Research Frontiers Reports Second Quarter 2020 Financial Results
August 06 2020 - 4:05PM
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 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.+1-516-364-1902
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 andwarrants 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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