Dragni Dragnev

Solarwindow Technologies Inc. (OTCMKTS:WNDW)'s Corrections Continue

by Dragni Dragnev July 18, 2016

Solarwindow Technologies Inc. (OTCMKTS:WNDW, WNDW message board) got another 31% cut off its market value on Friday – but will today's session be any better?

Let's put it this way – even after the two horrendous crashes that it saw in the last two trading sessions, WNDW's market value is still as high as $63 MILLION.

That seems unreasonably high for a company whose  latest financial report revealed a rather grim picture:

  • Cash and cash equivalents - $123 thousand
  • Total current assets - $572 thousand
  • Total current liabilities - $2.5 million
  • Quarterly net loss – $2 million

What we're seeing now is the logical redressing of the glaring discrepancy between the company's achievements and overall financial standing and its hideously overgrown market cap. This being the case, it would be logical to assume that the ticker would stop falling as soon as WNDW's market value reaches levels that are reasonable by the standards of the average OTC Markets idle underachiever.

However, that isn't necessarily the case, since we're dealing with a company that is in the habit of issuing convertible notes and warrants in order to acquire the capital needed for its continued functioning. Normally, that's not a big deal – issuance of stock is how many companies on the OTC Markets fund their operations.

However, unfortunately for its investors, WNDW's debts are toxic, which complicates matters additionally. Nearly half a million of the company's current liabilities consists of notes that could be converted into shares of its common stock at a 15% discount. If that's not bad enough, there's the issue of the millions of outstanding warrants for the purchase of WNDW shares floating around - and most of them allow holders to buy shares of the company's common stock at rates as low as $1.37.

With this in mind, it should be obvious why the chances of WNDW bouncing back up or even retaining its ground seem rather slim at the moment.

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