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Research Frontiers Reports First Quarter 2019 Financial Results

Management to Host Conference Call at 4:30 p.m.

WOODBURY, N.Y., May 14, 2019 (GLOBE NEWSWIRE) -- Research Frontiers Inc. (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 (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.

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

Consolidated Balance Sheets

    March 31, 2019
    December 31, 2018  
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  

Consolidated Statements of Operations

    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  

Consolidated Statements of Cash Flows

    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