Research Frontiers Reports Second Quarter 2020 Financial Results

 In News

WOODBURY, N.Y., Aug. 06, 2020 (GLOBE NEWSWIRE) — Research Frontiers Inc. (Nasdaq: REFR) announced its financial results for its second quarter ended June 30, 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: August 6, 2020, 4:30 PM ET
  • Dial-in Information: 1-888-334-5785
  • Replay: Available on Friday, August 7, 2020 for 90 days at www.SmartGlass-IR.com

Key Second Quarter 2020 Comments:

1. In August 2020, Daimay, the world’s largest supplier of automotive sun visors, licensed Research Frontiers’ SPD-Smart light-control film technology for use in automotive sun visors. SPD-Smart light-control technology will enable Daimay to develop products that automatically and dynamically adjust the sun visor to deal with changing light and glare conditions.
2. In June 2020, Research Frontiers announced that it has been added to the Russell 2000® Index effective on June 29, 2020. The Annual Russell index reconstitution captures the 4,000 largest US stocks ranking them by total market capitalization. Membership in the U.S. Russell 2000 Index® remains in place for one year and also means automatic inclusion in the appropriate growth and value style indices. Russell indices are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies.
3. As discussed on our last investor conference call, 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.
4. The Company’s fee income from licensing activities for the six months ended June 30, 2020 was $532,286 as compared to $719,692 for the six months ended June 30, 2019.

  • Lower fees in the automotive and aircraft 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 architectural and display markets.
5. Total expenses decreased by $452,011, or 20%, for the for the six months ended June 30, 2020 as compared to the same period in 2019.
6. The Company applied for and received $202,052 in proceeds from the Paycheck Protection Program (“PPP Loan”) made available under the CARES Act. The PPP Loan is intended to offer businesses hurt by the COVID-19 pandemic economic assistance with the potential for the principal to be forgiven based on certain expenses incurred during the first 24 weeks after the issuance of the PPP Loan.

  • The Company estimates that $194,140 of the PPP Loan principal will be forgiven based on payroll and other expenses incurred through June 30, 2020, and all or substantially all of the remaining loan will be forgiven under the terms of the CARES Act during the third quarter of 2020.
7. As of June 30, 2020, the Company had cash and cash equivalents of $5,841,346 and working capital of $6,270,142.

  • Based upon the Company’s projected cash flow shortfall of approximately $450,000-500,000 per quarter, the Company expects 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 www.SmartGlass.com, and on FacebookTwitterLinkedIn 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.

CONTACT:
Seth L. Van Voorhees
Chief Financial Officer
Research Frontiers Inc.
+1-516-364-1902
Info@SmartGlass.com

RESEARCH FRONTIERS INCORPORATED
Consolidated Balance Sheets
Unaudited

  June 30, 2020

(Unaudited)
  December 31, 2019
 
Assets        
         
Current assets:        
Cash and cash equivalents $5,841,346  $6,591,960 
Royalties receivable, net of reserves of $944,052 as of
June 30, 2020 and $1,135,598 as of December 31, 2019
  652,520   656,062 
Prepaid expenses and other current assets  138,473   58,835 
Total current assets  6,632,339   7,306,857 
         
Fixed assets, net  50,942   141,720 
Operating lease ROU assets  693,395   773,989 
Deposits and other assets  33,567   33,567 
Total assets $7,410,243  $8,256,133 
         
Liabilities and Shareholders’ Equity        
         
Current liabilities:        
Current portion of operating lease liabilities $163,204  $163,236 
Accounts payable  59,438   169,750 
Accrued expenses and other  83,342   46,709 
Deferred other income liability  7,912    
Deferred revenue  48,301   7,734 
Total current liabilities  362,197   387,429 
         
Operating lease liabilities, net of current portion  731,306   812,596 
Total liabilities  1,093,503   1,200,025 
         
Shareholders’ equity:        
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 31,575,786 in 2020 and 31,254,262 in 2019  3,158   3,125 
Additional paid-in capital  122,837,069   122,552,895 
Accumulated deficit  (116,523,487)  (115,499,912)
Total shareholders’ equity  6,316,740   7,056,108 
         
Total liabilities and shareholders’ equity $7,410,243  $8,256,133 


RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Operations
Unaudited

  Six Months Ended June 30,  Three Months Ended June 30, 
  2020  2019  2020  2019 
             
Fee income $532,286  $719,692  $176,113  $301,035 
                 
Operating expenses  1,452,404   1,690,520   631,963   939,355 
Research and development  330,049   543,944   146,731   313,981 
Total expenses  1,782,453   2,234,464   778,694   1,253,336 
                 
Operating loss  (1,250,167)  (1,514,772)  (602,581)  (952,301)
                 
Warrant market adjustment     (652,025)     (404,435)
Other income – PPP loan forgiveness  194,140      194,140    
Net investment income  32,452   12,422   9,460   6,258 
                 
Net loss $(1,023,575) $(2,154,375) $(398,981) $(1,350,478)
                 
Basic and diluted net loss per common share $(0.03) $(0.07) $(0.01) $(0.05)
                 
Basic and diluted weighted average number of common shares outstanding  31,398,818   28,909,306   31,474,431   29,589,084 


RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Cash Flows
Unaudited

  Six Months Ended June 30, 
  2020  2019 
Cash flows from operating activities:        
Net loss $(1,023,575) $(2,154,375)
Adjustments to reconcile net loss to net cash used in operating activities:        
         
Depreciation and amortization  87,276   95,445 
Stock-based compensation     356,228 
Other income – PPP loan forgiveness  (194,140)   
Bad debts expense  53,217   22,667 
Warrant market adjustment     652,025 
Change in assets and liabilities:        
Royalty receivables  (49,675)  (105,780)
Prepaid expenses and other current assets  (79,638)  (49,743)
Accounts payable and accrued expenses  (73,679)  (115,475)
Deferred revenue  40,567   (14,668)
Net cash used in operating activities  (1,239,647)  (1,313,676)
         
Cash flows from investing activities:        
Purchases of fixed assets  (939)  (62,968
Proceeds from the sale of fixed assets  3,713    
Net cash provided by (used in) investing activities  2,774   (62,968)
         
Cash flows from financing activities:        
Net proceeds from issuances of common stock and
warrants and exercise of options and warrants
  284,207   5,705,898 
Proceeds from PPP Program Funding  202,052    
Net cash provided by financing activities  486,259   5,705,898 
         
Net (decrease) / increase in cash and cash equivalents  (750,614  4,329,254 
         
Cash and cash equivalents at beginning of period  6,591,960   2,969,416 
Cash and cash equivalents at end of period $5,841,346  $7,298,670 

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