Source : Research Frontiers Incorporated
Research Frontiers Reports Fourth Quarter and Full Year 2019 Financial Results
Management to Host Conference Call at 4:30 p.m.
WOODBURY, N.Y., March 12, 2020 (GLOBE NEWSWIRE) -- 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.
- 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.
- At December 31, 2019 the Company had cash and cash equivalents of $6,591,960 and working capital of $6,919,428
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 Voorhees
Chief Financial Officer
Research Frontiers Inc.
+1-516-364-1902
Info@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 | ||||