Research Frontiers Reports Fourth Quarter and Full Year 2019 Financial Results
March 12 2020 - 4:05PM
Research Frontiers Inc. (Nasdaq: REFR) announced its financial
results for its fourth quarter and full year ended December 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: Thursday, March 12, 2020 at 4:30PM
ET
- Dial-in Information: 1-888-334-5785
- Questions: Email
to Questions@SmartGlass.com
- Replay: Available on Friday, March 13, 2020
for 90 days at www.SmartGlass-IR.com
Key Comments:
- In December 2019, Gauzy celebrated
the opening of its second production facility in Stuttgart, Germany
to produce SPD-Smart light control film for the entire
SPD-SmartGlass industry. New and improved film from this new
facility is currently being shipped to customers worldwide.
- This state-of-the-art facility, with specially designed coating
and curing areas, gives Gauzy the capacity to coat over one million
square meters of SPD film per year in widths of up to 1.8
meters.
- In December 2019, Glatic Co.
acquired a license from Research Frontiers to produce and sell
SPD-SmartGlass smart windows for the South Korean architectural
market.
- The Company’s fee income from
licensing activities for the year ended December 31, 2019 was
$1,564,024 as compared to $1,488,642 for the year ended December
31, 2018 representing a $75,382 increase between these two
periods.
- This increase in revenues was principally the result of higher
royalty income from licensees focused on automotive and
architectural markets. Royalty income from the automotive and
architectural markets was up over 40% in 2019 compared with
2018.
- When operations from the Company’s suspended VariGuard business
unit are factored out, fee income for 2019 would have been $130,316
(9%) higher than for 2018.
- The amount of SPD light-control film sold in 2019 reached a
twelve-year record high.
- Expenses increased by $857,168 for the year ended December 31,
2019 to $4,764,029 from $3,906,861 for the year ended December 31,
2018.
- The Company’s net loss increased by
$1,122, 852 to $3,808,978 ($0.13 per common share) for the year
ended December 31, 2019 as compared to $2,686,128 ($0.10 per common
share) for the year ended December 31, 2018.
- Approximately $1,310,236 of the
increase in net loss between these two periods were non-cash
accounting expenses relating to the issuance of options and
warrants, and other one-time charges. Without these items, the
Company’s net loss for 2019 would have been $2,108,039 ($0.07 per
common share) or $187,386 higher than in 2018.
|
|
2019 |
|
|
2018 |
|
|
Change $ |
|
Net Loss |
|
$ |
(3,808,978 |
) |
|
$ |
(2,686,128 |
) |
|
$ |
(1,122,850 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Options & Warrants
Issued |
|
|
841,612 |
|
|
|
69,309 |
|
|
|
772,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Market Value
Adjustment |
|
|
652,025 |
|
|
|
278,044 |
|
|
|
373,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bad Debt/Impairment of Fixed
Assets |
|
|
207,302 |
|
|
|
43,350 |
|
|
|
163,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss |
|
$ |
(2,108,039 |
) |
|
$ |
(2,295,425 |
) |
|
$ |
187,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss Per Common
Share |
|
$ |
(0.07 |
) |
|
$ |
(0.09 |
) |
|
$ |
0.02 |
|
- During 2019, the Company’s cash and
cash equivalents balance increased by $3,622,544 principally as a
result of cash proceeds of $5,770,545 from the sale of common stock
and warrants and the exercise of options and warrants.
- At December 31, 2019 the Company had cash and cash equivalents
of $6,591,960 and working capital of $6,919,428
- The Company currently believes that its current cash and cash
equivalents will fund its operations for at least the next 36
months.
Non-GAAP Financial Information
In addition to financial measures prepared in accordance with
accounting principles generally accepted in the United States
(“GAAP”), from time to time we may use or publicly disclose certain
“non-GAAP financial measures” in the course of our financial
presentations, earnings releases, earnings conference calls and
otherwise. For these purposes, the U.S. Securities and Exchange
Commission (“SEC”) defines a “non-GAAP financial measure” as a
numerical measure of historical or future financial performance,
financial positions or cash flows that (i) excludes amounts, or is
subject to adjustments that effectively exclude amounts, included
in the most directly comparable measure calculated and presented in
accordance with GAAP in financial statements, and (ii) includes
amounts, or is subject to adjustments that effectively include
amounts, that are excluded from the most directly comparable
measure so calculated and presented.
Non-GAAP financial measures are provided as
supplemental information to investors to provide an alternative
method for assessing our financial condition and operating results.
We believe that these non-GAAP measures, when taken together with
our GAAP financial measures, allow us and our investors to better
evaluate our performance and profitability. These measures are not
in accordance with or a substitute for GAAP, and they may be
different from or inconsistent with non-GAAP financial measures
used by other companies. These measures should be used in addition
to and in conjunction with results presented in accordance with
GAAP and should not be relied upon to the exclusion of GAAP
financial measures.
Pursuant to the requirements of Regulation G,
whenever we refer to a non-GAAP financial measure in this press
release, we will also generally present the most directly
comparable financial measure calculated and presented in accordance
with GAAP, along with a reconciliation of the differences between
the non-GAAP financial measure we reference and such comparable
GAAP financial measure.
Adjusted Net Loss
“Adjusted Net Loss” is defined as net loss
adjusted to exclude non-cash expenses related to stock-based
compensation, warrants, and from time to time, other non-cash or
nonrecurring items. We use Adjusted Net Loss to evaluate operating
performance. We further believe that the presentation of Adjusted
Net Loss is relevant and useful for investors because it allows
investors to view results in a manner similar to the method used by
management.
For more details, please see the Company’s
Annual Report on Form 10-K which was filed today with the SEC, the
contents of which are incorporated by reference herein.
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.
CONTACT:Seth L. Van VoorheesChief Financial
OfficerResearch Frontiers
Inc.+1-516-364-1902Info@SmartGlass.com
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 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.
RESEARCH FRONTIERS INCORPORATED Unaudited
Consolidated Balance Sheets December 31, 2019 and 2018
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
6,591,960 |
|
|
$ |
2,969,416 |
|
Royalties receivable, net of reserves of $1,135,598 in 2019 and
$1,094,774 in 2018 |
|
|
656,062 |
|
|
|
689,677 |
|
Prepaid expenses and other current assets |
|
|
58,835 |
|
|
|
52,729 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
7,306,857 |
|
|
|
3,711,822 |
|
|
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
141,720 |
|
|
|
313,177 |
|
Operating lease ROU
assets |
|
|
773,989 |
|
|
|
- |
|
Deposits and other assets |
|
|
33,567 |
|
|
|
33,567 |
|
Total assets |
|
$ |
8,256,133 |
|
|
$ |
4,058,566 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of operating lease liability |
|
$ |
163,236 |
|
|
$ |
- |
|
Accounts payable |
|
|
169,750 |
|
|
|
133,486 |
|
Accrued expenses and other |
|
|
46,709 |
|
|
|
273,606 |
|
Deferred revenue |
|
|
7,734 |
|
|
|
50,570 |
|
Total current liabilities |
|
|
387,429 |
|
|
|
457,662 |
|
|
|
|
|
|
|
|
|
|
Operating lease liability, net of current portion |
|
|
812,596 |
|
|
|
- |
|
Warrant liability |
|
|
- |
|
|
|
501,414 |
|
Total liabilities |
|
|
1,200,025 |
|
|
|
959,076 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, par value $0.0001 per share; authorized 100,000,000
shares, issued and outstanding 31,254,262 in 2019 and 27,665,211 in
2018 |
|
|
3,125 |
|
|
|
2,767 |
|
Additional paid-in capital |
|
|
122,552,895 |
|
|
|
114,787,657 |
|
Accumulated deficit |
|
|
(115,499,912 |
) |
|
|
(111,690,934 |
) |
Total shareholders’ equity |
|
|
7,056,108 |
|
|
|
3,099,490 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
8,256,133 |
|
|
$ |
4,058,566 |
|
RESEARCH FRONTIERS INCORPORATED Unaudited
Consolidated Statements of Operations Years ended December 31, 2019
and 2018
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Fee income |
|
$ |
1,564,024 |
|
|
$ |
1,488,642 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
3,677,740 |
|
|
|
3,043,460 |
|
Research and development |
|
|
1,035,623 |
|
|
|
863,401 |
|
Loss on impairment of fixed
asset |
|
|
50,666 |
|
|
|
- |
|
Total Expenses |
|
|
4,764,029 |
|
|
|
3,906,861 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(3,200,005 |
) |
|
|
(2,418,219 |
) |
|
|
|
|
|
|
|
|
|
Warrant market adjustment |
|
|
(652,025 |
) |
|
|
(278,044 |
) |
Net investment income |
|
|
43,052 |
|
|
|
10,135 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,808,978 |
) |
|
$ |
(2,686,128 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
common share |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
|
|
30,011,556 |
|
|
|
25,956,232 |
|
RESEARCH FRONTIERS INCORPORATED Unaudited
Consolidated Statements of Shareholders’ Equity Years ended
December 31, 2019 and 2018
|
|
Common Stock |
|
|
Additional Paid-in |
|
|
Accumulated |
|
|
|
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2018 |
|
|
24,043,846 |
|
|
$ |
2,404 |
|
|
$ |
111,627,789 |
|
|
$ |
(109,062,827 |
) |
|
$ |
2,567,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adoption of ASC 606 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
58,021 |
|
|
|
58,021 |
|
Issuance of capital stock |
|
|
3,562,809 |
|
|
|
357 |
|
|
|
3,026,273 |
|
|
|
- |
|
|
|
3,026,630 |
|
Exercise of options and
warrants |
|
|
58,556 |
|
|
|
6 |
|
|
|
64,286 |
|
|
|
- |
|
|
|
64,292 |
|
Share-based compensation |
|
|
- |
|
|
|
- |
|
|
|
69,309 |
|
|
|
- |
|
|
|
69,309 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,686,128 |
) |
|
|
(2,686,128 |
) |
Balance, December 31,
2018 |
|
|
27,665,211 |
|
|
|
2,767 |
|
|
|
114,787,657 |
|
|
|
(111,690,934 |
) |
|
|
3,099,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of options and
warrants |
|
|
1,587,814 |
|
|
|
158 |
|
|
|
1,170,388 |
|
|
|
- |
|
|
|
1,170,546 |
|
Issuance of common stock |
|
|
2,001,237 |
|
|
|
200 |
|
|
|
4,599,799 |
|
|
|
- |
|
|
|
4,599,999 |
|
Warrants converted to
equity |
|
|
- |
|
|
|
- |
|
|
|
1,153,439 |
|
|
|
- |
|
|
|
1,153,439 |
|
Share-based compensation |
|
|
- |
|
|
|
- |
|
|
|
841,612 |
|
|
|
- |
|
|
|
841,612 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,808,978 |
) |
|
|
(3,808,978 |
) |
Balance, December 31,
2019 |
|
|
31,254,262 |
|
|
$ |
3,125 |
|
|
$ |
122,552,895 |
|
|
$ |
(115,499,912 |
) |
|
$ |
7,056,108 |
|
RESEARCH FRONTIERS INCORPORATED Unaudited
Consolidated Statements of Cash Flows Years ended December 31, 2019
and 2018
.
|
|
2019 |
|
|
2018 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,808,978 |
) |
|
$ |
(2,686,128 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
195,377 |
|
|
|
181,047 |
|
Warrant market adjustment |
|
|
652,025 |
|
|
|
278,044 |
|
Share-based compensation |
|
|
841,612 |
|
|
|
69,309 |
|
Loss on impairment of fixed asset |
|
|
50,666 |
|
|
|
- |
|
Bad debts |
|
|
156,636 |
|
|
|
43,350 |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
Royalties receivable |
|
|
(123,021 |
) |
|
|
(77,565 |
) |
Prepaid expenses and other current assets |
|
|
(6,104 |
) |
|
|
(23,032 |
) |
Accounts payable and accrued expenses |
|
|
1,904 |
|
|
|
94,169 |
|
Deferred revenue |
|
|
(42,836 |
) |
|
|
49,746 |
|
Net cash used in operating activities |
|
|
(2,082,719 |
) |
|
|
(2,071,060 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of fixed assets |
|
|
(65,282 |
) |
|
|
(11,663 |
) |
Net cash used in investing activities |
|
|
(65,282 |
) |
|
|
(11,663 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Net proceeds from issuances of common stock and warrants and
exercise of options and warrants |
|
|
5,770,545 |
|
|
|
3,314,292 |
|
Net cash provided by financing activities |
|
|
5,770,545 |
|
|
|
3,314,292 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
|
3,622,544 |
|
|
|
1,231,569 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of year |
|
|
2,969,416 |
|
|
|
1,737,847 |
|
Cash and cash equivalents at
end of year |
|
$ |
6,591,960 |
|
|
$ |
2,969,416 |
|
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