SolarWindow Technologies, Inc. (WNDW)

[TRUISM]

***** SolarWindow Update On Market Transaction Restrictions In The Company’s Stock Pending Filing Of Forms 10-K and 10-Q *****
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Scottsdale, Arizona; – March 22, 2023 – Today SolarWindow Technologies, Inc. (symbol: WNDW; www.solarwindow.com) (the “Company”) issued the following statement to its stockholders about the warning posted by the OTC Markets regarding purchase and sale transactions in the Company’s Stock, which the Company believes is based on its inability to timely file its Form 10-K and Form 10-Q.

The Company believes this is a direct result of the failure of the South Korean management, led by Mr. John Rhee, the Representative Director (“Rhee”) of the Company’s indirect, wholly owned subsidiary, SolarWindow Asia Co. Ltd. (the “Korean Subsidiary”), to provide the financial, banking and transactional documents (collectively, the “Required Information”) required by the Company’s auditors in order to complete the audit for the August 31, 2022 fiscal year (the “Annual Audit”).

The Company, through its officers, directors, counsel and auditors, has made numerous requests to Rhee to produce the Required Information for its Annual Audit. Despite these repeated requests beginning in May 2022, including a direct communication by the Company’s auditors on October 17, 2022, Rhee and the management of the Korean Subsidiary, have failed to deliver the requested documentation and information, including, but not limited to such basic information as the Korean Subsidiary’s monthly banking statements.

The Company has taken legal action permitting it to hold, and it will hold an Extraordinary General Meeting for the removal of Rhee and Rhee appointed directors and auditor from the Korean Subsidiary. At the same time, the Company has engaged in discussions with Rhee, and will continue its efforts to secure his cooperation in obtaining the Required Information in order to expedite the completion and filing of the Company’s Form 10-K for the fiscal year ended August 31, 2022, and Form 10-Q for the period ended November 30, 2022.

At all relevant times, Rhee was (and as of today still is) the Representative Director of the Korean Subsidiary.

He also served as a member of the Company’s Board of Directors (the “Board”) from July 1, 2020 to December 18, 2022. As a member of the Company’s Board and Representative Director of the Korean Subsidiary, Rhee has certain responsibilities, including, but not limited to (1) oversight of the Korean Subsidiary’s financial reporting and record maintenance, (2) responsibility for the management of the Korean Subsidiary’s operations, (3) oversight of the Korean’s Subsidiary’s compliance with applicable Korean and US laws, and (4) continuing obligation to keep the Company’s Board apprised of the foregoing in order to ensure compliance with the Company’s ongoing disclosure obligations.

On May 12, 2022, in an effort to compel Rhee and the other South Korean members of the Korean Subsidiary’s board to provide the Required Information, the Company consulted with and subsequently engaged legal counsel based in South Korea (“Korean Counsel”) and provided them the authority to act on behalf of SolarWindow Asia (USA) Corp., a Nevada corporation wholly owned by the Company, and the sole shareholder of the company’s Korean Subsidiary.

Initially, Korean Counsel attempted to convene an Extraordinary General Meeting of the Shareholder and to Inspect Books of Account and Shareholder Register by sending notice to the Directors of the Korean Subsidiary to which Korean Counsel received no response.

About August 30, 2022, Korean Counsel then filed with the Korean courts a request for an order to convene an extraordinary general meeting of the shareholder (“EGM”), which required that Rhee, as the Representative Director of the Company, be served notice. Following several unsuccessful attempts to serve Rhee (September 26, 2022, October 6, 2022, and on October 12, 2022), the Korean Counsel effected service on October 19, 2022.

At the EGM, Rhee and the Rhee appointed directors and auditor of the Korean Subsidiary will be removed. Three new Company-nominated directors and an auditor will be appointed, who will provide the authorization required to permit the Company’s officers and directors to access the Required Information. The actions taken by the Company, including the holding of the EGM, in Korea are subject to the timeline of Korean legal processes which the Company has attempted to expedite where possible.

On November 16, 2022, a hearing was held in the 31st Civil Division of the Korean Courts. At the hearing, Korean Counsel submitted that (i) SolarWindow Asia (USA) Corp., a wholly-owned subsidiary of the Company and the sole shareholder of the Korean Subsidiary, is seeking to convene an EGM as soon as possible; (ii) Rhee has not provided required financial information of the Korean Subsidiary to the Company; (iii) Rhee was legally dismissed as a director of SolarWindow Asia (USA) Corp. on May 8, 2022; (iv) the current legally recognized director of SolarWindow Asia (USA) Corp.is the Company’s Interim CFO; and (v) a Canadian court has issued an injunction prohibiting Rhee from exercising any rights as a shareholder of the Company.

Further, the Company has elected to appoint an independent third party who can objectively conduct an EGM. Korean Counsel asked the Korean court to make a prompt decision in consideration of the above circumstances.

On March 2, 2023, the Company received a copy of an order dated February 27, 2023 (the “Order”) issued by the Suwon District Court 31st Civil Division (the “Court”), granting the relief sought by SolarWindow Asia (USA) Corp. In granting the relief the Court ordered that (as translated from Korean):

“1. The Applicant shall be permitted to convene an extraordinary general meeting of shareholders of the Company, which will be held for the agenda set out in the attached Schedule.

2. Attorney Joong-seo Choi (born on December 3, 1980) shall be appointed as the chairperson of the extraordinary general meeting of shareholders referred to in paragraph 1 above.”

In issuing the Order the Court stated:

“Considering the case records and the hearing of this case as a whole, we find that the Applicant, who is the shareholder holding 100% of the total number of shares issued by the Company, had requested the Company on August 17, 2022 to convene an extraordinary general meeting of shareholders for the agenda items listed in the attached Schedule, however, the Company has not initiated the process to convene such a meeting to date.

Based on the above factual finding, we find that it is necessary to grant permission to the Applicant in respect of convening an extraordinary general meeting of shareholders for the agenda items listed in the attached Schedule pursuant to Article 366(2) and (1) of the Commercial Code.

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“Further, since it would not be appropriate to allow the Company’s Representative Director John Sung Hee Rhee to chair the extraordinary general meeting of shareholders that is convened by the Company in accordance with this Court’s permission, given that John Sung Hee Rhee had not convened the extraordinary general meeting of shareholders, which the Applicant had requested in accordance with the provisions of the Commercial Code, the attorney referred to in paragraph 2 above of the Order shall be appointed as the chairperson of the above-referenced extraordinary general meeting of shareholders.”

The Company, with the assistance of Korean Counsel, is now in the process of scheduling the EGM, removing Rhee and the other members Korean Subsidiary’s board, and thereby, ultimately, permitting access to the Required Information. The Company expects to file the Form 10-K as soon as possible following its acquisition, processing, and auditing of the Required Information.

The failure to timely file Form 10-K (and any required Form 10-Qs) will continue to have regulatory and market repercussions that will adversely affect the stock price of, as well as investors’ ability to effect purchase and sale transactions in the Company’s securities until such time as the Company cures the filing deficiency.

In accordance with SEC rules, OTC Markets issued the following warning regarding purchase and sale transactions in the Company’s stock:


“Warning! This security is eligible for Unsolicited Quotes Only

This stock is not eligible for proprietary broker-dealer quotations. All quotes in this stock reflect unsolicited customer orders. Unsolicited-Only stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Investors may have difficulty selling this stock. An initial review by a broker-dealer under SEC Rule15c2-11 is required for brokers to publish competing quotes and provide continuous market making.


Warning! This security is traded on the Expert Market

The Expert Market® serves broker-dealer pricing and investor best execution needs. Quotations in Expert Market securities are restricted from public viewing. OTC Markets Group may designate securities for quoting on the Expert Market when it is not able to confirm that the company is making, or when the security is otherwise restricted from public quoting.”

The Company intends to continue providing updates to its stockholders regarding the status of its efforts.

After a year and change of SEC filings only; not PR's.





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