
)
|
|
|
(17,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted common stock issued at $.001 per share
to two related parties to satisfy outstanding management fees.
|
|
|
10,333,200
|
|
|
|
10,333
|
|
|
|
92,999
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
103,332
|
|
Net loss for the
year ended August 31, 2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(97,662
|
)
|
|
|
(97,662
|
)
|
|
|
(97,662
|
)
|
Balance, August 31, 2003
|
|
|
13,708,200
|
|
|
|
13,708
|
|
|
|
242,624
|
|
|
|
-
|
|
|
|
(268,219
|
)
|
|
|
(97,662
|
)
|
|
|
(11,887
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended August 31, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,787
|
)
|
|
|
(19,787
|
)
|
|
|
(19,787
|
)
|
Balance, August 31, 2004
|
|
|
13,708,200
|
|
|
|
13,708
|
|
|
|
242,624
|
|
|
|
-
|
|
|
|
(288,006
|
)
|
|
|
(19,787
|
)
|
|
|
(31,674
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended August 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103,142
|
)
|
|
|
(103,142
|
)
|
|
|
(103,142
|
)
|
Balance, August 31, 2005
|
|
|
13,708,200
|
|
|
|
13,708
|
|
|
|
242,624
|
|
|
|
-
|
|
|
|
(391,148
|
)
|
|
|
(103,142
|
)
|
|
|
(134,816
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock and warrants at $0.50 per
share
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
499,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000
|
|
Net loss for the
year ended August 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(157,982
|
)
|
|
|
(157,982
|
)
|
|
|
(157,982
|
)
|
Balance, August 31, 2006
|
|
|
14,708,200
|
|
|
|
14,708
|
|
|
|
741,624
|
|
|
|
-
|
|
|
|
(549,130
|
)
|
|
|
(157,982
|
)
|
|
|
207,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of Class A Warrants at $0.50 per share
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
499,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000
|
|
Exercise of Class B Warrants at $0.55 per share
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
549,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
550,000
|
|
Exercise of Class C Warrants at $1.50 per share
|
|
|
326,667
|
|
|
|
327
|
|
|
|
489,673
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
490,000
|
|
Exercise of Class D Warrants at $1.65 per share
|
|
|
293,333
|
|
|
|
293
|
|
|
|
483,707
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
484,000
|
|
Exercise of Class E Warrants at $1.80 per share
|
|
|
293,333
|
|
|
|
293
|
|
|
|
527,707
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
528,000
|
|
Issuance of common stock and warrants at $1.50 per
share
|
|
|
333,333
|
|
|
|
333
|
|
|
|
499,667
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000
|
|
Dividend paid - spin off of MircoChannel Technologies
Corporation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(400,000
|
)
|
|
|
-
|
|
|
|
(400,000
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,811
|
)
|
|
|
-
|
|
|
|
(1,811
|
)
|
|
|
(1,811
|
)
|
Net loss for the
year ended August 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,442,769
|
)
|
|
|
(1,442,769
|
)
|
|
|
(1,442,769
|
)
|
Balance, August 31, 2007
|
|
|
17,954,866
|
|
|
|
17,955
|
|
|
|
3,790,377
|
|
|
|
(1,811
|
)
|
|
|
(2,391,899
|
)
|
|
|
(1,444,580
|
)
|
|
|
1,414,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and warrants issued for cash and services
at $3.00 per Unit
|
|
|
1,225,000
|
|
|
|
1,225
|
|
|
|
3,394,730
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,395,955
|
|
Exercise of Class C Warrants at $1.50 per share
|
|
|
6,667
|
|
|
|
7
|
|
|
|
9,993
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
Exercise of Class D Warrants at $1.65 per share
|
|
|
6,667
|
|
|
|
7
|
|
|
|
10,993
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,000
|
|
Exercise of Class F Warrants at $3.75 per share
|
|
|
58,333
|
|
|
|
58
|
|
|
|
218,692
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
218,750
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
3,600,303
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,600,303
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,504
|
|
|
|
-
|
|
|
|
12,504
|
|
|
|
12,504
|
|
Net loss for the
year ended August 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,721,545
|
)
|
|
|
(5,721,545
|
)
|
|
|
(5,721,545
|
)
|
Balance, August 31, 2008
|
|
|
19,251,533
|
|
|
|
19,251
|
|
|
|
11,025,089
|
|
|
|
10,693
|
|
|
|
(8,113,444
|
)
|
|
|
(5,709,041
|
)
|
|
|
2,941,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of Class E Warrants at $1.80 per share
|
|
|
6,667
|
|
|
|
7
|
|
|
|
11,993
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,000
|
|
Exercise of Class F Warrants at $3.75 per share
|
|
|
275,333
|
|
|
|
275
|
|
|
|
1,032,225
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,032,500
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
183,312
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
183,312
|
|
Reversal of stock based compensation due to forfeiture
of stock options
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,591,093
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,591,093
|
)
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,693
|
)
|
|
|
-
|
|
|
|
(10,693
|
)
|
|
|
(10,693
|
)
|
Net loss for the
year ended August 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,961,175
|
|
|
|
1,961,175
|
|
|
|
1,961,175
|
|
Balance, August 31, 2009
|
|
|
19,533,533
|
|
|
|
19,533
|
|
|
|
8,661,526
|
|
|
|
-
|
|
|
|
(6,152,269
|
)
|
|
|
1,950,482
|
|
|
|
2,528,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
661,040
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
661,040
|
|
Reversal of stock based compensation due to forfeiture
of stock options
|
|
|
-
|
|
|
|
-
|
|
|
|
(478,971
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(478,971
|
)
|
Cumulative adjustment upon adoption of ASC 815-40
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,785,560
|
)
|
|
|
-
|
|
|
|
(342,771
|
)
|
|
|
-
|
|
|
|
(2,128,331
|
)
|
Net loss for the
year ended August 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(233,136
|
)
|
|
|
(233,136
|
)
|
|
|
(233,136
|
)
|
Balance, August 31, 2010
|
|
|
19,533,533
|
|
|
|
19,533
|
|
|
|
7,058,035
|
|
|
|
-
|
|
|
|
(6,728,176
|
)
|
|
|
(233,136
|
)
|
|
|
349,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding due to reverse one for three stock split
effective March 16, 2011
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercise of Class F Warrants at $3.75 per share
|
|
|
1,054,512
|
|
|
|
1,055
|
|
|
|
3,953,320
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,954,375
|
|
Exercise of stock options
|
|
|
50,318
|
|
|
|
50
|
|
|
|
30,750
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30,800
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
2,855,630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,855,630
|
|
Reversal of stock based compensation due to forfeiture
of stock options
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,304,551
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,304,551
|
)
|
Net loss for the
year ended August 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,619,750
|
)
|
|
|
(3,619,750
|
)
|
|
|
(3,619,750
|
)
|
Balance, August 31, 2011
|
|
|
20,638,360
|
|
|
|
20,638
|
|
|
|
12,593,184
|
|
|
|
-
|
|
|
|
(10,347,926
|
)
|
|
|
(3,619,750
|
)
|
|
|
2,265,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
237,046
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
237,046
|
|
Reversal of stock based compensation due to forfeiture
of stock options
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,948
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,948
|
)
|
Discount on convertible promissory note due to detachable
warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
547,050
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
547,050
|
|
Discount on convertible promissory note due to beneficial
conversion feature
|
|
|
-
|
|
|
|
-
|
|
|
|
452,950
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
452,950
|
|
Net loss for the
year ended August 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,433,431
|
)
|
|
|
(2,433,431
|
)
|
|
|
(2,433,431
|
)
|
Balance, August 31, 2012
|
|
|
20,638,360
|
|
|
|
20,638
|
|
|
|
13,798,282
|
|
|
|
-
|
|
|
|
(12,781,357
|
)
|
|
|
(2,433,431
|
)
|
|
|
1,037,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
33,215
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33,215
|
|
Reversal of stock based compensation due to forfeiture
of stock options
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,075
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,075
|
)
|
Net loss for the three months ended
November 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(407,462
|
)
|
|
|
(407,462
|
)
|
|
|
(407,462
|
)
|
Balance, November 30, 2012
|
|
|
20,638,360
|
|
|
$
|
20,638
|
|
|
$
|
13,821,422
|
|
|
$
|
-
|
|
|
$
|
(13,188,819
|
)
|
|
$
|
(407,462
|
)
|
|
$
|
653,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements)
|
NEW ENERGY TECHNOLOGIES, INC.
|
(A Development Stage Company)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011 AND FOR THE
|
PERIOD FROM INCEPTION (MAY 5, 1998) TO NOVEMBER 30, 2012
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
May 5, 1998
|
|
|
|
Three Months Ended November 30,
|
|
|
(Inception) to
|
|
|
|
2012
|
|
|
2011
|
|
|
November 30, 2012
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(407,462
|
)
|
|
$
|
(489,390
|
)
|
|
$
|
(12,041,741
|
)
|
Add: loss from discontinued operations
|
|
|
-
|
|
|
|
(135,461
|
)
|
|
|
(404,307
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,536
|
|
|
|
878
|
|
|
|
11,900
|
|
Stock based compensation expense
|
|
|
33,215
|
|
|
|
82,675
|
|
|
|
7,570,546
|
|
Reversal of stock based compensation expense due to forfeiture of stock options
|
|
|
(10,075
|
)
|
|
|
(8,243
|
)
|
|
|
(5,416,638
|
)
|
Change in fair value of warrant liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,128,331
|
)
|
Loss on disposal of fixed assets
|
|
|
-
|
|
|
|
-
|
|
|
|
5,307
|
|
Payable written off
|
|
|
-
|
|
|
|
-
|
|
|
|
(186,109
|
)
|
Common stock issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
3,000
|
|
Common stock issued for debt settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
103,332
|
|
Accretion of debt discount
|
|
|
15,796
|
|
|
|
-
|
|
|
|
16,311
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in deferred research and development costs
|
|
|
29,605
|
|
|
|
23,853
|
|
|
|
(2,990
|
)
|
Decrease (increase) in prepaid expenses and other current assets
|
|
|
4,137
|
|
|
|
30,130
|
|
|
|
(24,096
|
)
|
Increase (decrease) in accounts payable
|
|
|
(4,427
|
)
|
|
|
52,422
|
|
|
|
88,976
|
|
Increase (decrease) in accrued liabilities
|
|
|
17,910
|
|
|
|
(156,640
|
)
|
|
|
200,250
|
|
Net cash used in operating activities
|
|
|
(319,765
|
)
|
|
|
(599,776
|
)
|
|
|
(12,204,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activity
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of equipment
|
|
|
-
|
|
|
|
(20,299
|
)
|
|
|
(35,637
|
)
|
Net cash used in investing activity
|
|
|
-
|
|
|
|
(20,299
|
)
|
|
|
(35,637
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the issuance of common stock, exercise of warrants and stock options, net
|
|
|
-
|
|
|
|
-
|
|
|
|
12,367,380
|
|
Repayment of promissory note
|
|
|
-
|
|
|
|
-
|
|
|
|
(155,000
|
)
|
Proceeds from promissory notes
|
|
|
-
|
|
|
|
-
|
|
|
|
1,155,000
|
|
Dividend paid
|
|
|
-
|
|
|
|
-
|
|
|
|
(400,000
|
)
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
12,967,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
(319,765
|
)
|
|
|
(620,075
|
)
|
|
|
727,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,046,918
|
|
|
|
2,320,185
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
727,153
|
|
|
$
|
1,700,110
|
|
|
$
|
727,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid in cash
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12,393
|
|
Income taxes paid in cash
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued management fees converted to equity
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
103,332
|
|
Debt discount recorded for value of warrants issued
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
547,050
|
|
Debt discount recorded for beneficial conversion feature
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
452,950
|
|
Warrants issued for broker commissions
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
642,980
|
|
(The accompanying notes are an integral part of these consolidated financial statements)
|
NEW ENERGY TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Organization and Going Concern
Basis of Presentation
The unaudited financial
statements of New Energy Technologies, Inc. as of November 30, 2012, and for the three months ended November 30, 2012 and 2011,
have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting.
Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States
for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes
thereto for the year ended August 31, 2012, as filed with the Securities and Exchange Commission as part of the Company's Form
10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for
a fair presentation of the interim financial information have been included. The results of operations for any interim period are
not necessarily indicative of the results of operations for the entire year.
Organization
New Energy Technologies,
Inc. (the “Company”) was incorporated in the State of Nevada on May 5, 1998, under the name “Octillion Corp.”
On December 2, 2008, the Company amended its Articles of Incorporation to effect a change of name to New Energy Technologies, Inc.
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Sungen
Energy, Inc. (“Sungen”), Kinetic Energy Corporation (“KEC”), and New Energy Solar Corporation (“New
Energy Solar”).
Sungen was incorporated
on July 11, 2006, in the State of Nevada and is currently inactive.
KEC was incorporated
on June 19, 2008, in the State of Nevada and holds the patents related to the Company’s MotionPower™ Technology. The
Company’s business activities related to the MotionPower™ Technology are conducted through KEC.
New Energy Solar was
incorporated on February 9, 2009, in the State of Florida and has entered into a License Agreement, an Addendum to the License
Agreement, an Option Agreement and a Sponsored Research Agreement with the University of South Florida Research Foundation, Inc.
On March 16, 2011,
pursuant to the Consents, the Company filed a Certificate of Amendment to its Certificate of Incorporation increasing its authorized
shares of common stock, $0.001 par value, from 100,000,000 to 300,000,000.
On August 19, 2011,
the Company established Nakoda, a California corporation and wholly-owned subsidiary of the Company, which began operations in
September 2011. Nakoda is an energy savings and management corporation that provides a broad range of energy solutions and savings
projects with the goal of implementing energy conservation, load management, and reducing building energy consumption in target
markets. Due to the high costs associated with growing operations and difficult financing environment, management suspended all
Nakoda related operations as of November 30, 2011. On January 20, 2012, management completed the sale of Nakoda Energy, Inc. as
described pursuant to a Stock Purchase Agreement. The Company did not recognize any revenue from Nakoda related operations nor
were there any recorded assets or liabilities as of and during the periods presented.
The Company is a renewable
and alternative energy company, actively developing two novel technologies for generating sustainable electricity, one of which
harvests light energy from the sun and artificial sources, and the other harvests kinetic energy present in moving vehicles. The
Company’s proprietary, patent-pending technologies and products, which are the subjects of fifty-six (56) patent-filings,
have been invented, designed, engineered, and prototyped in preparation for further field testing, product development, and commercial
deployment.
The Company’s
SolarWindow™ Technology generates electricity when the electricity-generating coating is applied to glass surfaces, creating,
semi-transparent, see-through solar cells. If successfully developed, SolarWindow™ could potentially be used on any of the
more than 85 million commercial and residential buildings in the United States alone (U.S. Census Bureau, 2007 American Housing
Survey & U.S. Energy Information Administration, 2003 Commercial Buildings Energy Consumption Survey).
The Company’s MotionPower™ Technology
harvests the "kinetic" or "motion" energy of cars, trucks, buses, and heavy commercial vehicles when they pass
over the system or slow down before coming to a stop. MotionPower™ converts this captured energy into electricity. If successfully
developed, MotionPower™ could potentially be used to harvest kinetic energy generated by any of the estimated 250 million
vehicles registered in America (U.S. Department of Transportation Federal Highway Administration, 2008 Highway Statistics), which
drive approximately six billion miles on our nation’s roadways every day (U.S. Environmental Protection Agency).
The Company’s
product development programs involve ongoing research and development efforts, and the commitment of significant resources to support
the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by its contract
engineers, scientists, and consultants.
Going Concern
The
Company is a development stage company, does not have any commercialized products and has not generated any revenue since inception.
The Company has an accumulated deficit
of $13,188,819
as of November 30, 2012, and does not have
positive cash flows from operating activities. The accompanying consolidated financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as
a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business.
In its report with
respect to the Company’s financial statements for the year ended August 31, 2012, the Company’s independent auditors
expressed substantial doubt about the Company’s ability to continue as a going concern. Because the Company has not yet generated
revenues from its operations and does not expect to do so in the near future, its ability to continue as a going concern is wholly
dependent upon its ability to obtain additional financing. Currently, the Company is seeking additional financing but has no commitments
to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable
to the Company, if at all.
As of November 30,
2012, the Company had cash and cash equivalents of $727,153. The Company will remain engaged in research and product development
activities at least through February, 2013. Based upon its current and near term anticipated level of operations and expenditures,
the Company believes that, absent any modification or expansion of its existing research, development and testing activities, cash
on hand should be sufficient to enable it to continue operations through March 2013. However, any significant expansion in scope
or acceleration in timing of the Company’s current research and development activities, or commencement of any marketing
and sales activities, will require additional funds.
If adequate funds are
not available on reasonable terms or at all, it would result in a material adverse effect on the Company’s business, operating
results, financial condition and prospects. In particular, the Company may be required to delay, reduce the scope of or terminate
one or more of its research programs, sell rights to its SolarWindow™ Technology and/or MotionPower
TM
Technology
or other technologies or products based upon such technologies, or license the rights to such technologies or products on terms
that are less favorable to the Company than might otherwise be available.
In view of these conditions,
the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level
of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. These consolidated financial
statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern
and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at
amounts different from those reflected in the accompanying consolidated financial statements.
NOTE 2 - Accounts Payable
At November 30, 2012,
accounts payable totaling $58,976 consisted of $33,221 of professional services and $25,755 of trade payables. Accrued liabilities
consisted of $44,141 of accrued interest on the Company's $1,000,000 outstanding bridge Loan agreement dated April 17, 2012.
At August 31, 2012,
accounts payable totaling $63,403 consisted of $24,863 of professional services and $38,540 of trade payables. Accrued liabilities
consisted of $26,231 of accrued interest on the Company's $1,000,000 outstanding bridge Loan agreement dated April 17, 2012.
NOTE 3 - Convertible Promissory Note
On April 17, 2012,
the Company entered into a Bridge Loan Agreement (the “Loan Agreement”) with 1420524 Alberta Ltd. (the “Creditor”)
pursuant to which the Company borrowed $1,000,000 at an annual interest rate of 7% (the “Loan”), compounded quarterly;
following the occurrence of an event of default, as further specified in the Loan Agreement, the annual interest rate would increase
to 15%. The Loan was evidenced by a promissory note with a maturity date of the earlier of: (a) the closing of any equity financing
by us in excess of $1,000,000, or (b) April 16, 2013. As a condition to the Creditor’s entry into the Loan Agreement, we
issued the Creditor 625,000 Series G Stock Purchase Warrants (the “Series G Warrants”), which are exercisable through
April 17, 2016, with an initial exercise price of 84% of the average of the closing price for our common stock as reported on the
OTCQB for the five trading days immediately preceding the closing of the Loan, or $1.92 per share, subject to adjustment as provided
therein. Additionally, the Series G Warrants contain a cashless exercise provision and require us to file a registration statement
with the SEC for the shares issuable upon exercise of the Series G Warrants within 60 days receipt of a written request by the
Creditor. The Creditor may elect, in its sole discretion, to convert all or any portion of the outstanding principal amount of
the Loan, and any or all accrued and unpaid interest thereon into shares of our common stock at an initial fixed conversion price
equal to seventy (70%) percent of the average of the closing price for the Company’s common stock as reported on the OTCQB
for the five trading days immediately preceding the closing of the Loan, or $1.60 per share subject to adjustment as provided therein.
The Company first
allocated between the Loan and the warrants based upon their relative fair values. The estimated fair value of the warrants issued
with the Loan of $1,207,750 was calculated using the Black-Scholes option pricing model and the following assumptions: market price
of common stock - $2.12 per share; estimated volatility - 167%; risk free interest rate - 0.88%; expected dividend rate - 0% and
expected life - 3.0 years. This resulted in allocating $547,050 to the warrants and $452,950 to the Loan.
Next, the intrinsic
value of the beneficial conversion feature was computed as the difference between the fair value of the common stock issuable upon
conversion of the Loan and the total price to convert based on the effective conversion price. The calculated intrinsic value was
$872,050. As this amount resulted in a total debt discount that exceeds the loan proceeds, the amount recorded for the beneficial
conversion feature was limited to $452,950. The resulting $1,000,000 discount to the Loan is being accreted over the one year term
of the Loan using the effective interest method.
During the three months
ended November 30, 2012, the Company recognized $17,910 of interest expense related to this Note and $15,796 of accretion related
to the debt discount. The remaining debt discount of $983,689 will be amortized through April 16, 2013 with $499,501 recorded during
the quarter ended February 28, 2013 and $484,188 recorded during the quarter ended May 31, 2013.
NOTE 4 - SolarWindow
™
Technology
Stevenson-Wydler Cooperative Research
and Development Agreement with the Alliance for Sustainable Energy
On March 18, 2011,
in efforts to advance the commercial development of the SolarWindow™ Technology, the Company entered into a Stevenson-Wydler
Cooperative Research and Development Agreement (the “CRADA”) with the Alliance for Sustainable Energy, LLC, which is
the operator of The National Renewable Energy Laboratory (“NREL”) under its U.S. Department of Energy contract. Under
terms of the CRADA, NREL researchers will make use of the Company’s exclusive intellectual property and NREL’s background
intellectual property in order to work towards specific product development goals.
Pursuant to the CRADA,
during the three months ended November 30, 2012 and 2011, we recorded $0 and $33,668, respectively, as research and development
expense. From inception (May 5, 1998) to November 30, 2012, the Company recorded $287,079 as research and development expense.
University of South Florida Research
Foundation, Inc. License Agreement, Option Agreement and Sponsored Research Agreement
Through New Energy
Solar, we are a party to a License Agreement, an Addendum to the License Agreement, an Option Agreement and a Sponsored Research
Agreement with the University of South Florida Research Foundation, Inc. These agreements provide for the Company's support of
a project relating to the development of the SolarWindow™ Technology and grant it an exclusive worldwide commercial license
under certain patents relating to the SolarWindow™ Technology.
On July 5, 2011, the
Company entered into a letter agreement pursuant to which it agreed to reimburse the University of South Florida (“USF”)
for filing fees associated with USF’s Provisional Patent and future PCT Applications (the “Applications”) for
certain identified technologies (the “Letter Agreement”). Pursuant to the terms of the Letter Agreement, the Company
committed to reimburse USF for all documented, out-of-pocket costs directly related to the filing and maintenance of the Applications.
In return, USF granted the Company the exclusive right to negotiate a definitive option or license agreement with USF for the technologies
underlying the Applications for a period of time after USF files a Provisional Patent for an identified technology (the “Negotiation
Period”). Should the Negotiation Period expire without us entering into an agreement with USF, the Company could extend the
Negotiation Period for an additional period of time by paying USF a one-time payment of a specified sum. If after this additional
time the Company fails to enter into an agreement with USF, USF is free to enter into negotiations and license the underlying technologies
to a third-party. The USF Research Foundation, Inc. granted the lead USF research scientist authorization to enter into discussions
with the Company to extend the date of the Sponsored Research Agreement. The Company anticipates the date of the Agreement
will be extended until March 31, 2013.
During the three months
ended November 30, 2012 and 2011, and from inception (May 5, 1998) to November 30, 2012, the Company recorded the following as
research and development and patent related expense pursuant to these agreements:
|
|
Three Months Ended November 30,
|
|
|
May 5, 1998
(Inception) to
|
|
|
|
2012
|
|
|
2011
|
|
|
November 30, 2012
|
|
University of South Florida:
|
|
|
|
|
|
|
|
|
|
Research and development expense
|
|
$
|
29,606
|
|
|
$
|
17,853
|
|
|
$
|
438,159
|
|
Patent and PCT application expense
|
|
|
4,643
|
|
|
|
6,754
|
|
|
|
53,847
|
|
Total
|
|
$
|
34,249
|
|
|
$
|
24,607
|
|
|
$
|
492,006
|
|
NOTE 5 - MotionPower™ Technology
Sigma Design Agreement
Through KEC, the Company
continues to be a party to consulting agreements with Sigma Design Company, a Middlesex, New Jersey based engineering and design
firm, pursuant to which Sigma Design provides ongoing engineering, product development and testing services primarily relating
to the development of the MotionPower™ technology.
During the three months
ended November 30, 2012 and 2011, the Company recorded $16,336 and $74,137, respectively, as research and development expense pursuant
to these agreements. F
rom inception (May 5, 1998) to
November 30
,
2012,
the Company recorded $744,234 as research and development expense pursuant to these agreements. The Company
continues to utilize Sigma Design Company on a consulting basis to further test, calibrate, and develop the MotionPower™
technology.
NOTE 6 - Stock Options
On
October 10, 2006, the Company's Board of Directors (the "Board") adopted and approved the 2006 Incentive Stock Option
Plan (the “2006 Stock Plan”) that provides for the grant of stock options to employees, directors, officers and consultants.
Stock option grants vest over two to five years and expire ten years after the date of grant.
Stockholders previously approved
5,000,000 shares for grant under the 2006 Plan, of which
4,064,995
remain available for grant
at
November 30, 2012. The Company does not repurchase shares to fulfill the requirements of options
that are exercised. The Company issues new shares when options are exercised.
The
Company measures all stock-based compensation based on the fair value on the grant date using the
using the
Black-Scholes-Merton
formula
and recognizes expense over the requisite service period.
The
Black-Scholes
model
requires management to make assumptions
regarding option time to expiration, expected volatility,
and risk-free interest rates, all of which have a significant impact on the fair value of the option.
The risk-free interest
rate is based on the U.S. Treasury yield curve in effect at the time of grant for a bond with a similar term. The Company does
not anticipate declaring dividends in the foreseeable future. Volatility is calculated based on the historical closing stock prices.
The Company uses the “simplified” method for determining the expected term of its “plain vanilla” stock
options. The Company recognizes compensation expense for only the portion of stock options that are expected to vest. Therefore,
the Company applies an estimated forfeiture rate that is derived from historical employee termination data and adjusted for expected
future employee turnover rates. If the actual number of forfeitures differs from those estimated by the Company, additional adjustments
to compensation expense may be required in future periods.
A summary of the Company’s
stock option activity for the three months ended November 30, 2012 and the years ended August 31, 2012 and 2011, and related information
follows:
|
|
Number of Options
|
|
|
Weighted Average Exercise Price ($)
|
|
Weighted Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value ($)
|
|
|
|
|
|
|
|
|
|
|
Outstanding at August 31, 2010
|
|
|
900,003
|
|
|
1.71
|
|
|
|
|
Grants
|
|
|
610,002
|
|
|
5.97
|
|
|
|
|
Exercises
|
|
|
(73,334
|
)
|
|
1.61
|
|
|
|
|
Forfeitures
|
|
|
(476,666
|
)
|
|
5.59
|
|
|
|
|
Outstanding at August 31, 2011
|
|
|
960,005
|
|
|
2.49
|
|
|
|
|
Forfeitures
|
|
|
(98,334
|
)
|
|
5.93
|
|
|
|
|
Outstanding at August
31, 2012
|
|
|
861,671
|
|
|
2.10
|
|
|
|
|
Forfeitures
|
|
|
(5,000
|
)
|
|
3.27
|
|
|
|
|
Outstanding at November 30
, 2012
|
|
|
856,671
|
|
|
2.09
|
|
7.06 years
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at November 30
, 2012
|
|
|
385,666
|
|
|
2.39
|
|
6.36 years
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
Available for grant at November 30
, 2012
|
|
|
4,064,995
|
|
|
|
|
|
|
|
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 fiscal 2012 and the exercise price, multiplied by the
number of shares) that would have been received by the option holders had all option holders exercised their options on November
30, 2012. 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 $0.81 on November 30, 2012 and no outstanding options have an exercise price below $1.32 per share,
as of November 30, 2012, there is no intrinsic value to our outstanding stock options.
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 Consolidated Statements of Operations for the three months ended November 30, 2012 and 2011, and from May
5, 1998 (inception) to November 30, 2012:
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
Three Months Ended
|
|
|
May 5, 1998
|
|
|
|
November 30,
|
|
|
(Inception) to
|
|
|
|
2012
|
|
|
2011
|
|
|
November 30, 2012
|
|
Stock Compensation Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling general and administrative expense
|
|
$
|
23,140
|
|
|
$
|
74,432
|
|
|
$
|
2,153,908
|
|
As of November 30,
2012, the Company had $93,551 of unrecognized compensation cost related to unvested stock options which is expected to be recognized
over a period of 2.75 years.
Stock Option Activity During the Three Months Ended November
30, 2012
On December 10, 2012,
Mr. Peter Fusaro resigned from the Board. As a result of his resignation, Mr. Fusaro forfeited 5,000 unvested stock options and
had vested 11,667 stock options. Total stock based compensation expense related to Mr. Fusaro's options was $48,850 of which $44,270
was expensed through August 31, 2012. On November 30, 2012, the Company reversed $10,075 of expense related to forfeited options
on which expense was previously recorded resulting in total recognized expense related to Mr. Fusaro's options of $34,195. Mr.
Fusaro has until December 10, 2014, to exercise his 11,667 vested stock options.
Stock Option Activity During the Years Ended August 31,
2012
On December 8, 2011, Mr. Todd Pitcher
resigned from the Board. Mr. Pitcher had vested 6,667 stock options and forfeited 10,000 unvested stock options.
During
the year ended August 31, 2011, the Company recorded stock based compensation of $27,784
for the amortization of the fair
value of his stock option. Since the stock option was forfeited prior to 10,000 options vesting, $8,243 previously recognized for
stock
based
compensation was reversed on November 30, 2011, resulting in total stock
based
compensation expense related to Mr. Pitcher’s stock option grant of $19,541. Mr. Pitcher has until December 8, 2013,
to exercise his 6,667 vested stock options.
On
August
12, 2012, 83,334 vested options held by Mr. Andrew Farago, the Company's former Chief Operating Officer expired unexercised.
On September 30, 2012,
Mr. Javier Jimenez resigned from the Board. As a result of his resignation, Mr. Jimenez forfeited 5,000 unvested stock options
and had vested 11,667 stock options.
During the years ended August 31, 2012 and 2011, the Company recorded
stock based compensation of $66,252 and $25,528, respectively
for the amortization of the fair value of his stock option
of which
$9,117 and $14,588 relate to the forfeited options
. Since the stock option was forfeited
prior to 5,000 options vesting, $23,705 previously recognized for stock
based
compensation was
reversed on August 31, 2012, resulting in total stock
based
compensation expense related to Mr.
Jimenez's stock option grant of $68,075. Mr. Jimenez has until September 30, 2014, to exercise his 11,667 vested stock options.
The following table
summarizes information about stock options outstanding and exercisable at November 30, 2012:
|
|
|
Stock Options Outstanding
|
|
|
Stock Options Exercisable
|
|
|
|
|
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
|
Weighted Average
|
|
|
Weighted
|
|
Range of
|
|
|
Number of
|
|
|
Average
|
|
|
Average
|
|
|
Number
|
|
|
Remaining
|
|
|
Average
|
|
Exercise
|
|
|
Options
|
|
|
Contractural
|
|
|
Exercise
|
|
|
of Options
|
|
|
Contractual
|
|
|
Exercise
|
|
Prices
|
|
|
Outstanding
|
|
|
Life (years)
|
|
|
Price
|
|
|
Exercisable
|
|
|
Life (Years)
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.32
|
|
|
|
50,001
|
|
|
|
2.04
|
|
|
$
|
1.32
|
|
|
|
50,001
|
|
|
|
2.04
|
|
|
$
|
1.32
|
|
$
|
1.65
|
|
|
|
666,667
|
|
|
|
7.70
|
|
|
$
|
1.65
|
|
|
|
233,333
|
|
|
|
7.70
|
|
|
$
|
1.65
|
|
$
|
2.50
|
|
|
|
10,000
|
|
|
|
8.35
|
|
|
$
|
2.50
|
|
|
|
4,000
|
|
|
|
8.35
|
|
|
$
|
2.50
|
|
$
|
2.55
|
|
|
|
33,334
|
|
|
|
5.78
|
|
|
$
|
2.55
|
|
|
|
19,998
|
|
|
|
5.78
|
|
|
$
|
2.55
|
|
$
|
3.27
|
|
|
|
18,334
|
|
|
|
1.74
|
|
|
$
|
3.27
|
|
|
|
18,334
|
|
|
|
1.74
|
|
|
$
|
3.27
|
|
$
|
4.98
|
|
|
|
16,667
|
|
|
|
5.28
|
|
|
$
|
4.98
|
|
|
|
13,332
|
|
|
|
5.28
|
|
|
$
|
4.98
|
|
$
|
5.94
|
|
|
|
50,001
|
|
|
|
8.07
|
|
|
$
|
5.94
|
|
|
|
35,001
|
|
|
|
8.07
|
|
|
$
|
5.94
|
|
$
|
6.51
|
|
|
|
11,667
|
|
|
|
1.83
|
|
|
$
|
6.51
|
|
|
|
11,667
|
|
|
|
1.83
|
|
|
$
|
6.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
856,671
|
|
|
|
7.06
|
|
|
$
|
2.09
|
|
|
|
385,666
|
|
|
|
6.36
|
|
|
$
|
2.39
|
|
NOTE 7 - Net Loss Per Share
During the three months
ended November 30, 2012 and 2011, the Company recorded a net loss. Basic net loss per share is computed by dividing the net
loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects of
warrants, stock options and convertible debt on net loss per share for the past two fiscal years because to do so would be antidilutive.
Excluded from the computation of diluted net loss per share for the three months ended November 30, 2012, are stock options to
acquire 856,671 shares of common stock with a weighted-average exercise price of $2.10 per share, warrants to acquire 625,000 shares
of common stock with a weighted-average exercise price of $1.92 per share and convertible debt convertible into 625,000 shares
of common stock upon conversion with a conversion price of $1.60 per share. Excluded from the computation of diluted net loss per
share for the three months ended November 30, 2011, are stock options to acquire 950,005 shares of common stock with a weighted-average
exercise price of $2.48 per share.
Following is the computation
of basic and diluted net loss per share for the three months ended November 30, 2012 and 2011:
|
|
Three Months Ended
|
|
|
|
November 30,
|
|
|
|
2012
|
|
|
2011
|
|
Basic and Diluted EPS Computation
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Loss available to common stockholders'
|
|
$
|
(407,462
|
)
|
|
$
|
(624,851
|
)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
20,638,360
|
|
|
|
20,638,360
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted EPS
|
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
NOTE 8 - Related Party Transactions
A related party is
generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii)
the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control
with the Company, or (iv) anyone 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.
For services rendered
in the capacity of a Board member, non-employee Board members receive $3,750 per quarter. New Board member compensation is pro
rated in their first quarter. During the three months ended November 30, 2012 and 2011, the Company incurred $18,750 and $29,100,
respectively in cash based Board compensation. Additionally, the Company recognized stock
based
compensation
expense related to stock options granted
for services rendered by non-employee directors of the Company
during the three months
ended November 30, 2012
and 2011 of
$1,348
and $43,392, respectively.
March 21, 2011, Todd
Pitcher was elected to the Board. Mr. Pitcher and the Company also entered into an Advisory Engagement Agreement. On December 8,
2011, Mr. Pitcher resigned from the Board and ceased performing services for the Company. The Company paid Mr. Pitcher $30,000
upon receipt of an executed Mutual Termination and Release.
The law firm of Sierchio
& Company, LLP, of which Joseph Sierchio, one of the Company's directors, is a principal, has provided counsel to the Company
since its inception. In July 2008, the Company asked Mr. Sierchio to join the Company's Board. During the three months ended November
30, 2012 and 2011, the law firm of Sierchio & Company, LLP provided $24,421 and $62,175, respectively, of legal services. At
November 30, 2012, the Company owed Sierchio & Company LLP $10,683 which is included in accounts payable.
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 9 -
Subsequent
Events
On December 20, 2012, the Company granted
15,000 options and approved the vesting of 2,500 options. The fair value of the 17,500 options is $17,325. 10,000 of the options
vest immediately with the remaining 7,500 options vesting on December 20, 2013.
I
tem
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 reports filed 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 “New Energy” refer to New Energy Technologies, Inc., a Nevada corporation, and its consolidated
subsidiaries.
Overview
We were incorporated
in the State of Nevada on May 5, 1998, under the name “Octillion Corp.” On December 2, 2008, we amended our Articles
of Incorporation to effect a change of name to New Energy Technologies, Inc. The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Sungen, KEC and New Energy Solar. Sungen was incorporated
on July 11, 2006, in the State of Nevada and is currently inactive. KEC was incorporated on June 19, 2008, in the State of Nevada
and holds the patents related to our MotionPower™ technology. Our business activities related to the MotionPower™ Technology
are conducted through KEC. New Energy Solar was incorporated on February 9, 2009, in the State of Florida and has entered into
a License Agreement, an Addendum to the License Agreement, an Option Agreement and a Sponsored Research Agreement with the University
of South Florida Research Foundation, Inc.
We are a development
stage renewable and alternative energy company developing two (2) sustainable electricity generating systems. These novel technologies
are branded as SolarWindow™ and MotionPower™. Our proprietary, patent-pending technologies are the subject of fifty-six
(56) US and international Patent filings. Our SolarWindow™ Technology provides the ability to harvest light energy from the
sun and artificial sources and generate electricity from a see-through, semi-transparent, coating of OPV solar cells. Our SolarWindow™
Technology is the subject of eleven (11) patent filings. Our MotionPower™ Technology, harvests “kinetic” or “motion”
energy from vehicles when they slow down before coming to a stop and converts this captured energy into electricity. Our MotionPower™
Technology is the subject of forty-five (45) patent filings.
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 research and 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.
Ultimately, we plan
to market any SolarWindow™ Technology and/or MotionPower™ Technology products through co-marketing, co-promotion, licensing
and distribution arrangements with third party collaborators. We believe that this approach could provide immediate access to pre-existing
distribution channels, therefore potentially increasing market penetration and commercial acceptance of our products and enabling
us to avoid expending significant funds for development of a large sales and marketing organization.
We cannot accurately
predict the amount of funding or the time required to successfully commercialize either the SolarWindow™ Technology or the
MotionPower™ 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 development efforts, the cost of developing, acquiring, or licensing various
enabling technologies, changes in the focus and direction of our research and development programs, competitive and technological
advances, the cost of filing, prosecuting, defending and enforcing claims with respect to patents, the regulatory approval process
and 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.
As of November 30,
2012, we had working capital of $634,811. Based upon our current level of operations and expenditures, we believe that, absent
any modification or expansion of our existing research, development and testing, cash on hand should be sufficient to enable us
to continue operations through at least March 2013. However, any significant expansion in scope or acceleration in time of our
current research and development activities, or commencement of any marketing activities, will require additional funds.
Research and Related Agreements
We are a party to certain
agreements related to the development of our SolarWindow™ Technology and our MotionPower™ Technology. These agreements,
and certain effects of these agreements on our financial statements for the periods presented in this prospectus, are summarized
in the notes to our financial statements, see
NOTE 4 - SolarWindow™ Technology
and
NOTE 5 - MotionPower™ Technology
above.
Results of Operations
Three Months Ended November 30, 2012 Compared with the
Three Months Ended November 30, 2011
Operating Expenses
A summary of our operating expense for the
three months ended November 30, 2012 and 2011 follows:
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
November 30,
|
|
|
Increase /
|
|
|
Percentage
|
|
|
|
2012
|
|
|
2011
|
|
|
(Decrease)
|
|
|
Change
|
|
Operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
$
|
278,391
|
|
|
$
|
440,843
|
|
|
$
|
(162,452
|
)
|
|
|
-37
|
%
|
Research and development
|
|
|
72,225
|
|
|
|
130,192
|
|
|
|
(57,967
|
)
|
|
|
-45
|
%
|
Stock compensation
|
|
|
23,140
|
|
|
|
74,432
|
|
|
|
(51,292
|
)
|
|
|
-69
|
%
|
Total operating expense
|
|
$
|
373,756
|
|
|
$
|
645,467
|
|
|
$
|
(271,711
|
)
|
|
|
-42
|
%
|
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. The $162,452 year-over-year decrease is primarily due to a $105,020 decrease in patent related legal and
filing fees, $50,965 decrease in legal, accounting and board fees, $17,483 decrease in travel and entertainment costs and $13,146
decrease in other general and administrative costs offset by a $24,162 increase in personnel related costs as a result of higher
headcount.
Stock Compensation
Stock compensation
represents the expense associated with the amortization of our stock options. During the three months ended November 30, 2012,
stock compensation expense decreased $51,292 to $23,140 compared to $74,432 during the three months ended November 30, 2011. As
of November 30, 2012, there is $93,551 remaining to be expensed through 2015 related to the currently outstanding stock options.
Research and Development
Research
and development (“R&D”) costs represent costs incurred to develop our
SolarWindow™ and MotionPower™
technologies
and are incurred pursuant to our research agreements and agreements with other third party
providers. Payments under these agreements include salaries and benefits for R&D personnel, allocated overhead and facility
occupancy costs, contract services and other costs. R&D costs are expensed when incurred, except for nonrefundable advance
payments for future research and development activities which are capitalized and recognized as expense as the related services
are performed.
See “Research and Related Agreements” above for disclosure regarding the terms and amounts incurred
under our research agreements.
The amount of R&D
expense incurred for our various research related agreements follows:
|
|
|
|
Three Months Ended
|
|
|
May 5, 1998
|
|
|
|
Development
|
|
November 30,
|
|
|
(Inception) to
|
|
|
|
Activity
|
|
2012
|
|
|
2011
|
|
|
November 30, 2012
|
|
University of Illinois
|
|
Solar Window
TM
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
422,818
|
|
Alliance for Sustainable Energy, LLC
|
|
Solar Window
TM
|
|
|
-
|
|
|
|
33,668
|
|
|
|
287,079
|
|
University of South Florida
|
|
Solar Window
TM
|
|
|
29,606
|
|
|
|
17,853
|
|
|
|
438,159
|
|
Sigma Design Company, LLC
|
|
Motion Power
TM
|
|
|
16,336
|
|
|
|
74,137
|
|
|
|
744,234
|
|
Veryst Engineering LLC
|
|
Motion Power
TM
|
|
|
-
|
|
|
|
2,564
|
|
|
|
560,880
|
|
Allocated costs
|
|
|
|
|
26,283
|
|
|
|
1,970
|
|
|
|
209,194
|
|
|
|
|
|
$
|
72,225
|
|
|
$
|
130,192
|
|
|
$
|
2,662,364
|
|
R&D costs decreased
by $57,967 due to the phase of technology development associated with Cooperative Research and Development Agreement (CRADA) conducted
at the Stevenson-Wydler with the Alliance for Sustainable Energy, LLC, which is the operator of The National Renewable Energy Laboratory
under its U.S. Department of Energy contract, and the Sigma Design Company, LLC agreement.
Other Income (Expense)
A summary of our other
income (expense) for the three months ended November 30, 2012 and 2011 follows:
|
|
Three Months Ended
|
|
|
|
|
|
|
November 30,
|
|
|
Increase/
|
|
|
|
2012
|
|
|
2011
|
|
|
(Decrease)
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense-other
|
|
$
|
(17,910
|
)
|
|
$
|
-
|
|
|
$
|
(17,910
|
)
|
Interest expense - accretion of debt discount
|
|
|
(15,796
|
)
|
|
|
-
|
|
|
|
(15,796
|
)
|
Foreign exchange loss
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
32
|
|
Payable written off
|
|
|
-
|
|
|
|
156,109
|
|
|
|
(156,109
|
)
|
Total other income (expense)
|
|
$
|
(33,706
|
)
|
|
$
|
156,077
|
|
|
$
|
(189,783
|
)
|
Interest Expense
Interest expense of
$17,910 relates to the 7% stated interest of the April 17, 2012 Bridge Loan. Interest expense - accretion of debt discount also
relates to the April 17, 2012, Bridge Loan and represents the accretion of the discount applied to the loan as a result of the
issuance of 625,000 detachable warrants and the beneficial conversion feature contained in the Bridge Loan and is calculated according
to the effective interest method.
Payable written off
Through our wholly-owned
subsidiary, Sungen Energy, Inc., we were a party to a Sponsored Research Agreement with the UIUC that provided for our support
of the development of a new technology to integrate films of silicon nanoparticle material on glass substrates. This agreement
expired on August 22, 2008. As of such date, we had advanced a total of $266,709 to UIUC pursuant to the terms of the agreement.
Pursuant to the terms of the agreement, we were to advance an additional $156,109 UIUC, which is included in other accrued liabilities
at August 31, 2011. We had not made the advance pending determination as to whether funds previously paid to UIUC under the terms
of the agreement had been fully expended. We were of the opinion that to the extent these funds were not expended by UCIC, we were
not obligated to make any further payments to UCIC. During the year ended August 31, 2012, we evaluated the status of the aforementioned
agreement and related contingent liability to UIUC and determined that the $156,109 liability is no longer valid and has been reclassified
to other income.
Discontinued Operations
On August 19, 2011,
we established Nakoda, a California corporation and wholly-owned subsidiary of the Company, which began operations in September
2011. Nakoda was an energy savings and management corporation that provided a broad range of energy solutions and savings projects
with the goal of implementing energy conservation, load management, and reducing building energy consumption in target markets.
In January
, 2012,
we divested ourselves of Nakoda due to the high costs associated with growing
operations and difficult financing environment resulting in a loss of $135,461 recorded as discontinued operations for the three
months ended November 30, 2011.
Liquidity and Capital Resources
The accompanying financial
statements have been prepared assuming we will continue as a going concern. We have an accumulated deficit of $13,188,819 through
November 30, 2012. Due to the “start-up” nature of our business, we expect to incur losses as we continue development
of our photovoltaic and energy harvesting technologies and expand. These conditions raise substantial doubt about our ability to
continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate,
additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order
to expand the range and scope of its business operations. We will seek access to private or public equity but there is no assurance
that such additional funds will be available for us to finance our operations on acceptable terms, if at all. If we are unable
to raise additional capital or generate positive cash flow, it is unlikely that we will be able to continue as a going concern.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our principal source
of liquidity is cash in the bank. At November 30, 2012, we had a cash and cash equivalent balance of $727,153. We have financed
our operations primarily pursuant to a securities purchase agreement in which we received net proceeds of $3,395,955 in February
2008, from the exercise of warrants and stock options and $1,000,000 of proceeds from a bridge loan on April 17, 2012.
Net cash used in operating
activities was $319,765 for the three months ended November 30, 2012, compared to net cash used in operating activities of $599,776
for the three months ended November 30, 2011. The decrease in cash used in operating activities, excluding the loss from discontinued
operations of $135,461, substantially reflects decreases in amounts paid for research and selling, general and administrative costs.
Net
cash used by investing activities was $0 and $20,299 for the three months ended November 30, 2012 and
2011, respectively.
No cash was provided
by financing activities during the three months ended November 30, 2012 or 2011.
Other Contractual Obligations
In addition to our
contractual obligations under the research agreements, as of November 30
, 2012
, we have future
minimum lease payments of $1,100 each month under our corporate and other office operating leases. In addition, we have future
minimum payments totaling $13,000 pursuant to agreements with third party providers that we utilize for investor and public relations
and marketing and business development.
Off-Balance Sheet Arrangements
We have no off-balance
sheet arrangements.
Recently Issued Accounting Pronouncements
We review new accounting
standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year
may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of
the new standards will have a significant impact on our consolidated financial statements.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision
and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by
this quarterly report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of November
30, 2012 that our disclosure controls and procedures were effective such that the information required to be disclosed in our United
States Securities and Exchange Commission (the “SEC”) reports is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control over Financial Reporting
There were no changes in our internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered
by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibit No.
|
Description of Exhibit
|
|
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
|
32.1
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
____________________
*Filed herewith
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
New Energy Technologies, Inc.
|
|
(Registrant)
|
|
|
|
|
|
|
January 14, 2013
|
By
|
/s/ John A. Conklin
|
|
|
John A. Conklin
|
|
|
Chief Executive Officer, Chief Financial Officer and Director
|
|
|
(Principal Executive Officer, Principal Financial Officer, and
|
|
|
Principal Accounting Officer)
|
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