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