Research Frontiers Reports First Quarter 2020 Financial Results

 In News

WOODBURY, N.Y., May 07, 2020 (GLOBE NEWSWIRE) — Research Frontiers Inc. (Nasdaq: REFR) announced its financial results for its first quarter ended March 31, 2020. Management will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial and operating results as well as recent developments.

Who: Joseph M. Harary, President & CEO, Seth Van Voorhees, CFO
Date/Time: Thursday, May 7, 2020, 4:30 PM ET
Dial-in Information: 1-888-334-5785
Replay: Available on Friday, May 8, 2020 for 90 days at
Key First Quarter 2020 Comments:

1) In April 2020, Gauzy Ltd. announced that it secured Series C investments from Hyundai Motor Company, Blue Red Partners VC, and Avery Dennison.

  • This strategic investment marks the first known equity investment by an automotive OEM in Research Frontiers’ entire industry.
  • As part of the announcement of this investment, Gauzy confirmed that its state-of-the-art material synthesis facility in Israel, and its custom SPD production line strategically located in Germany are currently operating and producing SPD emulsion and light control film for the automotive, aircraft, and architectural industries, with modified staffing and procedures to protect Gauzy’s employees during the COVID-19 pandemic.
  • In January 2020, Research Frontiers, Gauzy Ltd. and their customers showed 175 thousand attendees at this year’s CES new ways to benefit from SPD-SmartGlass.

2) On March 11, 2020 the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. As a result, the Company expects operations at its facility to be affected in some capacity, as the COVID-19 virus continues to proliferate and the federal, state and local governments under which we operate continue to adopt new rules.

  • The Company has put in place enhanced procedures, such as restricting international and domestic travel, adopting a variety of steps designed to ensure social distancing in our facilities, including working remotely where available, and increasing our cleaning and sanitizing procedures in our facilities, in an effort to protect its employees and communities.
  • The Company currently does not have the ability to assess whether the COVID-19 pandemic is likely to have a material impact on our near-term financial results. Most of the products using the Company’s technology are manufactured by licensees overseas in Europe and Asia who have been similarly affected by the pandemic. The disruption caused by COVID-19 could result in lower levels of sale activity for products using our technology resulting in lower level of royalties owed to us from the sale of these products. The duration of the potential business disruptions and related financial impact cannot be reasonably estimated at this time.

3) The Company’s fee income from licensing activities for the three months ended March 31, 2020 was $356,173 as compared to $418,657 for the three months ended March 31, 2019 representing a $62,484 (14.9%) decrease between these two periods.

  • Lower fees in the automotive, aircraft and architectural markets (believed to be related to temporary customer shutdowns in these industries due to the COVID-19 pandemic) was partially offset by higher fee income from licensees in the display markets.

4) Expenses increased by $22,630, or 2.3%, for the 3-month period ending March 31, 2020 as compared to the same period in 2019 due to higher payroll, marketing and investor relations costs partially offset by lower patent, legal and professional costs and other cost reduction initiatives of the Company.

  • Total expenses plus the warrant market adjustment line items declined by $224,960 in the first quarter of 2020 compared to the first quarter of 2019.

5) Compared to the first quarter of 2019, the Company’s net loss for the first quarter of 2020 was reduced by $179,303 to $624,594 ($0.02 per common share) for the three months ended March 31, 2020 as compared to $803,897 ($0.03 per common share) for the three months ended March 31, 2019.

6) As of March 31, 2020, the Company had cash and cash equivalents of $5,837,395 and working capital of $6,343,149.

  • Our quarterly projected cash flow shortfall, based on our current operations adjusted for any non-recurring cash expenses for the next 12 months, is approximately $450,000-500,000 per quarter.
  • Based on this burn rate, we expect to have sufficient working capital for at least the next 34 months of operations.

For more details, please see the Company’s Quarterly Report on Form 10-Q which was filed today with the SEC, the contents of which are incorporated by reference herein.

About Research Frontiers

Research Frontiers (Nasdaq: REFR) is a publicly traded technology company and the developer of patented SPD-Smart light-control film technology which allows users to instantly, precisely and uniformly control the shading of glass or plastic products, either manually or automatically. Research Frontiers has licensed its smart glass technology to over 40 companies that include well known chemical, material science and glass companies. Products using Research Frontiers’ smart glass technology are being used in tens of thousands of cars, aircraft, yachts, trains, homes, offices, museums and other buildings. For more information, please visit our website at, and on Facebook, Twitter, LinkedIn and YouTube.

Note: From time to time Research Frontiers may issue forward-looking statements which involve risks and uncertainties. This press release contains forward-looking statements. Actual results, especially those reliant on activities by third parties, could differ and are not guaranteed. Any forward-looking statements should be considered accordingly. “SPD-Smart” and “SPD-SmartGlass” are trademarks of Research Frontiers Inc.

Seth L. Van Voorhees
Chief Financial Officer
Research Frontiers Inc.


Condensed Consolidated Balance Sheets

March 31, 2020
December 31, 2019
Current assets:
Cash and cash equivalents $ 5,837,395 $ 6,591,960
Royalties receivable, net of reserves of $885,598 as of March 31, 2020 and $1,135,598 as of December 31, 2019 746,653 656,062
Prepaid expenses and other current assets 182,092 58,835
Total current assets 6,766,140 7,306,857
Fixed assets, net 94,083 141,720
Operating lease ROU assets 733,691 773,989
Deposits and other assets 33,567 33,567
Total assets $ 7,627,481 $ 8,256,133
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of operating lease liabilities $ 163,198 $ 163,236
Accounts payable 67,934 169,750
Accrued expenses and other 112,936 46,709
Deferred revenue 78,923 7,734
Total current liabilities 422,991 387,429
Operating lease liabilities, net of current portion 772,976 812,596
Total liabilities 1,195,967 1,200,025
Shareholders’ equity:
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 31,411,107 in 2020 and 31,254,262 in 2019 3,141 3,125
Additional paid-in capital 122,552,879 122,552,895
Accumulated deficit (116,124,506) (115,499,912)
Total shareholders’ equity 6,431,514 7,056,108
Total liabilities and shareholders’ equity $ 7,627,481 $ 8,256,133

Condensed Consolidated Statements of Operations

Three Months Ended March 31,
2020 2019
Fee income $ 356,173 $ 418,657
Operating expenses 820,441 751,166
Research and development 183,318 229,963
Total expenses 1,003,759 981,129
Operating loss (647,586) (562,472)
Warrant market adjustment (247,590)
Net investment income 22,992 6,165
Net loss $ (624,594) $ (803,897)
Basic and diluted net loss per common share $ (0.02) $ (0.03)
Weighted average number of common shares outstanding 31,323,205 28,221,975

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,
2020 2019
Cash flows from operating activities:
Net loss $ (624,594) $ (803,897)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 44,619 48,919
Warrant market adjustment 247,590
Bad debts expense (recovery) (5,237)
Change in assets and liabilities:
Royalty receivables (85,354) (74,685)
Prepaid expenses and other current assets (123,257) (98,715)
Accounts payable and accrued expenses (35,589) (52,414)
Deferred revenue 71,189 651
Net cash used in operating activities (758,223) (732,551)
Cash flows from investing activities:
Purchases of fixed assets (55) (134)
Proceeds from sale of fixed assets 3,713
 Net cash provided by (used in) investing activities 3,658 (134)
Cash flows from financing activities:
Net proceeds from issuances of common stock and warrants
and exercise of options and warrants
Net cash provided by financing activities 1,101,782
Net (decrease) increase in cash and cash equivalents (754,565) 369,097
Cash and cash equivalents at beginning of period 6,591,960 2,969,416
Cash and cash equivalents at end of period $ 5,837,395 $ 3,338,513

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