U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended ~~March~~June 3130, 2016

[ ] o TRANSITION REPORT PURSUANT TO 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		(I.R.S. Employer
Incorporation or Organization)		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 [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 [X] No o [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See ~~the~~ definitions of “"large accelerated filer,”" “"accelerated filer”," “"smaller reporting company”," and “"emerging growth 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☒ Emerging growth company o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o ☐

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 [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 14,300,175,237 shares of Common Stock ($0.0001 par value) as of May 1222, 2017.

Solar Wind Energy Tower, Inc.

FORM 10-Q for the Quarter Ended ~~March~~June 3130, 2016

Index

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets: March 31, 2016 (unaudited) and December 31, 2015	3
Condensed Consolidated Balance Sheets: June 30, 2016 (unaudited) and December 31, 2015	3
Condensed Consolidated Statements of Operations: For the three months ended March 31, 2016 and 2015 (unaudited)	4
Condensed Consolidated Statements of Operations: For the three and six months ended June 30, 2016 and 2015 (unaudited)	4
Condensed Consolidated Statement of Stockholders’ Deficit For the three months ended March 31, 2016 (unaudited)	5
Condensed Consolidated Statement of Stockholders’ Deficit For the six months ended June 30, 2016 (unaudited)	5
Condensed Consolidated Statements of Cash Flows: For the three months ended March 31, 2016 and 2015 (unaudited)	6
Condensed Consolidated Statements of Cash Flows: For the six months ended June 30, 2016 and 2015 (unaudited)	6
Notes to Condensed Consolidated Financial Statements: March 31, 2016 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements: June 30, 2016 (Unaudited)	7
Item 2. Management’s Discussion and Analysis	19
Item 3. Quantitative and Qualitative Disclosures About Material Risk	2425
Item 4. Controls and Procedures	2526
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	2627
Item 1A. Risk Factors	2627
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2627
Item 3. Defaults Upon Senior Securities	2728
Item 4. Mine Safety Disclosures	2728
Item 5. Other Information	2728
Item 6. Exhibits	2728
Signatures	2930

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SOLAR WIND ENERGY TOWER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	June 30,			December 31,
	2016			2015
	(unaudited)
ASSETS
Current assets:
Cash	$	~~680~~436		$	11,219
Total current assets		~~680~~436			11,219
Property and equipment, net		~~1,003~~826			1,180
Other assets:
Deposits		204,209			204,209
Total assets	$	205,~~892~~471		$	216,608
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	~~334~~349,~~486~~792		$	354,918
Accrued liabilities and expenses		~~494~~614,~~954~~986			498,212
Advances from stockholders/officers		~~170~~178,000			170,000
Settlement payable		8050,000			90,000
Notes payable, net of unamortized debt discount of $29 and $407, respectively		348,241			347,863
Notes payable, net of unamortized debt discount of $0 and $407, respectively		348,270			347,863
Convertible notes payable, net of unamortized debt discount of $276,714 and $351,690, respectively		833,519			727,696
Convertible notes payable, net of unamortized debt discount of $134,230 and $351,690, respectively		931,002			727,696
Convertible notes payable, related party		280,000			280,000
Derivative liabilities		1,~~288~~245,~~439~~037			3,492,119
Total current liabilities		3,~~829~~997,~~639~~087			5,960,808
Stockholders' deficit:
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized
Series A Convertible Preferred stock, par value $0.0001 per share, 500,000 shares designated, 393,429 and issued and outstanding as of March 31, 2016 and December 31, 2015		39			39
Series A Convertible Preferred stock, par value $0.0001 per share, 500,000 shares designated, 393,429 and issued and outstanding as of June 30, 2016 and December 31, 2015		39			39
Common stock, par value $0.0001 per share; 20,000,000,000 shares authorized; 5,497,534,816 and 3,628,253,758 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively		549,753			362,825
Common stock, par value $0.0001 per share; 20,000,000,000 shares authorized; 6,215,096,338 and 3,628,253,758 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively		621,510			362,825
Common stock to be issued		420,000			420,000
Additional paid in capital		12,~~664~~686,~~562~~499			12,601,800
Accumulated deficit		(17,~~240~~501,~~767~~650	)		(19,111,294	)
Stockholders' deficit attributable to Solar Wind Energy Tower, Inc.		(3,~~606~~773,~~413~~602	)		(5,726,630	)
Non controlling interest		(17,334	)		(17,570	)
Non-controlling interest		(18,014	)		(17,570	)
Total stockholders' deficit		(3,~~623~~791,~~747~~616	)		(5,744,200	)
Total liabilities and stockholders' deficit	$	205,~~892~~471		$	216,608

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,
	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
OPERATING EXPENSES:
Research and development	$	–		$	5426,~~851~~062		$	–		$	80,913
Selling, general and administrative		~~149~~124,~~837~~801			~~275~~232,~~030~~542			274,638			507,572
Depreciation		177			177			354			354
Total operating expenses		~~150~~124,~~014~~978			~~330~~258,~~058~~781			274,992			588,839
Loss from operations		(~~150~~124,~~014~~978	)		(~~330~~258,~~058~~781	)		(274,992	)		(588,839	)
Other income (expense):
Interest expense		(~~687~~175,~~045~~812	)		(~~546~~684,~~282~~724	)		(862,857	)		(1,231,006	)
Gain (loss) on change in fair value of derivative liabilities		2,707,822			(71,158	)
Loss on settlement of debt		(21,938	)		–			(21,938	)		–
Income (loss) before provision for income taxes		1,870,763			(947,498	)
Gain on change in fair value of derivative liabilities		61,165			680,950			2,768,987			609,792
Provision for income taxes (benefit)		–			–
Income (loss) before provision for income taxes		(261,563	)		(262,555	)		1,609,200			(1,210,053	)
Net Income (loss)		1,870,763			(947,498	)
Provision for income taxes (benefit)		–			–			–			–
Non-controlling interest		(236	)		501
Net (loss) Income		(261,563	)		(262,555	)		1,609,200			(1,210,053	)
NET INCOME (LOSS) ATTRIBUTABLE TO SOLAR WIND ENERGY TOWER, INC.	$	1,870,527		$	(946,997	)
Non-controlling interest		680			543			444			1,044
Net income (loss) per common share, basic	$	0.00		$	(0.00	)
NET (LOSS) INCOME ATTRIBUTABLE TO SOLAR WIND ENERGY TOWER, INC.	$	(260,883	)	$	(262,012	)	$	1,609,644		$	(1,209,009	)
Net income (loss) per common share, diluted	$	0.00		$	(0.00	)
Net (loss) income per common share, basic	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)
Weighted average number of common shares outstanding, basic		4,657,118,327			669,373,661
Net (loss) income per common share, diluted	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)
Weighted average number of common shares outstanding, diluted		20,181,518,842			669,373,661
Weighted average number of common shares outstanding, basic		6,016,956,512			870,620,274			5,337,037,419			770,552,897
Weighted average number of common shares outstanding, diluted		6,016,956,512			870,620,274			20,600,817,244			770,552,897

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~~SIX MONTHS ENDED ~~MARCH~~JUNE 3130, 2016

		Series A Preferred stock							Common stock							Common to be Issued							Additional Paid In				Accumulated			Non-controlling
																	Additional
		Shares				Amount			Shares			Amount				Shares			Amount				Capital				Deficit			Interest			Total
	Series A Preferred stock						Common stock				Common to be Issued						Paid In		Accumulated			Non-controlling
Balance, January 1, 2016			393,429			$	39			3,628,253,758		$	362,825				6,000,000		$	420,000			$	12,601,800			$	(19,111,294	)	$	(17,570	)	$	(5,744,200	)
	Shares			Amount			Shares		Amount		Shares			Amount			Capital		Deficit			Interest			Total
Shares issued in settlement of debt			–				–			1,078,755,200			107,875				–			–				48,952				–			–			156,827
Balance, January 1, 2016		393,429		$	39			3,628,253,758	$	362,825		6,000,000		$	420,000		$	12,601,800	$	(19,111,294	)	$	(17,570	)	$	(5,744,200	)
Shares issued in payment of settlement due			–				–			100,000,000			10,000				–			–				–				–			–			10,000
Shares issued in settlement of debt		–			–			1,496,316,722		149,632		–			–			48,951		–			–			198,583
Shares issued in settlement of related party salaries			–				–			690,525,858			69,053				–			–				13,810				–			–			82,863
Shares issued in payment of settlement due		–			–			400,000,000		40,000		–			–			–		–			–			40,000
Net income (loss)			–				–			–			–				–			–				–				1,870,527			236			1,870,763
Shares issued in settlement of related party salaries		–			–			690,525,858		69,053		–			–			13,810		–			–			82,863
Balance, March 31, 2016 (unaudited)			393,429			$	39			5,497,534,816		$	549,753				6,000,000		$	420,000			$	12,664,562			$	(17,240,767	)	$	(17,334	)	$	(3,623,747	)
Loss on settlement of debt		–			–			–		–		–			–			21,938		–			–			21,938
Net income (loss)		–			–			–		–		–			–			–		1,609,644			(444	)		1,609,200
Balance, June 30, 2016 (unaudited)		393,429		$	39			6,215,096,338	$	621,510		6,000,000		$	420,000		$	12,686,499	$	(17,501,650	)	$	(18,014	)	$	(3,791,616	)

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,
	Six months ended June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$	1,~~870~~609,~~763~~200		$	(~~947~~1,~~498~~210,053	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		~~177~~354			~~177~~354
Amortization of debt discounts		~~202~~345,~~581~~064			~~357~~688,~~681~~645
Amortization of financing costs		~~378~~407			31162,~~172~~907
Non-cash interest		443,329			158,531
Loss on settlement of debt		21,937			–
Non-cash interest		443,329			334,730
Stock based compensation		–			7,144
Change in fair value of derivative liabilities		(2,~~707~~768,~~822~~987	)		71(609,~~158~~792	)
Changes in operating assets and liabilities:
Advances from related party		8,000			–
Settlement payable		–			(30,000	)
Accounts payable and accrued expenses		79228,~~055~~913			32123,~~476~~632
Net cash used in operating activates		(111,~~539~~783	)		(~~319~~532,~~159~~433	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment of option to acquire property		–			(2348,438	)
Net cash used in investing activities		–			(2348,438	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible notes payable		101,000			~~293~~513,000
Net cash provided by financing activities		101,000			~~293~~513,000
Net decrease in cash		(10,~~539~~783	)		(4967,~~597~~871	)
Cash, beginning of period		11,219			88,764
Cash, end of period	$	~~680~~436		$	3920,~~167~~893
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	–		$	–
Income taxes paid	$	–		$	–
Non-cash investing and financing activities:
Non cash investing and financing activities:
Common stock issued in settlement of related party accrued salaries	$	82,863		$	–
Common stock issued in settlement of debt	$	~~166~~238,~~827~~583		$	~~681~~1,~~222~~268,808
Series A preferred stock issued in settlement of related party notes payable and accrued interest	$	–		$	393,426

See the accompanying notes to the unaudited condensed consolidated financial statements

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(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”, “us”, “our”) (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.

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.

Until the consummation of the Merger, the Company’s purpose was to seek, investigate and, if such investigation warranted, acquire an interest in business opportunities presented to it by persons or firms who, or which, desire to seek the perceived advantages of a publicly registered corporation. Because the Company had no operations and only nominal assets until the Merger, it was considered a shell company under rules promulgated by the U.S. Securities and Exchange Commission.

In April 2014, the Company organized Arizona Green Power, LLC (“AGP”), 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. On November 17, 2015, in connection with the Company land option agreement modification and equity financing, the Company reduced its ownership to 94.67%.

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of December 31, 2015, 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.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

~~Interim~~Operating ~~Financial~~results ~~Statements~~for the three and six months ended June 30, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. 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, 2015 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 2, 2017.

Operating results for the three months ended March 31, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. 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, 2015 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 2, 2017.

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 from operations of $~~150~~274,~~014~~992 and $~~330~~588,~~058~~839 for the ~~three~~six month periods ended ~~March~~June 3130, 2016 and 2015, respectively, accumulated deficit of $17,~~240~~501,~~767~~650 and total current liabilities in excess of current assets of $3,~~828~~996,~~959~~651 as of ~~March~~June 3130, 2016.

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 $-0- ~~and~~for the three and six months ended June 30, 2016 and $5426,~~851~~062 and $80,913 for the three and six months ended ~~March~~June 3130, ~~2016 and~~ 2015, 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.

Net Income (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 income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock. Diluted net income (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 June 30, 2016 and the three and six months ended June 30, 2015. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible notes, preferred stock and exercise of warrants. Fully diluted shares for the three and six months ended June 30, 2016 were 21,280,736,337 and 20,600,817,244, respectively, and 1,882,870,363 and 1,782,802,986 for the three and six months ended June 30, 2015, respectively.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

Net Income (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 income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock. Diluted net income (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. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible notes, preferred stock and exercise of warrants. Fully diluted shares for the three months ended March 31, 2016 and 2015 were 20,181,518,842 and 1,169,543,239, 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 and six months ended ~~March~~June 3130, 2016 and 2015 was $-0- and $7,144, 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.

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.

NOTE 2 – DEPOSITS

Long-term deposits are comprised of aggregate of $204,259 of which $200,000 are deposits to acquire approximately 640 acres of land in Yuma County, Arizona at $46,500 per acre. On November 17, 2015, the Company entered into a Fourth Amended Option Agreement (the “Amended Option Agreement”) to the option agreement dated April 11, 2014 with several investors and current land owners.

Pursuant to the terms of the Amended Option Agreement, the land owners agreed to invest $600,000 and defer until closing an additional $450,000 due on the option payment in exchange for a 2.67% equity investment in AGP, Company’s majority owned subsidiary.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016

(unaudited)

Moreover, pursuant to the terms of the option agreement, the investor has also committed an additional $300,000 in exchange for a 1.33% equity investment, $50,000 which has been paid and the additional $250,000 conditioned upon the Company and AGP successfully procuring $5,000,000 or more in additional equity from investors, or such other additional amount as is necessary for the balance of the required pre-development and development costs to be completed.

Further, if the Company and AGP close the acquisition of the Property prior to (a) December 1, 2017, the delayed option payment shall be reduced by $200,000 or (b) July 1, 2016, the delayed option payment shall be reduced by $450,000.

The land owners have the right to terminate the Amended Option Agreement at any time after July 1, 2016 if the Company and AGP have not completed the equity raise prior to July 1, 2016.

In addition, the Company has an aggregate of $4,259 in long term lease deposits.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016

(unaudited)

NOTE 3 – ACCRUED LIABILITIES AND EXPENSES

Accrued liabilities and expenses as of ~~March~~ 31June 30, 2016 and December 31, 2015 consist of the following:

	March 31, 2016		December 31, 2015
	June 30, 2016		December 31, 2015
Accrued payroll	$	~~202~~304,~~882~~132	$	~~227~~27,015
Accrued stock purchase warrants		29,400		29,400
Accrued interest and other		~~262~~281,~~672~~454		241,797
Total	$	~~494~~614,~~954~~986	$	498,212

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.

In addition, during the six months ended June 30, 2016, an officer and major shareholder advanced $8,000 for working capital purposes. The advance is interest free and payable on demand.

NOTE 5 – SETTLEMENT PAYABLE

On July 8, 2014, the Company paid $40,179 ~~against~~ against a Typenex note in a scheduled monthly installment followed by a payment on August 11, 2014 of the balance due of $31,078 to pay the note in full. In as such, Typenex disputed the Company’s right to pay in cash, these final two installments were ~~placed~~ placed in escrow account through the Company’s counsel. In 2016, subsequent to these financial statements, the Company settled ~~all~~ all outstanding claims with Typenex for $90,000. During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company issued ~~100~~400,000,000 shares of its common stock in payment of $1040,000 of the outstanding balance. As of ~~March~~June 3130, 2016 and December 31, 2015, the remaining ~~outstanding~~ outstanding balance was $8050,000 and $90,000, respectively.

NOTE 6 – NOTES PAYABLE

Notes payable as of June 30, 2016 and December 31, 2015 consist of the following:

	June 30, 2016		December 31, 2015
Promissory notes issued June 20, 2012	$	268,270	$	268,270
Note payable issued April 7, 2014, net of unamortized debt discount of $-0- and $407, respectively		80,000		79,593
Total		348,270		347,863
Less current portion		348,270		347,863
Long term portion	$	–	$	–

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.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

~~NOTE~~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. ~~NOTES~~In ~~PAYABLE~~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). This note currently is in default.

Notes payable as of March 31, 2016 and December 31, 2015 consist of the following:

	March 31, 2016		December 31, 2015
Promissory notes issued June 20, 2012	$	268,270	$	268,270
Note payable issued April 7, 2014, net of unamortized debt discount of $29 and $407, respectively		79,971		79,593
Total		348,241		347,863
Less current portion		348,241		347,863
Long term portion	$	–	$	–

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 as of ~~March~~June 3130, ~~2016~~ 2016 and December 31, 2015 consist of the following:

	March 31, 2016		December 31, 2015
	June 30, 2016		December 31, 2015
Convertible promissory notes, due December 31, 2015	$	~~239~~209,000	$	239,000
Convertible promissory note, due October 14, 2015, net of unamortized debt discount of $-0-		–		27,164
Convertible promissory note, due January 5, 2016, net of unamortized debt discount of $323		–		23,177
Convertible promissory note, due March 16, 2016, net of unamortized debt discount of $-0- and $12,066, respectively		75,335		63,269
Convertible promissory note, due December 27, 2015, net of unamortized debt discount of $-0-, in default		5641,010		78,210
Convertible promissory note, due May 15, 2016, net of unamortized debt discount of $7,089 and $21,267, respectively		50,411		36,233
Convertible promissory note, due May 15, 2016, net of unamortized debt discount of $-0- and $21,267, respectively		57,500		36,233
Convertible promissory note, due May 30, 2016, net of unamortized debt discount of $9,452 and $23,630, respectively		48,048		33,870
Convertible promissory note, due May 30, 2016, net of unamortized debt discount of $-0- and $23,630, respectively		57,500		33,870
Convertible promissory note, due March 1, 2016, net of unamortized debt discount of $-0- and $9,401, respectively, in default		43,000		33,599
Convertible promissory note, due July 1, 2016, net of unamortized debt discount of $14,611 and $28,750, respectively		42,889		28,750
Convertible promissory note, due July 1, 2016, net of unamortized debt discount of $314 and $28,750, respectively		57,186		28,750

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

	March 31, 2016			December 31, 2015
	June 30, 2016			December 31, 2015
Convertible promissory note, due July 14, 2016, net of unamortized debt discount of $12,082 and $22,438, respectively		29,918			19,562
Convertible promissory note, due July 14, 2016, net of unamortized debt discount of $1,611 and $22,438, respectively		40,389			19,562
Convertible promissory note, due July 17, 2016, net of unamortized debt discount of $8,637 and $15,768, respectively		20,363			13,232
Convertible promissory note, due July 17, 2016, net of unamortized debt discount of $1,426 and $15,768, respectively		27,574			13,232
Convertible promissory note, due July 30, 2016, net of unamortized debt discount of $9,500 and $16,508, respectively		19,000			11,992
Convertible promissory note, due July 30, 2016, net of unamortized debt discount of $2,414 and $16,508, respectively		26,086			11,992
Convertible promissory note, due February 4, 2016, net of unamortized debt discount of $-0- and $4,562, respectively, in default		29,000			24,438
Convertible promissory note, due May 6, 2016, net of unamortized debt discount of $3,906 and $13,406, respectively		9,464			15,094
Convertible promissory note, due May 6, 2016, net of unamortized debt discount of $-0- and $13,406, respectively		13,370			15,094
Convertible promissory note, due March 4, 2016, net of unamortized debt discount of $-0- and $10,198, respectively, in default		29,000			18,802
Convertible promissory note, due June 9, 2016, net of unamortized debt discount of $7,308 and $16,703, respectively		21,192			11,797
Convertible promissory note, due June 9, 2016, net of unamortized debt discount of $-0- and $16,703, respectively		28,500			11,797
Convertible promissory note, due March 1, 2016, net of unamortized debt discount of $-0- and $9,148, respectively, in default		20,696			11,548
Convertible promissory note, due October 7, 2016, net of unamortized debt discount of $51,785 and $76,186		47,446			23,045
Convertible promissory note, due October 7, 2016, net of unamortized debt discount of $27,112 and $76,186		72,119			23,045
Convertible promissory note, due May 6, 2016, net of unamortized debt discount of $20,236		–			8,764
Convertible promissory note, due November 9, 2016, net of unamortized debt discount of $16,525 and $23,164, respectively		10,475			3,836
Convertible promissory note, due November 9, 2016, net of unamortized debt discount of $9,811 and $23,164, respectively		17,189			3,836
Convertible promissory note, due December 3, 2016, net of unamortized debt discount of $20,496 and $27,936, respectively		9,754			2,314
Convertible promissory note, due December 3, 2016, net of unamortized debt discount of $12,976 and $27,936, respectively		17,274			2,314
Convertible promissory note, due January 7, 2017, net of unamortized debt discount of $57,156		16,764			–
Convertible promissory note, due January 7, 2017, net of unamortized debt discount of $38,778		35,142			–
Convertible promissory note, due January 11, 2017, net of unamortized debt discount of $58,166		15,754
Convertible promissory note, due January 11, 2017, net of unamortized debt discount of $39,788		34,132			–
Total		~~833~~931,~~519~~002			727,696
Less current portion		(~~833~~931,~~519~~002	)		(727,696	)
Long term portion	$	–		$	–

2016 Notes:

JDF Capital, Inc.

On January 7, 2016, the Company entered into a Securities Purchase Agreement with JDF Capital, Inc ("JDF"), for the sale of an 8% convertible note in the principal amount of $73,920 (the "Note"). The financing closed on January 7, 2016. The total net proceeds the Company received from this Offering were $38,000.

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on January 7, 2017. The Note is convertible into common stock, at JDF’s option, at a 50% discount to lowest bid price of the common stock during the 15 trading day period prior to conversion.

LG Capital Funding, LLC

On January 11, 2016, the Company entered ~~into~~ into a Securities Purchase Agreement with LG Capital Funding, LLC ("LG"), for the sale of an 8% convertible note in the ~~principal~~ principal amount of $73,920 (the "Note"). The financing closed on January 11, 2016. The total net proceeds the Company ~~received~~ received from this Offering were $6366,000.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on January 11, 2017. The Note is convertible into common stock, at LG’s option, at a 50% discount to lowest bid price of the common stock during the 15 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.

At the inception of the 2016 Notes, the ~~Company~~ Company determined the aggregate fair value of $~~497~~553,~~659~~093 of embedded derivatives. The fair value of the embedded derivatives was ~~determined~~ determined using the Black Scholes Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected ~~volatility~~ volatility of ~~295~~180.3114% to ~~295~~180.8445%, (3) weighted average risk-free interest rate of 0.63 % to 0.66%, (4) expected life of 1.00 year, and (5) estimated fair value of the Company’s common stock of $0.0002 per share.

The determined fair value of the debt derivatives of $553,093 was charged as a debt discount up to the net proceeds of the notes with the remainder of $443,329 charged to current period operations as non-cash interest expense.

At ~~March~~June 3130, 2016, the Company marked to market the fair value of the debt derivatives and determined a fair value of $1,~~288~~245,~~439~~037. The Company recorded a gain from change in fair value of debt derivatives of $61,165 and $2,~~707~~768,~~822~~987 for the three and six months ended ~~March~~June 3130, 2016. 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 ~~176~~179.9604%, (3) weighted average risk-free interest rate of 0.2126% to 0.5936%, (4) expected life of 0.25 to 0.7853 years, and (5) estimated fair value of the Company’s common stock of $0.0001 per share.

The charge of the amortization of debt ~~discounts~~ discounts and costs for the three and six months ended ~~March~~June 3130, 2016 was $142,483 and ~~2015~~$345,064, ~~was~~respectively, and $~~202~~324,~~581~~943 and $~~357~~688,~~681~~645 for the three and six months ended June 30, 2015, respectively; which was accounted for as interest expense. Also, the Company has accrued interest expense of $~~171~~183,~~860~~063 as of ~~March~~June 3130, 2016.

During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company issued an aggregate of 1,~~078~~496,~~755~~316,~~200~~722 shares of its common stock in settlement of the convertible note payable and related interest. In connection with certain settlements, the Company incurred a $21,938 loss on settlement of debt.

NOTE 8 – 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~~JUNE 3130, 2016

(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.

AsAt the inception of ~~March~~the 31notes, ~~2016,~~ the determined fair value of the debt derivatives ~~was~~of $~~-0-~~262,285 was charged as a debt discount up to the net proceeds of the note.

At ~~March~~June 3130, 2016, the Company marked to ~~market~~ market the fair value of the debt derivatives and determined a fair value of $-0-. The Company did not record a change in fair value of debt derivatives for the ~~three~~six months ended ~~March~~June 3130, 2016. 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 ~~176~~179.9604%, (3) weighted average risk-free interest rate of 0.2126%, (4) expected life of 0.25 years, and (5) estimated fair value of the Company’s common stock of $0.0001 per share.

NOTE 9 – DERIVATIVE LIABILITIES

As described in Notes 7 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 8 for assumptions used to determine fair values.

NOTE 10 – 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~~June 3130, 2016 and December 31, 2015, the Company has 393,429 ~~shares~~ shares of preferred stock issued and outstanding.

Common stock

The Company has authorized 20,000,000,000 ~~shares~~ shares of common stock, with a par value of $0.0001 per share as of ~~March~~June 3130, 2016 and December 31, 2015. As of ~~March~~June 3130, 2016 and December 31, 2015, the Company has 56,~~497~~215,~~534~~096,~~816~~338 and 3,628,253,758, respectively, shares of common stock issued and outstanding.

During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company issued an aggregate of 690,525,858 of its common stock in settlement of $82,863 of accrued officer salaries.

During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company issued ~~100~~400,000,000 shares of its common stock in payment of $1040,000 of the outstanding balance of settlement payable.

NOTE 11 – 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, 2016:

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

Exercise Price		Number Outstanding		Warrants Outstanding Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise price		Number Exercisable		Warrants Exercisable Weighted Average Exercise Price
$	0.00860		11,627,908		0.01		0.00860		11,627,908	$	0.00860
	0.02000		5,000,000		0.97		0.02000		5,000,000		0.02000
	0.10000		2,187,101		2.15		0.10000		2,187,101		0.10000
			18,815,009		0.51				18,815,009	$	0.02222

NOTE 11 – WARRANTS

Warrants

The following table summarizes the changes in warrants outstanding and related prices for the shares of the Company’s common stock at June 30, 2016:

Exercise Price		Number Outstanding		Warrants Outstanding Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise price		Number Exercisable		Warrants Exercisable Weighted Average Exercise Price
	0.02000		5,000,000		0.72		0.02000		5,000,000		0.02000
	0.10000		2,187,101		1.90		0.10000		2,187,101		0.10000
			7,187,101		1.08				7,187,101	$	0.04434

Transactions involving the Company’s warrant issuance are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at December 31, 2015		20,735,009		$	0.02482
Granted		–			–
Canceled		–			–
Expired		(113,~~920~~547,~~000~~908	)		0.05016
Outstanding at March 31, 2016		18,815,009		$	0.02222
Outstanding at June 30, 2016		7,187,101		$	0.04434

NOTE 12 – 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.

On November 17, 2015, the Company entered into a Fourth Amended Option Agreement (the “Amended Option Agreement”) to the option agreement dated April 11, 2014 with several investors and current land owners. Pursuant to the terms of the Amended Option Agreement, the land owners agreed to invest $600,000 and defer until closing an additional $450,000 due on the option payment in exchange for a 2.67% equity investment in AGP, Company’s majority owned subsidiary.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

A reconciliation of the non-controlling income (loss) attributable to the Company:

Net loss attributable to non-controlling ~~interest~~ interest for the three months ended ~~March~~June 3130, 2016:

Net income	$	4,422
Net loss	$	12,752
Average Non-controlling interest percentage		5.333%
Net loss attributable to the non-controlling interest	$	~~236~~680

Net loss attributable to non-controlling ~~interest~~ interest for the ~~three~~six months ended ~~March~~June 3130, ~~2015~~2016:

Net loss	$	~~(37~~8,~~587~~330	)
Average Non-controlling interest percentage		15.33333%
Net loss attributable to the non-controlling interest	$	~~(501~~444	)

~~The~~Net ~~following~~loss ~~table~~attributable ~~summarizes~~to ~~the changes in~~ non-controlling interest for ~~from~~the ~~December~~three ~~31,~~months ~~2015~~ended toJune ~~March 31~~30, ~~2016~~2015:

Balance, December 31, 2015	$	(17,570	)
Net loss	$	40,726
Net income attributable to the non-controlling interest		236
Average Non-controlling interest percentage		1.33%
Balance, March 31, 2016	$	(17,334	)
Net loss attributable to the non-controlling interest	$	543

Net loss attributable to non-controlling interest for the six months ended June 30, 2015:

Net loss	$	78,313
Average Non-controlling interest percentage		1.33%
Net loss attributable to the non-controlling interest	$	1,044

The following table summarizes the changes in non-controlling interest from December 31, 2015 to June 30, 2016:

Balance, December 31, 2015	$	(17,570	)
Net income attributable to the non-controlling interest		(444	)
Balance, June 30, 2016	$	(18,014	)

NOTE 13 – 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 consolidated financial statements consisted of the following items as of March 31, 2016:

	Level 1		Level 2		Level 3		Total
Long-term investments	$	–	$	–	$	–	$	–
Total	$	–	$	–	$	–	$	–
Derivative liabilities	$	–	$	–	$	1,288,439	$	1,288,439
Total	$	–	$	–	$	1,288,439	$	1,288,439

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

~~The~~Items ~~table~~recorded ~~below~~or ~~sets~~measured ~~forth~~at afair ~~summary~~value ofon ~~changes~~a inrecurring ~~the~~basis ~~fair~~in ~~value of~~ the ~~Company’s~~accompanying ~~Level~~consolidated 3 financial ~~liabilities~~statements ~~(derivative~~consisted ~~liability)~~of ~~for~~ the ~~three~~following ~~months~~items ~~ended March~~as 31of June 30, 2016:

	Derivative Liabilities
	Level 1			Level 2		Level 3		Total
Balance, December 31, 2015		3,492,119
Long-term investments	$	–		$	–	$	–	$	–
Transfers in (out) at mark-market value on date of payoff or conversion		(48,951	)
Total	$	–		$	–	$	–	$	–
Transfers in upon initial fair value of derivative liabilities		553,093
Derivative liabilities	$	–		$	–	$	1,245,037	$	1,245,037
Gain from change in fair value of derivative liabilities		(2,707,822	)
Total	$	–		$	–	$	1,245,037	$	1,245,037
Balance, March 31, 2016	$	1,288,439
Total gain for the three months included in earnings relating to the liabilities held at March 31, 2016	$	2,707,439

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 six months ended June 30, 2016:

	Derivative Liabilities
Balance, December 31, 2015		3,492,119

Transfers in (out) at mark-market value on date of payoff or conversion		(31,188	)

Transfers in upon initial fair value of derivative liabilities		553,093

Gain from change in fair value of derivative liabilities		(2,768,987	)

Balance, June 30, 2016	$	1,245,037

Total gain for the six months included in earnings relating to the liabilities held at June 30, 2016	$	2,768,987

Level 3 Liabilities were comprised of our bifurcated convertible debt features on our convertible notes.

NOTE 14 – SUBSEQUENT EVENTS

Common stock issuances:

In April 2016, the Company issued 195,520,800 shares of its common stock in settlement of $19,552 of outstanding notes payable and 300,000,000 as payment of $30,000 towards settlement payable.

In May 2016, the Company issued 222,040,722 shares of its common stock in settlement of $39,967 of outstanding notes payable.

In July 2016, the Company issued 100,000,000 shares of its common stock as payment of $10,000 towards settlement payable.

In August 2016, the Company issued 100,000,000 shares of its common stock as payment of $10,000 towards settlement payable.

In September 2016, the Company issued 100,000,000 shares of its common stock as payment of $10,000 towards settlement payable.

In October 2016, the Company issued 200,000,000 shares of its common stock as payment of $20,000 towards settlement payable and 1,250,000,000 shares of its common stock in payment of $150,000 accrued officer compensation.

In November 2016, the Company issued an aggregate of 1,750,959,177 shares of its common stock in settlement of $315,134 outstanding notes payable and 111,111,111 shares of its common stock in payment of $20,000 accrued compensation.

In December 2016, the Company issued 300,000,000 shares of its common stock in settlement of $170,000 due to shareholders, 1,193,750,000 shares of its common stock in payment of $143,250 accrued officer compensation and 686,877,778 shares of its common stock in settlement of $131,759 outstanding notes payable.

In January 2017, the Company issued 125,000,000 shares of its common stock in payment of $30,000 accrued officer compensation.

SOLAR WIND ENERGY TOWER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(unaudited)

In January 2017, the Company, on behalf of Arizona Green Power LLC, authorized a private placement offering consisting of the sale of 5.5% interest in Arizona Green Power LLC for $137,500 including 1,375,000,000 shares of the Company’s common stock. Eleven existing shareholders participated in the private placement. The Company also issued, as part of the private placement, warrants to purchase 825,000,000 shares of the Company’s common stock at $0.0001, the market price at the time of issuance.

In January 2017, the Company’s Chief Executive Officer exchanged a previous salary accrual of $25,000 for a 1% ownership interest in Arizona Green Power LLC. In addition, was elected as the Managing Member of Arizona Green Power LLC.

In March 2017, the Company issued an aggregate of 119,047,500 shares of its common stock in payment of $50,000 accrued officer salaries.

In April 2017, the Company issued 148,333,333 shares of its common stock in payment of accrued employee compensation.

In April 2017, the Company issued 825,000,000 shares of its common stock in exchange for the exercise of 825,000,000 warrants at an exercise price of $0.0001 per shares, aggregate of $82,500 proceeds.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of ~~the~~ the Company’s financial condition and results of operations should be read in conjunction with the accompanying financial ~~statements~~ statements and related notes thereto for the quarter ended ~~March~~June 3130, 2016, as well as the Company’s consolidated financial ~~statements~~ 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, 2015 filed on March 2, 2017.

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.

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~~references 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~~ 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~~June 3130, 2016.

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 2015 and 2016, 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

RESULTS OF OPERATIONS

Three months ended ~~March~~June 3130, 2016 as compared to three months ended ~~March~~June 3130, 2015.

Revenue

The Company has not generated revenue since inception.

Operating Expenses

Research and development

During the three months ended ~~March~~June 3130, 2016, research and development costs were $-0- compared to $5426,~~851~~062 for the same period last year. The Company’s expenditures ~~for~~ for research and development are dependent on available resources and future expenditures are expected to increase with additional financing.

Selling, general and administrative

During the three months ended ~~March~~June 3130, 2016, selling, general and administrative expenses were $~~149~~124,~~837~~801 as compared to $~~275~~232,~~030~~542 for the same period last year, a 4651% decrease. The primary decrease is due to reduction in expenditures incurred in the current period as compared to same period last year.

Depreciation

Depreciation expense for the three months ended June ~~March 31~~30, 2016 was $177 as compared to $177 for the same period last year.

Other income (expense)

Interest expense

Interest expense for the three months ended ~~March~~June 3130, 2016 was $~~687~~175,~~045~~812 compared to $~~546~~684,~~282~~724 for the same period last year. In the current period, we incurred $~~202~~142,~~581~~483 non-cash debt discount and OID amortization and $~~443,329~~-0- in non-cash interest expense on issued convertible debt as compared to $~~357~~330,~~681 and~~964 and $~~158~~176,~~531~~199, respectively for the same period last year.

Loss on settlement of debt

In connection with the settlement of certain convertible notes, we incurred a loss on settlement of $21,938 for the three months ended June 30, 2016 as compared to $-0- for the same period last year.

Gain (loss) on change in fair value of derivative liabilities

During 2015 and 2016, 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 gain ~~(loss)~~ of $261,~~707,822~~165 and $~~(71~~680,~~158)~~950 on change in fair value of derivative liabilities for the three months ended ~~March~~June 3130, 2016 and 2015, respectively.

Six months ended June 30, 2016 as compared to six months ended June 30, 2015.

Revenue

The Company has not generated revenue since inception.

Operating Expenses

Research and development

During the six months ended June 30, 2016, research and development costs were $-0- compared to $80,913 for the same period last year. The Company’s expenditures for research and development are dependent on available resources and future expenditures are expected to increase with additional financing.

Selling, general and administrative

During the six months ended June 30, 2016, selling, general and administrative expenses were $274,638 as compared to $507,572 for the same period last year, a 46% decrease. The primary decrease is due to reduction in expenditures incurred in the current period as compared to same period last year.

Depreciation

Depreciation expense for the six months ended June 30, 2016 was $354 as compared to $354 for the same period last year.

Other income (expense)

Interest expense

Interest expense for the six months ended June 30, 2016 was $862,857 compared to $1,231,006 for the same period last year. In the current period, we incurred $345,064 non-cash debt discount and OID amortization and $443,329 in non-cash interest expense on issued convertible debt as compared to $688,645 and $334,730, respectively for the same period last year.

Loss on settlement of debt

In connection with the settlement of certain convertible notes, we incurred a loss on settlement of $21,938 for the six months ended June 30, 2016 as compared to $-0- for the same period last year.

Gain (loss) on change in fair value of derivative liabilities

During 2015 and 2016, 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 gain of $2,768,987 and $609,792 on change in fair value of derivative liabilities for the six months ended June 30, 2016 and 2015, 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 decreased by $21,~~120~~952,~~630~~ 938 during the ~~three~~six months ended ~~March~~June 3130, 2016 from a working capital deficit (current liabilities in excess of current assets) of $5,949,589 at December 31, 2015 to a working capital deficit of $3,~~828~~996,~~959~~651 at ~~March~~June 3130, 2016. The decrease in working capital deficit for the six ~~three~~ months ended ~~March~~June 3130, 2016 is due to a combination of reasons, of which the significant factors include:

● Cash had a net decrease in working capital by $10,~~539~~783 for the ~~three~~six months ended ~~March~~June 3130, 2016. The most significant uses and proceeds of cash were:

● Approximately $112,000 of cash consumed in operating activities; ● Proceeds of $101,000 from issuance of convertible notes payable; ● A reduction in our carrying value of our derivative liabilities of $2,~~203~~247,~~680~~082 (a non-cash item)

Total current assets of $~~680~~436 and $11,219 as as of ~~March~~June 3130, 2016 and December 31, 2015, respectively, cash representing 100% as of ~~March~~June 3130, 2016 and December 31, 2015.

Proceeds from the issuance of convertible promissory notes

During the ~~three~~six months ended ~~March~~June 3130, 2016, the Company received proceeds of $101,000 from the issuance of Convertible Promissory Notes.

Cash flow analysis

Cash used in operations was $111,~~539~~783 during the ~~three~~six month period ended ~~March~~June 3130, 2016. During the ~~three~~six month period ended ~~March~~June 3130, 2016, 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~~six months ended ~~March~~June 3130, ~~2015,~~ 2016, we did not have any investing activities.

Cash provided by financing activities was comprised of net proceeds of $101,000 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 from operations of $~~150~~274,~~014~~992 for the ~~three~~six month period ended ~~March~~June 3130, 2016, accumulated deficit of $17,~~240~~501,~~767~~650 and total current liabilities in excess of ~~current~~ current assets of $3,~~828~~996,~~959~~651 as of ~~March~~June 3130, 2016.

Management expects that global economic conditions will continue to present a challenging operating environment through 2016. 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 2016.

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~~June 3130, 2016, the Company ~~had2 full~~had 2 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~~June 3130, 2016, 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~~June 3130, 2016, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably ~~likely~~ likely to materially affect our internal controls over financial reporting.

2526

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 maintained that it provided cash to retire the debt owed to Typenex, and denies that Typenex was entitled to the conversion into Company stock. In 2016, the Company settled all outstanding claims for $90,000.

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~~June 3130, 2016, ~~the~~ the Company has incurred cumulative losses of $1617,~~851~~100,~~848~~168 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~~ 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 2, 2017, our independent auditors stated that our financial statements for the year ended December 31, 2015 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.

2627

~~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)
10.11		Exchange of related party notes and warrants for Series A Preferred Stock (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 2, 2015).
10.12		Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on June 2, 2015).
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.DEF		XBRL Definition Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation 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.

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)

10.11		Exchange of related party notes and warrants for Series A Preferred Stock (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 2, 2015).

10.12		Designation of Series A Convertible Preferred Stock incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on June 2, 2015).

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 12, 2017	By:	/s/ Ronald Pickett
Date: May 22, 2017	By:	/s/ Ronald Pickett
		Ronald Pickett
		Chief Executive
		Officer (Principal Executive Officer) and Principal
		Accounting and Financial Officer

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