Research Frontiers Reports First Quarter 2019 Financial Results
May 14 2019 - 4:05PM
Research Frontiers Inc. (Nasdaq: REFR) announced its financial
results for its first quarter ended March 31, 2019. 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: May 14, 2019, 4:30 PM ET
- Dial-in Information: 1-888-334-5785
- Replay: Available on Wednesday, May 15, 2019
for 90 days at www.SmartGlass-IR.com
Key First Quarter 2019 Comments:
1) In February 2019, Gauzy Ltd. announced its
second production facility in Stuttgart, Germany to produce
SPD-Smart light control film for the entire SPD-SmartGlass
industry
- This state-of-the-art facility with
specially-designed coating and curing areas that will give Gauzy
the capacity to coat over one million square meters of SPD film per
year.
- Gauzy expects the new facility to be in production by the
summer of 2019.
2) The Company’s fee income from licensing
activities for the three months ended March 31, 2019 was $418,657
as compared to $433,269 for the three months ended March 31, 2018
representing a $14,612 decrease between these two periods.
- When non-recurring fee income items
are eliminated, fee income would have increased by $26,384 in the
first quarter of 2019 as compared to the first quarter of
2018.
- Lower fee income from the
architectural market was partially offset by higher levels of fee
income in automotive, aircraft and display market sectors.
3) Fee income as reported increased by $47,861,
or 13% in the first quarter of 2019 as compared to the fourth
quarter of 2018.
4) Expenses declined by $247,312, or -20.1%, for
the 3-month period ending March 31, 2019 as compared to the same
period in 2018 due to lower payroll, patent cost and other cost
reduction initiatives of the Company.
5) The Company’s net loss was $803,897 ($0.03
per common share) for the three months ended March 31, 2019 as
compared to $793,767 ($0.03 per common share) for the three months
ended March 31, 2018.
- The Company’s net loss would have
been $556,307 ($0.02 per common share) for the three months ended
March 31, 2019, as compared to $793,767 ($0.03 per common share)
for the three months ended March 31, 2018, or $240,460 lower prior
to a non-cash accounting expense of $247,590 for marking to market
the value of certain warrants issued as part of an equity offering
during the third quarter of 2018.
6) Cash and cash equivalents increased by
$369,097 since the end of 2018 principally as a result of cash
proceeds of $1,101,782 from the issuance of common stock in
connection with the exercise of warrants during the three months
ended March 31, 2019 that was partially offset by cash used in
operation during that period.
7) The Company adopted the Financial Accounting
Standards Board’s Standard, Leases (Topic 842), as amended. The
standard requires all leases to be recorded on the balance sheet as
a right of use asset and a lease liability. At adoption on January
1, 2019, an operating lease liability of $1,114,000 and the
operating lease right of use asset of $941,000 were recorded on the
balance sheet.
8) On March 27, 2019 Joseph M. Harary, presented
the benefits of SPD-SmartGlass to the Automotive Industry at the
Automotive Glazing Summit in Berlin, Germany. On May 13, 2019 Mr.
Harary demonstrated at a conference in Novi, Michigan how
SPD-SmartGlass can help electric and internal combustion engine
vehicles run more efficiently, drive farther, and make occupants
safer and more comfortable.
- These addresses focused on a real-world analysis of the use,
benefits and reliability of SPD-SmartGlass in automotive and other
glazings.
- Some of the benefits include significant heat reduction inside
the vehicle (by up to 18ºF/10ºC), UV protection, glare control,
reduced noise and reduced fuel consumption.
- Independent calculations also show that use of SPD-SmartGlass
can reduce CO2 emissions by four grams per kilometer and
increase the driving range of electric vehicles by approximately
5.5 percent.
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 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.
CONTACT:Seth L. Van VoorheesChief Financial
OfficerResearch Frontiers
Inc.+1-516-364-1902Info@SmartGlass.com
RESEARCH FRONTIERS INCORPORATED Consolidated
Balance Sheets Unaudited
|
|
March 31, 2019 Unaudited |
|
|
December 31, 2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,338,513 |
|
|
$ |
2,969,416 |
|
Royalties receivable, net of reserves of $1,094,774 at March 31,
2019 and December 31, 2018 |
|
|
764,362 |
|
|
|
689,677 |
|
Prepaid expenses and other current assets |
|
|
151,444 |
|
|
|
52,729 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
4,254,319 |
|
|
|
3,711,822 |
|
|
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
268,812 |
|
|
|
313,177 |
|
Operating lease Right of Use
assets |
|
|
897,322 |
|
|
|
- |
|
Deposits and other assets |
|
|
33,567 |
|
|
|
33,567 |
|
Total assets |
|
$ |
5,454,020 |
|
|
$ |
4,058,566 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of operating lease liability |
|
$ |
158,105 |
|
|
$ |
- |
|
Accounts payable |
|
|
70,007 |
|
|
|
133,486 |
|
Accrued expenses and other |
|
|
92,134 |
|
|
|
273,606 |
|
Deferred revenue |
|
|
51,221 |
|
|
|
50,570 |
|
Total current liabilities |
|
|
371,467 |
|
|
|
457,662 |
|
|
|
|
|
|
|
|
|
|
Operating lease liability, net of current portion |
|
|
936,174 |
|
|
|
- |
|
Warrant liability |
|
|
749,004 |
|
|
|
501,414 |
|
Total liabilities |
|
|
2,056,645 |
|
|
|
959,076 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.0001 per share; authorized 100,000,000
shares, issued and outstanding 28,666,831 as of March 31, 2019 and
27,665,211 as of December 31, 2018 |
|
|
2,867 |
|
|
|
2,767 |
|
Additional paid-in capital |
|
|
115,889,339 |
|
|
|
114,787,657 |
|
Accumulated deficit |
|
|
(112,494,831 |
) |
|
|
(111,690,934 |
) |
Total shareholders’ equity |
|
|
3,397,375 |
|
|
|
3,099,490 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
5,454,020 |
|
|
$ |
4,058,566 |
|
RESEARCH FRONTIERS INCORPORATED Consolidated
Statements of Operations Unaudited
|
|
Three Months Ended March 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Fee income |
|
$ |
418,657 |
|
|
$ |
433,269 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
751,166 |
|
|
|
1,009,825 |
|
Research and development |
|
|
229,963 |
|
|
|
218,616 |
|
Total Expenses |
|
|
981,129 |
|
|
|
1,228,441 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(562,472 |
) |
|
|
(795,172 |
) |
|
|
|
|
|
|
|
|
|
Warrant market adjustment |
|
|
(247,590 |
) |
|
|
- |
|
Net investment income |
|
|
6,165 |
|
|
|
1,405 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(803,897 |
) |
|
|
(793,767 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
common share |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
|
|
28,221,975 |
|
|
|
24,691,996 |
|
RESEARCH FRONTIERS INCORPORATED Consolidated
Statements of Cash Flows Unaudited
|
|
Three months ended March 31, |
|
|
|
2019 |
|
|
2018 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(803,897 |
) |
|
$ |
(793,767 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
48,919 |
|
|
|
44,879 |
|
Warrant market adjustment |
|
|
247,590 |
|
|
|
- |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
Royalty receivables |
|
|
(74,685 |
) |
|
|
(81,741 |
) |
Prepaid expenses and other current assets |
|
|
(98,715 |
) |
|
|
(61,355 |
) |
Accounts payable and accrued expenses |
|
|
(52,414 |
) |
|
|
53,765 |
|
Deferred revenue |
|
|
651 |
|
|
|
152,316 |
|
Net cash used in operating activities |
|
|
(732,551 |
) |
|
|
(685,903 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of fixed assets |
|
|
(134 |
) |
|
|
(5,399 |
) |
Net cash used in investing activities |
|
|
(134 |
) |
|
|
(5,399 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Net proceeds from issuances of
common stock and warrants and exercise of options and warrants |
|
|
1,101,782 |
|
|
|
1,250,000 |
|
Net cash provided by financing activities |
|
|
1,101,782 |
|
|
|
1,250,000 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
|
369,097 |
|
|
|
558,698 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
|
|
2,969,416 |
|
|
|
1,737,847 |
|
Cash and cash equivalents at
end of period |
|
$ |
3,338,513 |
|
|
$ |
2,296,545 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash activities: |
|
|
|
|
|
|
|
|
Right of use assets obtained
in connection with the adoption of FASB ASC 842 |
|
|
941,284 |
|
|
|
- |
|
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