Solarwindow Technologies Inc (OTCMKTS:WNDW) Reverses Its Direction and Crashes
At the end of Monday’s trading the stock of Solarwindow Technologies Inc (OTCMKTS:WNDW) was sitting at $3.46 per share after the record since the start of 2014 number of 864 thousand shares got traded. In our articles, however, we repeatedly warned you to be extremely careful when approaching the stock because such valuations were nothing short of absolutely unrealistic.
And yesterday the stock suffered a rude awakening call when it crashed by nearly 19% and closed at $2.81. This time the daily volume was even bigger with close to 1.5 million shares changing hands. Even after such a severe loss WNDW still commands a market cap of $74 million.
It is true that WNDW are developing a promising piece of technology and that the hype created by the announcement of the webcast taking place on August 20 when the company will share exactly how and when it plans to bring their product to market caused investor to flock towards the stock in droves. The red flags surrounding WNDW, however, are still as serious as ever.
Let’s start with the last reported financials. The quarterly for the period ending May 31 showed that WNDW‘s financial state is not exactly confidence-inspiring:
• $69 169 cash
• $247 thousand current assets
• $2.4 million current liabilities
• ZERO revenues
• $1.5 million net loss
The company has been raising some funds through the exercise of its outstanding warrants but even with the $765 thousand boost from the exercise of 921,875 Series H Warrants its financials remain extremely underwhelming.
Not to mention that the Series H Warrants have an exercise price of just $0.83 allowing their owners to receive shares priced more than three times lower than yesterday’s closing price. As a whole at the end of May WNDW had nearly 8.8 million outstanding warrants with prices ranging from $0.64 to $1.37. In addition, back in October 2013 WNDW received the sum of $3 million by issuing a convertible promissory note. This note can be converted into units priced at the lesser of $1.37 or 70% of the 20 day average closing price of the stock prior to conversion. Each unit consists of 1 common share and one Series L Warrant.
Another serious issue is the fact that apparently WNDW is being touted through a landing page created by the entity The Cheap Investor. Although the disclaimer at the bottom of the page states that the current promo is not being compensated in the past Core Capital Media LLC, the publisher of The Cheap Investor newsletter, has received some substantial sums from WNDW for investor relation services – $508 thousand for the fiscal 2014 and $31 thousand for one month in 2015.
In the days leading to the webcast WNDW is undoubtedly going to remain a highly volatile choice for trading. Do extensive due diligence and adjust your position in the stock accordingly.
