U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,
2015
OR
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 000-53035
SOLAR WIND ENERGY TOWER INC.
(Exact name of Issuer as specified in its
charter)
Nevada |
82-6008752 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
|
1997 Annapolis Exchange Pkwy., Suite 300, Annapolis, MD |
21401 |
(Address of Principal Executive Offices) |
(Zip Code) |
(410) 972 - 4713
(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 Exchange Act 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 x 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 x
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. (Check one):
Large accelerated filer o |
|
Accelerated filer o |
|
|
|
Non-accelerated filer o |
|
Smaller reporting company x |
(Do not check if a smaller reporting company) |
|
|
Indicate by check mark whether the registrant
is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x
Indicate the number of shares outstanding
of each of the issuer's classes of common equity, as of the latest practicable date: 869,411,883 shares of Common Stock ($0.0001
par value) as of May 11, 2015.
Solar Wind Energy Tower, Inc.
FORM 10-Q for the Quarter Ended March 31,
2015
Index
|
Page |
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|
PART I. FINANCIAL INFORMATION |
3 |
|
|
Item 1. Financial Statements (Unaudited) |
3 |
|
|
Condensed Consolidated Balance Sheets:
March 31, 2015 (unaudited) and December 31, 2014 |
3 |
|
|
Condensed Consolidated Statements of Operations:
For the three months ended March 31, 2015 and 2014 (unaudited) |
4 |
|
|
Condensed Consolidated Statement of Stockholders’ Deficit
For the three months ended March 31, 2015 (unaudited) |
5 |
|
|
Condensed Consolidated Statements of Cash Flows:
For the three months ended March 31, 2015 and 2014 (unaudited) |
6 |
|
|
Notes to Condensed Consolidated Financial Statements:
March 31, 2015 (Unaudited) |
7 |
|
|
Item 2. Management’s Discussion and Analysis |
18 |
|
|
Item 3. Quantitative and Qualitative Disclosures About Material Risk |
23 |
|
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Item 4. Controls and Procedures |
23 |
|
|
PART II. OTHER INFORMATION |
25 |
|
|
Item 1. Legal Proceedings |
25 |
|
|
Item 1A. Risk Factors |
25 |
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
25 |
|
|
Item 3. Defaults Upon Senior Securities |
25 |
|
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Item 4. Mine Safety Disclosures |
25 |
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Item 5. Other Information. |
25 |
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Item 6. Exhibits |
26 |
|
|
Signatures |
27 |
PART I. FINANCIAL INFORMATION
Item 1. Financial
Statements.
SOLAR WIND ENERGY TOWER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
March 31, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(unaudited) | | |
| |
ASSETS | |
| | |
| |
Current assets: | |
| | | |
| | |
Cash | |
$ | 39,167 | | |
$ | 88,764 | |
Capitalized financing costs, net | |
| 126,386 | | |
| 126,386 | |
Total current assets | |
| 165,553 | | |
| 215,150 | |
| |
| | | |
| | |
Property and equipment, net | |
| 1,711 | | |
| 1,888 | |
| |
| | | |
| | |
Other assets: | |
| | | |
| | |
Capitalized financing costs, net | |
| 6,525 | | |
| 37,697 | |
Deposits | |
| 152,697 | | |
| 129,259 | |
| |
| | | |
| | |
Total assets | |
$ | 326,486 | | |
$ | 383,994 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 206,478 | | |
$ | 200,391 | |
Accrued liabilities and expenses | |
| 395,089 | | |
| 369,897 | |
Advances from stockholders/officers | |
| 170,000 | | |
| 170,000 | |
Settlement payable | |
| – | | |
| 30,000 | |
Notes payable | |
| 268,270 | | |
| 268,270 | |
Convertible notes payable, net of unamortized debt discount of $517,392 and $650,053, respectively | |
| 594,372 | | |
| 599,457 | |
Convertible notes payable, related party | |
| 280,000 | | |
| 280,000 | |
Derivative liabilities | |
| 1,589,888 | | |
| 1,384,528 | |
Total current liabilities | |
| 3,504,097 | | |
| 3,302,543 | |
| |
| | | |
| | |
Long term debt: | |
| | | |
| | |
Convertible note payable, net of unamortized debt discount of $72,230 | |
| 2,770 | | |
| – | |
Notes payable, related party | |
| 385,000 | | |
| 385,000 | |
Notes payable | |
| 80,000 | | |
| 80,000 | |
Total liabilities | |
| 3,971,867 | | |
| 3,767,543 | |
| |
| | | |
| | |
Stockholders' deficit: | |
| | | |
| | |
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized; none issued and outstanding as of March 31, 2015 and December 31, 2014 | |
| – | | |
| – | |
Common stock, par value $0.0001 per share; 1,300,000,000 and 900,000,000 shares authorized as of March 31, 2015 and December 31, 2014, respectively; 743,464,237 and 626,745,923 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | |
| 74,346 | | |
| 62,675 | |
Common stock to be issued | |
| 420,000 | | |
| 420,000 | |
Additional paid in capital | |
| 10,793,759 | | |
| 10,119,764 | |
Accumulated deficit | |
| (14,931,183 | ) | |
| (13,984,186 | ) |
Stockholders' deficit attributable to Solar Wind Energy Tower, Inc. | |
| (3,643,078 | ) | |
| (3,381,747 | ) |
Non-controlling interest | |
| (2,303 | ) | |
| (1,802 | ) |
Total stockholders' deficit | |
| (3,645,381 | ) | |
| (3,383,549 | ) |
| |
| | | |
| | |
Total liabilities and stockholders' deficit | |
$ | 326,486 | | |
$ | 383,994 | |
See the accompanying notes to the unaudited condensed consolidated financial statements
SOLAR WIND ENERGY TOWER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
| |
Three months ended March 31, | |
| |
2015 | | |
2014 | |
OPERATING EXPENSES: | |
| | | |
| | |
Research and development | |
$ | 54,851 | | |
$ | 9,033 | |
Selling, general and administrative | |
| 275,030 | | |
| 425,558 | |
Depreciation | |
| 177 | | |
| 988 | |
Total operating expenses | |
| 330,058 | | |
| 435,579 | |
| |
| | | |
| | |
Loss from operations | |
| (330,058 | ) | |
| (435,579 | ) |
| |
| | | |
| | |
Other income (expense): | |
| | | |
| | |
Interest expense | |
| (546,282 | ) | |
| (305,934 | ) |
(Loss) gain on change in fair value of derivative liabilities | |
| (71,158 | ) | |
| 41,408 | |
| |
| | | |
| | |
Loss before provision for income taxes | |
| (947,498 | ) | |
| (700,105 | ) |
| |
| | | |
| | |
Provision for income taxes (benefit) | |
| – | | |
| – | |
| |
| | | |
| | |
Net loss | |
| (947,498 | ) | |
| (700,105 | ) |
| |
| | | |
| | |
Non-controlling interest | |
| 501 | | |
| – | |
| |
| | | |
| | |
NET LOSS ATTRIBUTABLE TO SOLAR WIND ENERGY TOWER, INC. | |
$ | (946,997 | ) | |
$ | (700,105 | ) |
| |
| | | |
| | |
Net loss per common share, basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding, basic and diluted | |
| 669,373,661 | | |
| 408,690,396 | |
See the accompanying notes to the unaudited
condensed consolidated financial statements
SOLAR WIND ENERGY TOWER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' DEFICIT
THREE MONTHS ENDED MARCH 31, 2015
(unaudited)
| |
Preferred stock | | |
Common stock | | |
Common to be Issued | | |
Additional Paid In | | |
Accumulated | | |
Non controlling | | |
| |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Interest | | |
Total | |
Balance, January 1, 2015 | |
| – | | |
$ | – | | |
| 626,745,923 | | |
| 62,675 | | |
| 6,000,000 | | |
$ | 420,000 | | |
$ | 10,119,764 | | |
$ | (13,984,186 | ) | |
$ | (1,802 | ) | |
$ | (3,383,549 | ) |
Shares issued in settlement of debt | |
| – | | |
| – | | |
| 116,718,314 | | |
| 11,671 | | |
| – | | |
| – | | |
| 666,851 | | |
| – | | |
| – | | |
| 678,522 | |
Stock based compensation | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 7,144 | | |
| | | |
| | | |
| 7,144 | |
Net loss | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (946,997 | ) | |
| (501 | ) | |
| (947,498 | ) |
Balance, March 31, 2015 | |
| – | | |
$ | – | | |
| 743,464,237 | | |
$ | 74,346 | | |
| 6,000,000 | | |
$ | 420,000 | | |
$ | 10,793,759 | | |
$ | (14,931,183 | ) | |
$ | (2,303 | ) | |
$ | (3,645,381 | ) |
See the accompanying notes to the unaudited
condensed consolidated financial statements
SOLAR WIND ENERGY TOWER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
| |
Three months ended March 31, | |
| |
2015 | | |
2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (947,498 | ) | |
$ | (700,105 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Depreciation | |
| 177 | | |
| 988 | |
Amortization of debt discounts | |
| 357,681 | | |
| 272,057 | |
Amortization of financing costs | |
| 31,172 | | |
| 5,000 | |
Non cash interest | |
| 158,531 | | |
| 14,433 | |
Stock based compensation | |
| 7,144 | | |
| 188,163 | |
Loss (gain) from change in fair value of derivative liabilities | |
| 71,158 | | |
| (41,408 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Settlement payable | |
| (30,000 | ) | |
| – | |
Accounts payable and accrued expenses | |
| 32,476 | | |
| 56,963 | |
Net cash used in operating activates | |
| (319,159 | ) | |
| (203,909 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Payment of option to acquire property | |
| (23,438 | ) | |
| – | |
Net cash used in investing activities | |
| (23,438 | ) | |
| – | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds from sale of common stock | |
| – | | |
| 25,000 | |
Proceeds from issuance of convertible notes payable | |
| 293,000 | | |
| 125,000 | |
Net cash provided by financing activities | |
| 293,000 | | |
| 150,000 | |
| |
| | | |
| | |
Net decrease in cash | |
| (49,597 | ) | |
| (53,909 | ) |
Cash, beginning of period | |
| 88,764 | | |
| 61,758 | |
| |
| | | |
| | |
Cash, end of period | |
$ | 39,167 | | |
$ | 7,849 | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
| | |
| |
| | | |
| | |
Interest paid | |
$ | – | | |
$ | – | |
Income taxes paid | |
$ | – | | |
$ | – | |
| |
| | | |
| | |
Non cash investing and financing activities: | |
| | | |
| | |
Fair value of warrants issued in connection with notes payable | |
$ | – | | |
$ | – | |
Notes payable issued in settlement of accrued officer salaries | |
$ | – | | |
$ | – | |
Common stock issued in settlement of debt | |
$ | 681,222 | | |
$ | 534,561 | |
See the accompanying
notes to the unaudited condensed consolidated financial statements
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
NOTE 1 – SUMMARY OF ACCOUNTING
POLICIES
A summary of the significant accounting
policies applied in the preparation of the accompanying unaudited condensed consolidated financial statements follows.
Business and Basis of Presentation
Solar Wind Energy Tower, Inc. (the “Company,”
“we,” “our,” “us”), formerly known as Superior Silver Mines, Inc., was incorporated in the
State of Idaho on January 22, 1962 as Superior Mines Company and then changed its name to Superior Silver Mines, Inc. The Company
reincorporated as a Nevada corporation on December 27, 2010. The Company has been dormant for a number of years, and has no known
mineral reserves.
On December 29, 2010, Solar Wind Energy
Tower Inc., a Nevada corporation (the “Company” or "Solar Wind"), completed a reverse merger (the “Merger”)
with Solar Wind Energy, Inc., a corporation formed under the laws of the State of Delaware on July 26, 2010 (“Solar Wind
- Subsidiary”). In connection with the Merger, the Company issued to the stockholders of Solar Wind - Subsidiary in exchange
for their Solar Wind - Subsidiary Common Stock, the right to receive an aggregate of 300,000,000 shares of the Company’s
Common Stock. As a result of the reverse merger, Solar Wind - Subsidiary is now a wholly-owned subsidiary of the Company.
For accounting purposes, Solar Wind - Subsidiary
was the surviving entity. The transaction was accounted for as a recapitalization of Solar Wind - Subsidiary pursuant to which
Solar Wind - Subsidiary was treated as the surviving and continuing entity although the Company is the legal acquirer rather than
a reverse acquisition. Accordingly, the Company’s historical financial statements are those of Solar Wind - Subsidiary immediately
following the consummation of the reverse merger. Also, going forward the business operations of Solar Wind - Subsidiary will become
the Company’s principal business operations.
The Company plans to design, develop, and
construct large downdraft towers that use benevolent, non-toxic natural elements to generate electricity and clean water economically
(“Downdraft Towers”) by integrating and synthesizing numerous proven as well as emerging technologies. In addition
to constructing Downdraft Towers in the United States and abroad, the Company intends to be prepared to establish partnerships
at home and abroad to propagate these systems and meet increasing global demand for clean water and electricity
On January 21, 2011, the Company changed
its name to Clean Wind Energy Tower, Inc. and on March 11, 2013, changed its name to Solar Wind Energy Tower Inc. along with
its wholly-owned subsidiary, a corporation formed under the laws of the State of Delaware, which changed its name from Clean Wind
Energy, Inc. to Solar Wind Energy, Inc. In addition, effective January 24, 2011, the Company’s quotation symbol on the Over-the-Counter
Bulletin Board was changed from SSVM.OB to CWET.OB and on March 11, 2013, in conjunction with our name change, the Company’s
quotation symbol on the Over-the-Counter Bulletin Board was changed from CWET.OB to SWET.OB.
In April 2014, the Company organized Arizona
Green Power, LLC, an Arizona limited liability company for the purpose to acquire development property from the City of San Luis,
Arizona. In connection with financing of the project, the Company reduced its ownership interest to 98.67% in connection with the
issuance of a note payable by Arizona Green Power, LLC on April 7, 2014.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
Interim Financial Statements
The following (a) condensed consolidated
balance sheet as of December 31, 2014, which has been derived from audited financial statements, and (b) the unaudited condensed
consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule
8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included.
Operating results for the three months
ended March 31, 2015 are not necessarily indicative of results that may be expected for the year ending December 31, 2015. These
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and
notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, filed with the Securities
and Exchange Commission (“SEC”) on March 31, 2015.
Going Concern
The accompanying unaudited condensed consolidated
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America,
which contemplate continuation of the Company as a going concern. However, the Company has reported net losses of $947,498 and
$700,105 for the three month periods ended March 31, 2015 and 2014, respectively, accumulated deficit of $14,931,183 and total
current liabilities in excess of current assets of $3,338,544 as of March 31, 2015.
The Company does not have any revenues
from operations and will be dependent on funds raise to satisfy its ongoing capital requirements for at least the next 12 months.
The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company
cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may
not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events,
the Company may be unable to implement its current plans for expansion or respond to competitive pressures, any of these circumstances
would have a material adverse effect on its business, prospects, financial condition and results of operations.
The unaudited condensed consolidated financial
statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities
that might be necessary should the Company be unable to continue as a going concern.
Fair Value of Financial Instruments
Our short-term financial instruments, including
cash, other assets and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the
fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes
and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.
Research and development
In accordance with ASC 730, “Research
and Development”, the Company expenses all research and development costs as incurred. The Company had incurred $54,851 and
$9,033 for the three months ended March 31, 2015 and 2014, respectively, in research and development costs. The Company expects
the research and development costs to increase in the future as it continues to invest in the infrastructure that is critical to
achieve our business goals and objectives.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
Net loss per Common Share
The Company computes net income (loss) per
share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic net loss per
common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net loss per share
is computed using the weighted average number of common and common stock equivalent shares outstanding during the period. There
is no effect on diluted loss per share since the common stock equivalents are anti-dilutive for the three months ended March 31,
2015 and 2014. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible notes and exercise
of warrants. Fully diluted shares for the three months ended March 31, 2015 and 2014 were 1,169,543,239 and 605,240,364, respectively.
Stock Based Compensation
The Company account for its stock based
awards in accordance with Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”), which requires
a fair value measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors,
including restricted stock awards. We estimate the fair value of stock using the stock price on date of the approval of the award.
The fair value is then expensed over the requisite service periods of the awards, which is generally the performance period and
the related amount recognized in our consolidated statements of operations.
Stock-based compensation expense in connection
with stock grants issued to consultants in exchange for services rendered for the three months ended March 31, 2015 and 2014 was
$7,144 and $188,163, respectively.
Derivative financial instruments
Accounting Standards Codification subtopic
815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”) became effective for the Company
on October 1, 2009. The Company’s convertible debt has reset provisions to the exercise price if the Company issues equity
or a right to receive equity, at a price less than the exercise prices. In addition, the Company has the possibility of exceeding
their common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions
of convertible notes after consideration of all existing instruments that could be settled in shares.
Capitalized Financing Costs
Capitalized financing costs represent costs
incurred in connection with obtaining the debt financing. These costs are amortized ratably and charged to financing
expenses over the term of the related debt. The amortization for the three months ended March 31, 2015 and 2014 was $31,172 and
$5,000, respectively. Accumulated amortization of deferred financing costs was $120,208 and $-0- at March 31, 2015 and 2014, respectively.
Recently Issued Accounting Pronouncements
There are various updates recently issued,
most of which represented technical corrections to the accounting literature or application to specific industries and are not
expected to a have a material impact on the Company's financial position, results of operations or cash flows.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
NOTE 2 – DEPOSITS
Long-term deposits are comprised of aggregate
of $148,438 and $125,000 deposits to acquire approximately 640 acres of land in Yuma County, Arizona at $46,500 per acre. The option
requires monthly payments of $12,500 for ten months beginning in June 2015 and may be extended an additional six months with a
$250,000 extension fee. All deposits are non-refundable.
In addition, the Company has an aggregate of $4,259 in long
term lease deposits.
NOTE 3 – ACCRUED LIABILITIES AND EXPENSES
Accrued liabilities and expenses as of
March 31, 2015 and December 31, 2014 consist of the following:
|
|
March 31,
2015 |
|
|
December 31,
2014 |
|
Accrued payroll |
|
$ |
152,169 |
|
|
$ |
140,457 |
|
Accrued stock purchase warrants |
|
|
29,400 |
|
|
|
29,400 |
|
Accrued interest and other |
|
|
213,520 |
|
|
|
200,040 |
|
Total |
|
$ |
395,089 |
|
|
$ |
369,897 |
|
NOTE 4 – ADVANCES FROM SHAREHOLDERS/OFFICERS
Advances from shareholders are comprised
of the fair value of common stock pledged as collateral by shareholder. As disclosed below, the Company issued a secured convertible
Promissory Note on February 29, 2012. In connection with the issuance, a shareholder pledged 10,000,000 shares of the Company’s
common stock. On March 8, 2012, upon default, the escrow agent transferred the pledged common shares to the note holder. The fair
value of the common shares pledged was recorded as a related party obligation as of March 31, 2012 with a corresponding reduction
in the carrying value of the Note Payable.
NOTE 5 – SETTLEMENT PAYABLE
In August 2014, the Company settled the
litigation with Hanover Holdings I, LLC for a cash of $90,000 payable in six equal monthly installments of $15,000 beginning September
5, 2014. In connection with the settlement, the Company recognized a gain on settlement of debt of $32,985 during the year ended
December 31, 2014. As of December 31, 2014, the outstanding balance was $30,000, which has been repaid during the three months
ended March 31, 2015.
NOTE 6 – NOTES PAYABLE
| |
March 31, 2015 | | |
December 31, 2014 | |
Promissory notes issued June 20, 2012 | |
$ | 268,270 | | |
$ | 268,270 | |
Note payable issued April 7, 2014 | |
| 80,000 | | |
| 80,000 | |
Total | |
| 348,270 | | |
| 348,270 | |
Less current portion | |
| 268,270 | | |
| 268,270 | |
Long term portion | |
$ | 80,000 | | |
$ | 80,000 | |
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
On June 20, 2012, the Company issued three
promissory notes payable in the aggregate of $268,270 in settlement of outstanding accounts payable. The notes mature earlier of
(1) one year from the date of issuance, (2) completion of any major financing event or events in which the Company receives aggregate
proceeds of $2,000,000 or more, or (3) any liquidation or reorganization, merger or recapitalization of the Company, bear an interest
rate of 8% per annum due at maturity and are unsecured. The notes are currently in default.
On April 7, 2014, Arizona Green Power,
LLC, a majority owned subsidiary of the Company, issued a note payable for $80,000 with interest at 10% per annum, due at maturity
of April 6, 2016. In connection with the issuance of the note, the Company granted i) a 1.33% ownership interest in Arizona Green
Power, LLC and ii) a warrant to purchase 1,920,000 shares of the Company’s common stock exercisable at $0.05 per share expiring
on March 7, 2016. The warrants were valued using the Black Sholes option pricing method with the following assumptions: dividend
yield $-0-, volatility of 158.38% and risk free rate of 0.41%. The determined fair value of the warrant of $3,070 is amortized
as financing costs of the term of the related note (2 years).
NOTE 7 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable are comprised of the following:
| |
March 31, | | |
December 31, | |
| |
2015 | | |
2014 | |
Convertible promissory notes, due December 31, 2015 | |
$ | 239,000 | | |
$ | 239,000 | |
Convertible promissory note, due April 4, 2015, net of unamortized debt discount of $4,773 | |
| – | | |
| 12,727 | |
Convertible promissory note, due June 9, 2015, net of unamortized debt discount of $12,266 and $83,184, respectively | |
| 44,998 | | |
| 106,576 | |
Convertible promissory note, due May 11, 2015, net of unamortized debt discount of $4,122 and $117,141, respectively | |
| 24,378 | | |
| 136,359 | |
Convertible promissory note, due October 14, 2015, net of unamortized debt discount of $166,808 and $259,479 | |
| 163,192 | | |
| 70,521 | |
Convertible promissory note, due July 10, 2015, net of unamortized debt discount of $19,649 and $37,158, respectively | |
| 33,851 | | |
| 16,342 | |
Convertible promissory note, due October 10, 2015, net of unamortized debt discount of $41,640 and $61,058, respectively | |
| 37,110 | | |
| 17,692 | |
Convertible promissory note, due December 30, 2015, net of unamortized debt discount of $65,685 and $87,260, respectively | |
| 21,815 | | |
| 240 | |
Convertible promissory note, due January 5, 2016, net of unamortized debt discount of $60,411 | |
| 18,339 | | |
| – | |
Convertible promissory note, due February 19, 2016, net of unamortized debt discount of $70,089 | |
| 8,411 | | |
| – | |
Convertible promissory note, due March 16, 2016, net of unamortized debt discount of $76,722 | |
| 3,278 | | |
| – | |
Convertible promissory note, due March 3, 2017, net of unamortized debt discount of $72,230 | |
| 2,770 | | |
| – | |
Total | |
| 597,142 | | |
| 599,457 | |
Less current portion | |
| (594,372 | ) | |
| (599,457 | ) |
Long term portion | |
$ | 2,770 | | |
$ | – | |
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
2015 Notes:
LG Capital Funding, LLC
On January 5, 2015, the Company entered
into a Securities Purchase Agreement with LG Capital Funding, LLC ("LG"), for the sale of an 8% convertible note in the
principal amount of $78,750 (the "Note"). The financing closed on January 5, 2015. The total net proceeds the Company
received from this Offering was $75,000.
The Note bears interest at the rate of
8% per annum. All interest and principal must be repaid on January 5, 2016. The Note is convertible into common stock, at LG’s
option, at a 42% discount to the average three lowest bid prices of the common stock during the 15 trading day period prior to
conversion.
Fourth Man, LLC.
On February 20, 2015, the Company entered
into a Securities Purchase Agreement with Fourth Man, LLC ("Fourth Man"), for the sale of an 8% convertible note in
the principal amount of $78,500 (the "Note"). The financing closed on February 20, 2015. The total net proceeds the
Company received from this Offering was $75,000.
The Note bears interest at the rate of
8% per annum. All interest and principal must be repaid on February 19, 2016. The Note is convertible into common stock, at Fourth
Man’s option, at a 42% discount to the average three lowest close prices of the common stock during the 10 trading day period
prior to conversion.
JSJ Investments, Inc.
On March 16, 2015, the Company entered
into a Securities Purchase Agreement with JSJ Investments, Inc ("JSJ"), for the sale of an 12% convertible note in the
principal amount of $80,000 (the "Note"). The financing closed on March 16, 2015. The total net proceeds the Company
received from this Offering was $75,000.
The Note bears interest at the rate of
8% per annum. All interest and principal must be repaid on March 16, 2016. The Note is convertible into common stock, at JSJ’s
option, at a 42% discount to the average three lowest close prices of the common stock during the 15 trading day period prior to
conversion.
JMJ Financial
On March 3, 2015, the Company entered into
a Securities Purchase Agreement with JMJ Financial, for the sale of an 12% convertible note in the aggregate principal amount of
$400,000 (the "Note"). The financing closed on a $75,000 tranche on March 3, 2015. The total net proceeds the Company
received from this Offering was $68,000, net of fees and original interest discount (“OID”) of $5,000.
The Note bears interest at the rate of 12%
per annum after three months. All interest and principal must be repaid on March 3, 2017. The Note is convertible into common
stock, at JMJ Financial’s option, at a 60% discount to the lowest close price of the common stock during the 25 trading
day period prior to conversion.
Summary:
The Company has identified the embedded
derivatives related to the above described Notes. These embedded derivatives included certain conversion features and reset provisions.
The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as
of the inception date of the Notes and to fair value as of each subsequent reporting date.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
At the inception of the 2015 Notes, the Company
determined the aggregate fair value of $451,531 of embedded derivatives. The fair value of the embedded derivatives was determined
using the Black Scholes Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility
of 185.23% to 194.56%, (3) weighted average risk-free interest rate of 0.17 % to 0.26%, (4) expected life of 0.76 to 2.00 years,
and (5) estimated fair value of the Company’s common stock of $0.003 to $0.008 per share.
The determined fair value of the debt derivatives
of $451,531 was charged as a debt discount up to the net proceeds of the note with the remainder of $158,531 charged to current
period operations as non-cash interest expense.
At March 31, 2015, the Company marked to market
the fair value of the debt derivatives and determined a fair value of $1,583,253. The Company recorded a loss from change in fair
value of debt derivatives of $87,030 for the three months ended March 31, 2015. The fair value of the embedded derivatives
was determined using Black Scholes Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected
volatility of 184.60%, (3) weighted average risk-free interest rate of 0.02% to 0.26%, (4) expected life of 0.25 to 0.96 years,
and (5) estimated fair value of the Company’s common stock of $0.0047 per share.
The charge of the amortization of debt discounts
and costs for the three months ended March 31, 2015 and 2014 was $357,681 and 272,057, respectively, which was accounted for as
interest expense. Also, the Company has accrued interest expense of $52,013 as of March 31, 2015.
During the three months ended March 31,
2015, the Company issued an aggregate of 116,718,314 shares of its common stock in settlement of the convertible note payable and
related interest.
NOTE 8 – NOTES PAYABLE, RELATED PARTY
On April 18, 2014, the Company issued an
aggregate of $385,000 promissory notes to officers and key employees in settlement of accrued salaries. The promissory notes bear
interest at the rate of 2% per annum. All interest and principal must be repaid on April 18, 2016. In connection with the issuance
of the notes, the Company issued an aggregate of 59,413,581 warrants to purchase the Company’s common stock at $0.00648 per
share for two years.
The warrants were valued using the Black
Sholes option pricing method with the following assumptions: dividend yield $-0-, volatility of 180.09% and risk free rate of 0.43%.
The determined fair value of the warrants of $250,049 is amortized as financing costs of the term of the related notes (2 years).
NOTE 9 – CONVERTIBLE NOTES PAYABLE, RELATED PARTY
During 2012, the Company issued an aggregate
of $280,000 convertible promissory notes to officers and key employees in settlement of accrued salaries.
The convertible promissory notes bear interest
at the rate of 8% per annum. All interest and principal were to be repaid initially on December 31, 2014. The convertible promissory
notes are convertible into common stock, at the holders’ option at $0.015 per common share. In December 2014, the notes were
extended to December 31, 2015 with the interest rate increasing to 12% per annum.
Due to the nature of the notes
described in Note 7 above, the Company has identified the embedded derivatives related to the above described Notes. These
embedded derivatives included certain conversion features and the uncertainty of sufficient authorized shares to meet
possible conversion demands. The accounting treatment of derivative financial instruments requires that the Company record
fair value of the derivatives as of the inception date of the notes and to fair value as of each subsequent reporting
date.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
The fair value of the embedded derivatives
was determined using Black Scholes Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected
volatility of 200.41% to 200.80%, (3) weighted average risk-free interest rate of 0.25%, (4) expected life of 2.0 years, and (5)
estimated fair value of the Company’s common stock of $0.0165 to $0.0167 per share.
The determined fair value of the debt derivatives
of $262,285 was charged as a debt discount up to the net proceeds of the note.
At March 31, 2015, the Company marked to
market the fair value of the debt derivatives and determined a fair value of $6,635. The Company recorded a gain from change in
fair value of debt derivatives of $15,872 for the three months ended March 31, 2015. The fair value of the embedded derivatives
was determined using Black Scholes Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected
volatility of 184.60%, (3) weighted average risk-free interest rate of 0.03%, (4) expected life of 0.25 years, and (5) estimated
fair value of the Company’s common stock of $0.0047 per share.
The charge of the amortization of debt
discounts and costs for the three months ended March 31, 2015 and 2014 was $-0- and $32,313, respectively, respectively; which
was accounted for as interest expense. Also, the Company has accrued interest expense of $50,356 as of March 31, 2015.
NOTE 10 – DERIVATIVE LIABILITIES
As described in Notes 6 and 8 above, the
Company issued convertible notes that contain conversion features and reset provision. The accounting treatment of derivative financial
instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each
subsequent reporting date. Refer to Notes 7 and 9 for assumptions used to determine fair values.
NOTE 11 – STOCKHOLDERS' EQUITY
Preferred stock
The Company has authorized 10,000,000 shares
of preferred stock, with a par value of $0.0001 per share. As of March 31, 2015 and December 31, 2014, the Company did not have
any preferred stock issued and outstanding.
Common stock
The Company has authorized 1,300,000,000
and 900,000,000 shares of common stock, with a par value of $0.0001 per share as of March 31, 2015 and December 31, 2014, respectively.
As of March 31, 2015 and December 31, 2014, the Company has 743,464,237 and 626,745,923, respectively, shares of common stock issued
and outstanding.
On January 15, 2015, the Company’s
majority stockholders approved to amend the Articles of Incorporation to increase of authorized shares of common stock from 900,000,000
to 1,300,000,000.
In 2013 and 2012, the Company issued an
aggregate of 15,000,000 and 21,500,000 shares of common stock for future services of $328,500 and $1,305,000, respectively. The
Company accretes the fair value of the shares issued as stock based compensation during the requisite service period to operations.
During the three months ended March 31, 2015 and 2014, the Company recorded $7,144 and $188,163, respectively, as stock based compensation.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
NOTE 12 – WARRANTS
Warrants
The following table summarizes the changes
in warrants outstanding and related prices for the shares of the Company’s common stock at March 31, 2015:
Exercise Price | | |
Number Outstanding | | |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | | |
Weighted Average Exercise price | | |
Number Exercisable | | |
Warrants Exercisable Weighted Average Exercise Price | |
$ | 0.00648 | | |
| 59,413,581 | | |
| 1.05 | | |
$ | 0.00648 | | |
| 59,413,581 | | |
$ | 0.00648 | |
| 0.00860 | | |
| 11,627,908 | | |
| 1.01 | | |
| 0.00860 | | |
| 11,627,908 | | |
| 0.00860 | |
| 0.02000 | | |
| 5,000,000 | | |
| 2.22 | | |
| 0.02000 | | |
| 5,000,000 | | |
| 0.02000 | |
| 0.05000 | | |
| 1,920,000 | | |
| 0.94 | | |
| 0.05000 | | |
| 1,920,000 | | |
| 0.05000 | |
| 0.10000 | | |
| 2,187,101 | | |
| 3.15 | | |
| 0.10000 | | |
| 2,187,101 | | |
| 0.10000 | |
| | | |
| 80,148,590 | | |
| 1.17 | | |
| | | |
| 80,148,590 | | |
$ | 0.01122 | |
Transactions involving the Company’s warrant issuance
are summarized as follows:
| |
Number of Shares | | |
Weighted Average Price Per Share | |
Outstanding at December 31, 2013 | |
| 2,187,101 | | |
$ | 0.10 | |
Granted | |
| 93,711,489 | | |
| 0.01 | |
Exercised | |
| – | | |
| – | |
Canceled or expired | |
| – | | |
| – | |
Outstanding at December 31, 2014 | |
| 95,898,590 | | |
| 0.02 | |
Granted | |
| – | | |
| – | |
Exercised | |
| – | | |
| – | |
Expired | |
| (15,750,000 | ) | |
| 0.04 | |
Outstanding at March 31, 2015 | |
| 80,148,590 | | |
$ | 0.01122 | |
NOTE 13- NON CONTROLLING INTEREST
In April 2014, the Company organized Arizona
Green Power, LLC, an Arizona limited liability company for the purpose to acquire development property from the City of San Luis,
Arizona. At the time of formation, Arizona Green Power, LLC did not have any significant assets or liabilities. In connection with
financing of the project, the Company reduced its ownership interest to 98.67% in connection with the issuance of a note payable
by Arizona Green Power, LLC on April 7, 2014.
A reconciliation of the non-controlling
loss attributable to the Company:
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
Net loss attributable to non-controlling
interest for the three months ended March 31, 2015:
| |
March 31, 2015 | |
Net loss | |
$ | 37,587 | |
Average Non-controlling interest percentage | |
| 1.33% | |
Net loss attributable to the non-controlling interest | |
$ | 501 | |
The following table summarizes the changes in non-controlling
interest from December 31, 2014 to March 31, 2015:
Balance, December 31, 2014 | |
$ | (1,802 | ) |
Transfer (to) from the non-controlling interest as a result of change in ownership | |
| – | |
Net loss attributable to the non-controlling interest | |
| (501 | ) |
Balance, March 31, 2015 | |
$ | (2,303 | ) |
NOTE 14 – FAIR VALUE MEASUREMENTS
ASC 825-10 defines fair value as the price
that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions
that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk
of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be
used to measure fair value:
· |
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
· |
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or |
· |
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and are unobservable. |
Items recorded or measured at fair value
on a recurring basis in the accompanying unaudited condensed consolidated financial statements consisted of the following items
as of March 31, 2015:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Long-term investments |
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
Total |
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
Derivative liabilities |
|
$ |
– |
|
|
$ |
– |
|
|
$ |
1,589,888 |
|
|
$ |
1,589,888 |
|
Total |
|
$ |
– |
|
|
$ |
– |
|
|
$ |
1,589,888 |
|
|
$ |
1,589,888 |
|
The table below sets forth a summary of
changes in the fair value of the Company’s Level 3 financial liabilities (derivative liability) for the three months ended
March 31, 2015.
SOLAR WIND ENERGY TOWER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2015
(unaudited)
Three months ended March 31, 2015:
|
|
Derivative Liabilities |
|
Balance, December 31, 2014 |
|
$ |
1,384,528 |
|
|
|
|
|
|
Transfers in (out) at mark-market value on date of payoff or conversion |
|
|
(317,329 |
) |
|
|
|
|
|
Transfers in upon initial fair value of derivative liabilities |
|
|
451,531 |
|
|
|
|
|
|
Loss from change in fair value of derivative liabilities |
|
|
71,158 |
|
|
|
|
|
|
Balance, March 31, 2015 |
|
$ |
1,589,888 |
|
|
|
|
|
|
Total loss for the three month period included in earnings relating to the liabilities held at March 31, 2015 |
|
$ |
71,158 |
|
Level 3 Liabilities were comprised of our
bifurcated convertible debt features on our convertible notes.
NOTE 15 – SUBSEQUENT EVENTS
Subsequent issuances of common stock
In April 2015, the Company issued an aggregate
of 125,947,646 shares of its common stock in settlement of convertible notes payable and accrued interest of $222,015.
Subsequent financing
On March 25, 2015, the Company entered into
a Securities Purchase Agreement with Vis Vires Group, Inc ("Vis"), for the sale of an 8% convertible note in the principal
amount of $84,000 (the "Note"). The financing closed on April 1, 2015. The total net proceeds the Company received from
this Offering was $68,000.
The Note bears interest at the rate of 8%
per annum. All interest and principal must be repaid on December 27, 2015. The Note is convertible into common stock, at Vis’s
option, at a 42% discount to the average three lowest bid prices of the common stock during the 15 trading day period prior to
conversion.
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of
the Company’s financial condition and results of operations should be read in conjunction with the accompanying financial
statements and related notes thereto for the quarter ended March 31, 2015, as well as the Company’s consolidated financial
statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations
in the Company’s Form 10-K for the year ended December 31, 2014 filed on March 31, 2015.
Corporate History
On December 29, 2010, the Company completed
a reverse merger (the “Merger”) with Solar Wind Energy, Inc. , a corporation formed under the laws of the State of
Delaware on July 26, 2010 (“Solar Wind - Subsidiary”). In connection with the Merger, the Company issued to the stockholders
of Solar Wind - Subsidiary in exchange for their Solar Wind - Subsidiary Common Stock, the right to receive an aggregate of 300,000,000
shares of the Company’s Common Stock. As a result of the reverse merger, Solar Wind - Subsidiary is now a wholly-owned subsidiary
of the Company.
For accounting purposes, Solar Wind - Subsidiary
was the surviving entity. The transaction was accounted for as a recapitalization of Solar Wind - Subsidiary pursuant to which
Solar Wind - Subsidiary was treated as the surviving and continuing entity although the Company is the legal acquirer rather than
a reverse acquisition. Accordingly, the Company’s historical financial statements are those of Solar Wind - Subsidiary immediately
following the consummation of the reverse merger. Also, going forward the business operations of Solar Wind - Subsidiary will become
the Company’s principal business operations.
The Company was incorporated under the
laws of the State of Idaho on January 22, 1962, as Superior Mines Company. In 1964, the Company’s name was changed to Superior
Silver Mines, Inc. On December 27, 2010, the Company reincorporated as a Nevada corporation. Prior to the Merger, the Company had
been dormant for a number of years and had no known mineral reserves. On January 21, 2011, the Company changed its name from Superior
Silver Mines, Inc. to Clean Wind Energy Tower, Inc. and on March 11, 2013, changed its name to Solar Wind Energy Tower Inc. along
with its wholly-owned subsidiary, a corporation formed under the laws of the State of Delaware, which changed its name from Clean
Wind Energy, Inc. to Solar Wind Energy, Inc. In addition, effective January 24, 2011, the Company’s quotation symbol on the
Over-the-Counter Bulletin Board was changed from SSVM.OB to CWET.OB and on March 11, 2013, in conjunction with our name change,
the Company’s quotation symbol on the Over-the-Counter Bulletin Board was changed from CWET.OB to SWET.OB.
Overview
Our Company’s core objective and
focus is to become a leading provider of clean efficient green energy to the world communities at a reasonable cost without the
destructive residuals of fossil fuel, while continuing to generate innovative technological solutions for today and tomorrow’s
electrical power needs.
Solar Wind has assembled a team of experienced
business professionals, engineering and scientific consultants with the proven ability to bring the idea to market. Solar Wind
has filed and been issued patents that the Company believes will further enhance this potentially revolutionary technology. Solar
Wind is based in Annapolis, MD, and is traded on the OTCBB under the symbol ‘SWET’.
Solar Wind has designed, engineered, developed
and is preparing to construct large “Solar Wind Downdraft Towers” that use benevolent, non-toxic natural elements to
generate electricity economically by integrating and synthesizing numerous proven as well as emerging technologies. In addition
to constructing Solar Wind Downdraft Towers in the United States and abroad, the Company intends to establish partnerships at home
and abroad to propagate these systems and meet increasing global demand for electricity.
Forward Looking Statements
This report may contain “forward-looking
statements,” which represent the Company’s expectations or beliefs, including, but not limited to, statements concerning
industry performance and the Company’s results, operations, performance, financial condition, plans, growth and strategies,
which include, without limitation, statements preceded or followed by or that include the words “may,” “will,”
“expect,” “anticipate,” “intend,” “could,” “estimate,” or “continue”
or the negative or other variations thereof or comparable terminology. Any statements contained in this report or the information
incorporated by reference that are not statements of historical fact may be deemed to be forward-looking statements.
These statements by their nature involve
substantial risks and uncertainties, some of which are beyond the Company’s control, and actual results may differ materially
depending on a variety of important factors, including those risk factors discussed under “Trends, Risks and Uncertainties”,
many of which are also beyond the Company’s control. You should not place undue reliance on these forward-looking statements,
which speak only as of the date of this report. The Company does not undertake any obligation to update or release any revisions
to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence
of unanticipated events, except to the extent such updates and/or revisions are required by applicable law.
Critical Accounting Policies and
Estimates
Financial Reporting Release No. 60, published
by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their
financial statements. While all these significant accounting policies impact our consolidated financial condition and results of
operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the
most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and
estimates. Actual results may differ from those estimates.
We believe that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect
on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
General
The Company’s Consolidated Financial
Statements are prepared in accordance with U.S. generally accepted accounting principles, which require management to make estimates,
judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue, if any, and expenses, and the disclosure
of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions
that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development,
selection and disclosure of these estimates with the Board of Directors. Management believes that the accounting estimates employed
and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions
or conditions. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions
about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used,
or if changes in the estimate that are reasonably possible could materially impact the consolidated financial statements. Management
believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of
the Consolidated Financial Statements.
Revenue Recognition
The Company has generated no revenues to
date. It is the Company’s policy that revenue from product sales or services will be recognized in accordance with ASC 605
“Revenue Recognition”. Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability
is reasonably assured.
Determination of criteria (3) and
(4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and
the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the
product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the
product has been delivered or no refund will be required. The Company did not have any revenue during the period ended March 31,
2015.
Fair Value of Financial Instruments
The Company adopted the provisions under
FASB for Fair Value Measurements, which define fair value for accounting purposes, establishes a framework for measuring fair value
and expands disclosure requirements regarding fair value measurements. The Company’s adoption of these provisions did not
have a material impact on its consolidated financial statements. Fair value is defined as an exit price, which is the price that
would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants
at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates
to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which
fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require
less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less
price observability and are generally measured at fair value using valuation models that require more judgment. These valuation
techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency
of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and
liabilities measured at fair value into a three-level hierarchy in accordance with these provisions.
In January 2010 the FASB issued Update
No. 2010-05 “Compensation—Stock Compensation—Escrowed Share Arrangements and Presumption of Compensation”
(“2010-05”). 2010-05 re-asserts that the Staff of the Securities Exchange Commission (the “SEC Staff”)
has stated the presumption that for certain shareholders escrowed share represent a compensatory arrangement. 2010-05 further clarifies
the criteria required to be met to establish a position different from the SEC Staff’s position. The Company does not believe
this pronouncement to have any material impact on its financial position, results of operations or cash flows.
Accounting for Derivatives
In 2014 and 2015, we issued convertible
notes payable that contained certain conversion features which we identified as embedded derivatives. In addition, the Company
has the possibility of exceeding their common shares authorized when considering the number of possible shares that may be issuable
to satisfy settlement provisions of convertible notes after consideration of all existing instruments that could be settled in
shares. Therefore, in accordance with ASC 815-40, we reclassified the fair value of the conversion feature from equity to
a liability at the date of issuance. Subsequent to the initial issuance date, we are required to adjust to fair value the derivative
as an adjustment to current period operations.
New Accounting Pronouncements
There are various updates recently issued,
most of which represented technical corrections to the accounting literature or application to specific industries and are not
expected to a have a material impact on the Company's financial position, results of operations or cash flows.
RESULTS OF OPERATIONS
Three months ended March 31, 2015 as compared to three
months ended March 31, 2014.
Revenue
The Company has not generated revenue since inception.
Operating Expenses
Research and development
During the three months ended March 31,
2015, research and development costs were $54,851 compared to $9,033 for the same period last year. The Company's expenditures
for research and development is dependent on available resources and future expenditures are expected to increase with additional
financing.
Selling, general and administrative
During the three months ended March 31,
2015, selling, general and administrative expenses were $275,030 as compared to $425,558 for the same period last year, a 35% decrease.
The primary decrease is due to reduction in stock based compensation incurred in the current period as compared to same period
last year.
Depreciation
Depreciation expense for the three months
ended March 31, 2015 was $177 as compared to $988 for the same period last year due to the aging of our equipment.
Other income (expense)
Interest expense
Interest expense for the three months ended
March 31, 2015 was $546,282 compared to $305,934 for the same period last year. In the current period, we incurred $357,681 non-cash
debt discount and OID amortization and $158,531 in non-cash interest expense on issued convertible debt as compared to $272,057
and $14,433, respectively for the same period last year.
Gain on change in fair value of derivative
liabilities
During 2014 and 2015, we issued convertible
promissory notes with an embedded derivative, all requiring us to fair value the derivatives each reporting period and mark to
market as a non-cash adjustment to our current period operations. This resulted in a (loss) gain of $(71,158) and $41,408 on change
in fair value of derivative liabilities for the three months ended March 31, 2015 and 2014, respectively.
Liquidity and Capital Resources
We have financed our operations since inception
primarily through private offerings of our equity securities and issuance of convertible notes.
Working Capital
Our working capital deficit increased by $251,151
during the three months ended March 31, 2015 from a working capital deficit (current liabilities in excess of current assets)
of $3,087,393 at December 31, 2014 to a working capital deficit of $3,338,544 at March 31, 2015. The increase in working capital
deficit for the three months ended March 31, 2015 is due to a combination of reasons, of which the significant factors include:
|
· |
Cash had a net decrease in working capital by $49,597 for the three months ended March 31, 2015. The most significant uses and proceeds of cash were: |
|
o |
Approximately $319,000 of cash consumed in operating activities; |
|
|
|
|
o |
Proceeds of $293,000 from issuance of convertible notes payable |
Total current assets of $165,553 and $215,150
as of March 31, 2015 and December 31, 2014, respectively, cash representing 24% and 41% as of March 31, 2015 and December 31, 2014,
respectively.
Proceeds from the issuance of convertible promissory notes
During the three months ended March 31,
2015, the Company received proceeds of $293,000 from the issuance of Convertible Promissory Notes.
Cash flow analysis
Cash used in operations was $319,159 during
the three month period ended March 31, 2015. During the three month period ended March 31, 2015, our primary capital needs were
for operating expenses, including funds to support our business strategy, which primarily includes working capital necessary to
fund operations and reducing our account payables.
During the three months ended March 31,
2015, we utilized $23,438 cash for investing activities comprised of payment of long term deposit.
Cash provided by financing activities was
a total net proceeds of $293,000 from the issuance of Convertible Promissory Notes.
The accompanying unaudited condensed consolidated
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America,
which contemplate continuation of the Company as a going concern. The Company has reported a net loss of $947,498 for the three
month period ended March 31, 2015, accumulated deficit of $14,931,183 and total current liabilities in excess of current assets
of $3,338,544 as of March 31, 2015.
The Company does not have any revenues
from operations and will be dependent on funds raise to satisfy its ongoing capital requirements for at least the next 12 months.
The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company
cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may
not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events,
the Company may be unable to implement its current plans for expansion or respond to competitive pressures, any of these circumstances
would have a material adverse effect on its business, prospects, financial condition and results of operations.
Management expects that global economic
conditions will continue to present a challenging operating environment through 2015. To the extent permitted by working capital
resources, management intends to continue making targeted investments in strategic operating and growth initiatives. Working capital
management will continue to be a high priority for 2015.
While we have been able to manage our working
capital needs with the current credit facilities, additional financing is required in order to meet our current and projected cash
flow requirements from operations. We cannot predict whether this new financing will be in the form of equity or debt. We may not
be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. Additional investments are
being sought, but we cannot guarantee that we will be able to obtain such investments.
Financing transactions may include the
issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of
our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the
issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected
costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force
us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional
dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common
stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.
Inflation
We do not believe that inflation has had
a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant
inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure
to do so could adversely affect our business, financial condition and results of operations.
Off-Balance sheet Arrangements
We do not maintain off-balance sheet arrangements
nor do we participate in any non-exchange traded contracts requiring fair value accounting treatment.
Number of Employees
As of March 31, 2015, the Company had 3
full time employees.
Disclosure of Contractual Obligations
The Company does not have any significant
contractual obligations which could negatively impact our results of operations and financial condition.
Item 3. Quantitative
and Qualitative Disclosures About Material Risk.
As a smaller reporting company, we are
not required to include disclosure under this item.
Item 4. Controls
and Procedures.
As of March 31, 2015, the Company performed
an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Accounting Officer), of the effectiveness of the design and operation
of its disclosure controls and procedures as defined in Rules 13a - 15(e) or 15d - 15(e) promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). Based on that evaluation and due to the lack of segregation of duties
and failure to implement accounting controls, our principal executive officer and principal financial officer concluded that our
disclosure controls and procedures were not effective as of the end of the period covered by this report.
The reason for the ineffectiveness of our
disclosure controls and procedures was the result of having a limited number of employees and not having proper segregation of
duties based on the cost benefit of hiring additional employees solely to address the segregation of duties issue. We compensate
for the lack of segregation of duties by employing close involvement of management in day-to-day operations.
Limitations on Effectiveness of Controls
and Procedures
Our management, including our Chief Executive
Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure
controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but
are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control.
The design of any system of controls also
is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Remediation of Material Weaknesses in
Internal Control over Financial Reporting
As a small business, without a viable business
and revenues, the Company does not have the resources to install a dedicated staff with deep expertise in all facets of SEC disclosure
and GAAP compliance. As is the case with many small businesses, the Company will continue to work with its external consultants
and attorneys as it relates to new accounting principles and changes to SEC disclosure requirements. The Company has found that
this approach worked well in the past and believes it to be the most cost effective solution available for the foreseeable future.
The Company will conduct a review of existing
sign-off and review procedures as well as document control protocols for critical accounting spreadsheets. The Company will also
increase management's review of key financial documents and records.
As a small business, the Company does not
have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function.
However, Company management does review, and will increase the review of, financial statements on a monthly basis. These actions,
in addition to the improvements identified above, will minimize any risk of a potential material misstatement occurring.
Changes in Internal Controls
During the fiscal quarter ended March 31,
2015, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably
likely to materially affect our internal controls over financial reporting.
PART II. OTHER INFORMATION
Item
1. Legal Proceedings.
Typenex Co-Investment, LLC filed suit against the Company
on September 4, 2014 in the United States District Court, Northern District of Illinois, Eastern Division claiming that the Company
breached a contract it entered into with Typenex, and that Typenex was entitled to convert any portion of the outstanding balance
of their monies the Company allegedly owed to Typenex into validly issued, fully paid and non-assessable shares of Solar Wind
Energy Tower Inc. common shares. Typenex seeks money damages and court orders enjoining the Company from further breaches. In
a related suit filed September 9, 2014 in the United States District Court for the District of Idaho, Typenex claims that the
Company’s transfer agent violated certain transfer instructions issued by the Company. The Company has not been named as
a defendant in this suit and the parties have agreed that the transfer agent will be part of the Northern District litigation.
(The Idaho litigation has not yet been dismissed) The Company maintains that it provided cash to retire the debt owed to Typenex,
and denies that Typenex was entitled to the conversion into Company stock.The Company has retained counsel, has filed counterclaims
against Typenex based upon Typenex’s failure to perform its obligations and intends to vigorously defend itself and pursue
counterclaims.
Item 1A. Risk
Factors.
The Company’s results of operations,
financial condition and cash flows can be adversely affected by various risks. These risks include, but are not limited to, the
principal factors listed below and the other matters set forth in this quarterly report on Form 10-Q. You should carefully consider
all of these risks.
The Company has a history of operating
losses and an accumulated deficit and expects to continue to incur losses for the foreseeable future.
Since inception through March 31, 2015, the
Company has incurred cumulative losses of $14,931,183 and has never generated enough funds through operations to support its business.
The Company has a limited operating history and has primarily engaged in operations relating to the development of its business
plan. Additional capital may be required in order to provide working capital requirements for the next twelve months.
Our independent auditors have expressed
substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.
In their report dated March 31, 2015, our
independent auditors stated that our financial statements for the year ended December 31, 2014 were prepared assuming that we would
continue as a going concern, and that they have substantial doubt about our ability to continue as a going concern. Our auditors’
doubts are based on our net losses and deficits in cash flows. We continue to experience net operating losses since the Company
is still in a development stage. Our ability to continue as a going concern is subject to our ability to generate a profit and/or
obtain necessary funding from outside sources, including by the sale of our securities, or obtaining loans from financial institutions,
where possible. Our continued net operating losses and our auditors’ doubts increase the difficulty of our meeting such goals.
If we are not successful in raising sufficient additional capital, we may not be able to continue as a going concern and our stockholders
may lose their entire investment.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults
Upon Senior Securities.
None.
Item 4. Mine Safety
Disclosures
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
Exhibit |
|
Description |
2.1 |
|
Agreement and Plan of Merger, dated as of December 29, 2010, by and among Superior Silver Mines, Inc., Superior Silver Mines Acquisition Corp., and Clean Wind Energy, Inc. (1) |
2.2 |
|
Plan of Domestication of Superior Silver Mines, Inc., dated December 21, 2010 (1) |
2.3 |
|
Nevada Articles of Domestication of Superior Silver Mines, Inc., dated December 27, 2010 (1) |
2.4 |
|
Idaho Statement of Domestication of Superior Silver Mines, Inc., dated December 22, 2010 (1) |
2.5 |
|
Articles of Merger by and between Clean Wind Energy Tower, Inc. and Superior Silver Mines, Inc. (2) |
3.1 |
|
Articles of Incorporation of Clean Wind Energy Tower, Inc. (1) |
3.2 |
|
Amended Bylaws of Clean Wind Energy Tower, Inc. (3) |
4.1 |
|
Form of Common Stock Certificate (4) |
10.1 |
|
Letter Agreement between Clean Wind Energy, Inc. and Source Capital Group, Inc., dated November 22, 2010 (1) |
10.2 |
|
Deed of Lease, dated December 1, 2010, by and between CKP One, LLC and Clean Wind Energy, Inc. (1) |
10.3 |
|
Lease Agreement, dated October 20, 2010, and effective November 1, 2010, by and between Office Suites PLUS at Annapolis and Clean Wind Energy, Inc. (1) |
10.4 |
|
Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Ronald Pickett, and Amendment dated November 22, 2010 (1) |
10.5 |
|
Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Stephen Sadle, and Amendment dated November 22, 2010 (1) |
10.6 |
|
Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Robert Crabb, and Amendment dated November 22, 2010 (1) |
10.7 |
|
Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and John W. Hanback, and Amendment dated November 22, 2010 (1) |
10.8 |
|
Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Itzhak Tepper, PE, and Amendment dated November 22, 2010 (1) |
10.9 |
|
Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Ownkar Persaud, and Amendment dated November 22, 2010 (1) |
10.10 |
|
Form of Director and Officer Indemnification Agreement (4) |
14.1 |
|
Code of Business Conduct and Ethics (5) |
21.1 |
|
Subsidiaries of the Registrant (4) |
31.1 |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald W. Pickett (President/Chief Executive Officer) |
31.2 |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald W. Pickett (Chief Financial Officer) |
32.1 |
|
Certification of Ronald W. Pickett (President/Chief Executive Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 |
|
Certification of Ronald W. Pickett (Chief Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS |
|
XBRL Instance Document |
101.SCH |
|
XBRL Schema Document |
101.CAL |
|
XBRL Calculation Linkbase Document |
101.LAB |
|
XBRL Label Linkbase Document |
101.PRE |
|
XBRL Presentation Linkbase Document |
101.DEF |
|
XBRL Definition Linkbase Document |
(1) |
|
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on December 30, 2010 and incorporated herein by reference. |
(2) |
|
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on January 21, 2011 and incorporated herein by reference. |
(3) |
|
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on December 28, 2010 and incorporated herein by reference. |
(4) |
|
Filed with the registrant's Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on April 12, 2011 and incorporated herein by reference. |
(5) |
|
Filed with the registrant's Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on April 2, 2012 and incorporated herein by reference. |
SIGNATURES
In accordance with the requirements of
the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Solar Wind Energy Tower, Inc.
Registrant |
|
|
|
|
|
Date: May 15, 2015 |
By: |
/s/ Ronald Pickett |
|
|
|
Ronald Pickett |
|
|
|
Chief Executive Officer (Principal Executive Officer) and Principal Accounting and Financial Officer |
|
EXHIBIT 31.1
CERTIFICATION
I, Ronald W. Pickett, certify that:
1. I
have reviewed this quarterly report on Form 10-Q of Solar Wind Energy Tower, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4. The
registrant other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: May 15, 2015
By: /s/ Ronald W. Pickett
Ronald W. Pickett
President/Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
I, Ronald W. Pickett, certify that:
1. I
have reviewed this quarterly report on Form 10-Q of Solar Wind Energy Tower, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4. The
registrant other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: May 15, 2015
By: /s/ Ronald W. Pickett
Ronald W. Pickett
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
In connection with the Quarter Report of
Solar Wind Energy Tower, Inc. (the "Company") on Form 10-Q for the quarter ended March 31, 2015 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Ronald W. Pickett, President/Chief Executive Officer of
Solar Wind Energy Tower, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Ronald W. Pickett
Ronald W. Pickett
President/Chief Executive Officer
Date: May 15, 2015
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
In connection with the Quarter Report of
Solar Wind Energy Tower Inc. (the "Company") on Form 10-Q for the period ended March 31, 2015 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Ronald W. Pickett, Chief Financial Officer of Solar Wind
Energy Tower, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Ronald W. Pickett
Ronald W. Pickett
Chief Financial Officer
Date: May 15, 2015