Research Frontiers reports Second Quarter 2020 financial results

Research Frontiers Inc. announced its financial results for its second quarter ended June 30, 2020.

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 the 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 USD as compared to 719,692 USD  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 USD, or 20 percent, 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 USD 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 USD 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 USD and working capital of 6,270,142 USD.
    • Based upon the Company’s projected cash flow shortfall of approximately 450,000-500,000 USD per quarter, the Company expects to have sufficient working capital for at least the next 34 months of operations.