2022 Q4 Form 10-Q Financial Statement

#000149315222030341 Filed on November 03, 2022

View on sec.gov

Income Statement

Concept 2022 Q4 2022 Q3 2021 Q3
Revenue $129.9K $150.4K $723.5K
YoY Change -38.87% -79.21% 325.57%
Cost Of Revenue $785.3K $487.5K $571.0K
YoY Change -4.48% -14.63% 21.49%
Gross Profit -$655.4K -$337.0K $152.5K
YoY Change 7.5% -321.08% -149.18%
Gross Profit Margin -504.53% -224.03% 21.07%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development $164.7K $149.2K $135.2K
YoY Change 3.07% 10.31% -3.41%
% of Gross Profit 88.7%
Depreciation & Amortization $7.230K $7.200K -$6.100K
YoY Change 456.15% -218.03% -79.67%
% of Gross Profit -4.0%
Operating Expenses $164.7K $636.6K $135.2K
YoY Change 3.07% 370.81% -3.41%
Operating Profit -$820.1K -$486.2K $17.23K
YoY Change 6.58% -2921.76% -103.83%
Interest Expense $4.650K $2.460K $4.390K
YoY Change -135.02% -43.96%
% of Operating Profit 25.48%
Other Income/Expense, Net
YoY Change
Pretax Income -$815.4K -$483.7K $21.61K
YoY Change 4.18% -2338.45% -105.03%
Income Tax
% Of Pretax Income
Net Earnings -$815.4K -$483.7K $21.61K
YoY Change 4.18% -2338.45% -105.03%
Net Earnings / Revenue -627.74% -321.54% 2.99%
Basic Earnings Per Share -$0.02 $0.00
Diluted Earnings Per Share -$0.02 -$15.20K $682.80
COMMON SHARES
Basic Shares Outstanding 33.15M shares 31.65M shares 31.65M shares
Diluted Shares Outstanding 31.83M shares

Balance Sheet

Concept 2022 Q4 2022 Q3 2021 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $4.231M $4.800M $2.985M
YoY Change 39.86% 60.83% -45.14%
Cash & Equivalents $4.200M $4.800M $2.985M
Short-Term Investments $0.00 $0.00
Other Short-Term Assets $101.0K $166.6K $158.7K
YoY Change 8.65% 4.96% 44.27%
Inventory
Prepaid Expenses
Receivables $589.6K $534.5K $1.353M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $4.921M $5.499M $4.496M
YoY Change 24.61% 22.31% -26.29%
LONG-TERM ASSETS
Property, Plant & Equipment $65.39K $72.56K $606.8K
YoY Change -29.66% -88.04% -16.88%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $56.07K $33.57K $33.57K
YoY Change 67.03% -0.01% 11.9%
Total Long-Term Assets $445.0K $466.3K $640.4K
YoY Change -25.38% -27.18% -15.74%
TOTAL ASSETS
Total Short-Term Assets $4.921M $5.499M $4.496M
Total Long-Term Assets $445.0K $466.3K $640.4K
Total Assets $5.366M $5.966M $5.137M
YoY Change 18.05% 16.14% -25.12%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $71.08K $38.01K $33.57K
YoY Change 6.95% 13.23% -32.86%
Accrued Expenses $34.38K $32.95K $229.2K
YoY Change -30.39% -85.62% 4.16%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $301.9K $267.7K $276.0K
YoY Change 1.32% -3.01% -4.82%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $267.7K $317.8K $511.0K
YoY Change -42.32% -37.81% -25.94%
Total Long-Term Liabilities $267.7K $317.8K $511.0K
YoY Change -42.32% -37.81% -25.94%
TOTAL LIABILITIES
Total Short-Term Liabilities $301.9K $267.7K $276.0K
Total Long-Term Liabilities $267.7K $317.8K $511.0K
Total Liabilities $569.6K $585.5K $787.0K
YoY Change -25.26% -25.6% -19.69%
SHAREHOLDERS EQUITY
Retained Earnings -$122.4M -$121.5M
YoY Change 2.27%
Common Stock $127.2M $126.9M
YoY Change 2.98%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $4.800M $5.400M $4.350M
YoY Change
Total Liabilities & Shareholders Equity $5.366M $5.966M $5.137M
YoY Change 18.05% 16.14% -25.12%

Cashflow Statement

Concept 2022 Q4 2022 Q3 2021 Q3
OPERATING ACTIVITIES
Net Income -$815.4K -$483.7K $21.61K
YoY Change 4.18% -2338.45% -105.03%
Depreciation, Depletion And Amortization $7.230K $7.200K -$6.100K
YoY Change 456.15% -218.03% -79.67%
Cash From Operating Activities -$567.2K -$535.8K -$488.6K
YoY Change -920.81% 9.66% 22.15%
INVESTING ACTIVITIES
Capital Expenditures $50.00 -$150.00 -$30.00
YoY Change -145.45% 400.0%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 $3.134M
YoY Change -100.0% -100.0%
Cash From Investing Activities -$50.00 -$150.00 $3.134M
YoY Change -100.0% -100.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 0.000 3.450M 0.000
YoY Change
NET CHANGE
Cash From Operating Activities -567.2K -535.8K -488.6K
Cash From Investing Activities -50.00 -150.0 3.134M
Cash From Financing Activities 0.000 3.450M 0.000
Net Change In Cash -567.2K 2.914M 2.645M
YoY Change -79.1% 10.17% -761.25%
FREE CASH FLOW
Cash From Operating Activities -$567.2K -$535.8K -$488.6K
Capital Expenditures $50.00 -$150.00 -$30.00
Free Cash Flow -$567.2K -$535.6K -$488.6K
YoY Change -919.58% 9.63% 22.14%

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us-gaap Basis Of Accounting
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<p id="xdx_80E_eus-gaap--BasisOfAccounting_zEt0F2f69Ge7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Note 1. <span id="xdx_825_zR2BMVkckQw">Basis of Presentation</span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K relating to Research Frontiers Incorporated for the fiscal year ended December 31, 2021.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Certain amounts in the accompanying September 30, 2021 condensed consolidated statements of cash flows have been reclassified to conform to the September 30, 2022 presentation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p>
us-gaap Nature Of Operations
NatureOfOperations
<p id="xdx_801_eus-gaap--NatureOfOperations_zUZ1IuAEdFJ" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Note 2. <span id="xdx_824_zIKpRxnNHaHg">Business</span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research Frontiers Incorporated (“Research Frontiers” or the “Company”) operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light. Such devices, often referred to as “light valves” or suspended particle devices (“SPDs”), use colloidal particles that are either incorporated within a liquid suspension or a film, which is usually enclosed between two sheets of glass or plastic having transparent, electrically conductive coatings on the facing surfaces thereof. At least one of the two sheets is transparent. SPD technology, made possible by a flexible light-control film invented by Research Frontiers, allows the user to instantly and precisely control the shading of glass/plastic manually or automatically. SPD technology has numerous product applications, including SPD-Smart™ windows, sunshades, skylights and interior partitions for homes and buildings; automotive windows, sunroofs, sun visors, sunshades, rear-view mirrors, instrument panels and navigation systems; aircraft windows; museum display panels; eyewear products; and flat panel displays for electronic products. SPD-Smart light control film is now being developed for, or used in, architectural, automotive, marine, aerospace and appliance applications.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has primarily utilized its cash, cash equivalents, and investments generated from sales of our common stock, proceeds from the exercise of options and warrants, and royalty fees collected to fund its research and development of SPD light valves, for marketing initiatives, and for other working capital purposes. The Company’s working capital and capital requirements depend upon numerous factors, including the results of research and development activities, competitive and technological developments, the timing and cost of patent filings, and the development of new licensees and changes in the Company’s relationships with its existing licensees. The degree of dependence of the Company’s working capital requirements on each of the foregoing factors cannot be quantified; increased research and development activities and related costs would increase such requirements; the addition of new licensees may provide additional working capital or working capital requirements; and changes in relationships with existing licensees would have a favorable or negative impact depending upon the nature of such changes. We have incurred recurring losses since inception and expect to continue to incur losses as a result of costs and expenses related to our research and continued development of our SPD technology and our corporate general and administrative expenses. Our capital requirements and operations to date have been substantially funded through sales of our common stock, exercise of options and warrants and royalty fees collected. As of September 30, 2022, we had working capital of approximately $<span id="xdx_904_ecustom--WorkingCapital_iI_pn5n6_c20220930_zdjHSNjQr9w8" title="Working capital">5.2</span> million, cash and cash equivalents of approximately $<span id="xdx_90E_eus-gaap--CashAndCashEquivalentsAtCarryingValue_iI_pn5n6_c20220930_zM3sSW8guNpf" title="Cash and cash equivalents">4.8</span> million, shareholders’ equity of approximately $<span id="xdx_90F_eus-gaap--StockholdersEquity_iI_pn5n6_c20220930_zhHJCFNsJXyg" title="Shareholders' equity">5.4</span> million and an accumulated deficit of approximately $<span id="xdx_901_eus-gaap--RetainedEarningsAccumulatedDeficit_iNI_pn5n6_di_c20220930_zB92sCrKyFac" title="Accumulated deficit">121.5</span> million. Our projected cash flow shortfall based on our current operations adjusted for any non-recurring cash expenses for the next 12 months is approximately $<span id="xdx_90B_ecustom--NonrecurringCashExpenses_c20220101__20220930__srt--RangeAxis__srt--MinimumMember_z9paqFhPGLj8" title="Non-recurring cash expenses">250,000</span> to $<span id="xdx_901_ecustom--NonrecurringCashExpenses_c20220101__20220930__srt--RangeAxis__srt--MaximumMember_zdh3z1tYgkS8" title="Non-recurring cash expenses">300,000</span> per quarter. Based on our current expectations of our cash flow shortfall for the next 12 months, our working capital would support our activities in excess of the next five years.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In the event that we are unable to generate sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term prospects. The Company may seek to obtain additional funding through future equity issuances. There can be no assurance as to the availability or terms upon which such financing and capital might be available. The eventual success of the Company and generation of positive cash flow will be dependent upon the commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof. To date, the Company has not generated sufficient revenue from its licensees to fund its operations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recent Global Events:</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. As a result, the Company expects operations at its facility to continue to be affected in some capacity, as the COVID-19 virus continues to proliferate and the federal, state and local governments under which we operate continue to adopt new rules. The Company has put in place enhanced procedures, such as restricting international and domestic travel, adopting a variety of steps designed to ensure social distancing in our facilities, including working remotely where available, and increasing our cleaning and sanitizing procedures in our facilities, in an effort to protect its employees and communities.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues were negatively impacted since the onset of the pandemic due to delays in manufacture of products using our technology. Most of the products using our technology are manufactured by licensees overseas in Europe and Asia who have been similarly affected by the pandemic. The disruption caused by public health crises, such as COVID-19, could result in lower levels of sale activity for products using our technology resulting in lower level of royalties owed to us from the sale of these products. The duration of the potential business disruptions and related financial impact cannot be reasonably estimated at this time, but could materially adversely affect our business, financial condition, results of operations, and cash flows. The Company increased its allowance for uncollectible royalty receivables until the collectability from certain licensees can be better ascertained in the regions affected by COVID-19.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p>
CY2022Q3 REFR Working Capital
WorkingCapital
5200000 usd
CY2022Q3 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
4800000 usd
CY2022Q3 us-gaap Stockholders Equity
StockholdersEquity
5400000 usd
CY2022Q3 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-121500000 usd
REFR Proceeds From Exercise Of Options And Warrants
ProceedsFromExerciseOfOptionsAndWarrants
86262 usd
REFR Options And Warrant Issued In Connection With Exercises
OptionsAndWarrantIssuedInConnectionWithExercises
39500 shares
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Shares Issued In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedInPeriod
35110 shares
REFR Issuance Of Common Stock Options And Warrants
IssuanceOfCommonStockOptionsAndWarrants
101000 shares
CY2022Q3 us-gaap Stock Issued During Period Shares New Issues
StockIssuedDuringPeriodSharesNewIssues
2000000.0 shares
CY2022Q3 us-gaap Common Stock Convertible Conversion Price Increase
CommonStockConvertibleConversionPriceIncrease
2.30
CY2022Q3 REFR Proceeds From Exercise Of Options And Warrants
ProceedsFromExerciseOfOptionsAndWarrants
4600000 usd
CY2022Q3 REFR Proceeds From Exercise Of Options And Warrants
ProceedsFromExerciseOfOptionsAndWarrants
3450000 usd
CY2022Q3 us-gaap Stock Issued During Period Shares New Issues
StockIssuedDuringPeriodSharesNewIssues
1500000 shares
CY2022Q3 REFR Options And Warrant Issued In Connection With Exercises
OptionsAndWarrantIssuedInConnectionWithExercises
1500000 shares
CY2022Q3 REFR Subscription Agreements
SubscriptionAgreements
1150000 usd
CY2022Q3 us-gaap Class Of Warrant Or Right Outstanding
ClassOfWarrantOrRightOutstanding
2899991 shares
CY2022Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
1068960 shares
CY2022Q3 us-gaap Operating Lease Weighted Average Remaining Lease Term1
OperatingLeaseWeightedAverageRemainingLeaseTerm1
P2Y6M
CY2022Q3 us-gaap Operating Lease Weighted Average Discount Rate Percent
OperatingLeaseWeightedAverageDiscountRatePercent
0.055 pure
CY2022Q3 us-gaap Operating Lease Expense
OperatingLeaseExpense
54000 usd
us-gaap Operating Lease Expense
OperatingLeaseExpense
160000 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Remainder Of Fiscal Year
LesseeOperatingLeaseLiabilityPaymentsRemainderOfFiscalYear
54000 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths
217000 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due Year Two
LesseeOperatingLeaseLiabilityPaymentsDueYearTwo
222000 usd
CY2022Q3 us-gaap Lessee Operating Lease Liability Payments Due After Year Five
LesseeOperatingLeaseLiabilityPaymentsDueAfterYearFive
56000 usd

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