Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | RESEARCH FRONTIERS INC | |
Entity Central Index Key | 0000793524 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,411,107 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 5,837,395 | $ 6,591,960 |
Royalties receivable, net of reserves of $885,598 as of March 31, 2020 and $1,135,598 as of December 31,2019 | 746,653 | 656,062 |
Prepaid expenses and other current assets | 182,092 | 58,835 |
Total current assets | 6,766,140 | 7,306,857 |
Fixed assets, net | 94,083 | 141,720 |
Operating lease ROU assets | 733,691 | 773,989 |
Deposits and other assets | 33,567 | 33,567 |
Total assets | 7,627,481 | 8,256,133 |
Current liabilities: | ||
Current portion of operating lease liabilities | 163,198 | 163,236 |
Accounts payable | 67,934 | 169,750 |
Accrued expenses and other | 112,936 | 46,709 |
Deferred revenue | 78,923 | 7,734 |
Total current liabilities | 422,991 | 387,429 |
Operating lease liabilities, net of current portion | 772,976 | 812,596 |
Total liabilities | 1,195,967 | 1,200,025 |
Shareholders' equity: | ||
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 31,411,107 in 2020 and 31,254,262 in 2019 | 3,141 | 3,125 |
Additional paid-in capital | 122,552,879 | 122,552,895 |
Accumulated deficit | (116,124,506) | (115,499,912) |
Total shareholders' equity | 6,431,514 | 7,056,108 |
Total liabilities and shareholders' equity | $ 7,627,481 | $ 8,256,133 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Royalties receivables, reserves | $ 885,598 | $ 1,135,598 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,411,107 | 31,254,262 |
Common stock, shares outstanding | 31,411,107 | 31,254,262 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Fee income | $ 356,173 | $ 418,657 |
Operating expenses | 820,441 | 751,166 |
Research and development | 183,318 | 229,963 |
Total expenses | 1,003,759 | 981,129 |
Operating loss | (647,586) | (562,472) |
Warrant market adjustment | (247,590) | |
Net investment income | 22,992 | 6,165 |
Net loss | $ (624,594) | $ (803,897) |
Basic and diluted net loss per common share | $ (0.02) | $ (0.03) |
Weighted average number of common shares outstanding | 31,323,205 | 28,221,975 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance beginning at Dec. 31, 2018 | $ 2,767 | $ 114,787,657 | $ (111,690,934) | $ 3,099,490 |
Balance beginning, shares at Dec. 31, 2018 | 27,665,211 | |||
Exercise of options and warrants | $ 100 | 1,101,682 | 1,101,782 | |
Exercise of options and warrants, shares | 1,001,620 | |||
Net loss | (803,897) | (803,897) | ||
Balance ending at Mar. 31, 2019 | $ 2,867 | 115,889,339 | (112,494,831) | 3,397,375 |
Balance ending, shares at Mar. 31, 2019 | 28,666,831 | |||
Balance beginning at Dec. 31, 2019 | $ 3,125 | 122,552,895 | (115,499,912) | 7,056,108 |
Balance beginning, shares at Dec. 31, 2019 | 31,254,262 | |||
Exercise of options and warrants | $ 16 | (16) | ||
Exercise of options and warrants, shares | 156,845 | |||
Net loss | (624,594) | (624,594) | ||
Balance ending at Mar. 31, 2020 | $ 3,141 | $ 122,552,879 | $ (116,124,506) | $ 6,431,514 |
Balance ending, shares at Mar. 31, 2020 | 31,411,107 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (624,594) | $ (803,897) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 44,619 | 48,919 |
Warrant market adjustment | 247,590 | |
Bad debts expense (recovery) | (5,237) | |
Change in assets and liabilities: | ||
Royalty receivables | (85,354) | (74,685) |
Prepaid expenses and other current assets | (123,257) | (98,715) |
Accounts payable and accrued expenses | (35,589) | (52,414) |
Deferred revenue | 71,189 | 651 |
Net cash used in operating activities | (758,223) | (732,551) |
Cash flows from investing activities: | ||
Purchases of fixed assets | (55) | (134) |
Proceeds from sale of fixed assets | 3,713 | |
Net cash provided by (used in) investing activities | 3,658 | (134) |
Cash flows from financing activities: | ||
Net proceeds from issuances of common stock and warrants and exercise of options and warrants | 1,101,782 | |
Net cash provided by financing activities | 1,101,782 | |
Net (decrease) increase in cash and cash equivalents | (754,565) | 369,097 |
Cash and cash equivalents at beginning of period | 6,591,960 | 2,969,416 |
Cash and cash equivalents at end of period | $ 5,837,395 | $ 3,338,513 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation 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 months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The condensed consolidated financial statements as of December 31, 2019 are derived from audited financial statements. 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, 2019. |
Business
Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Note 2. Business 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. 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 limited capital resources 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 March 31, 2020, we had working capital of approximately $6.3 million, cash of approximately $5.8 million, shareholders’ equity of approximately $6.4 million and an accumulated deficit of approximately $116.1 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 $450,000-500,000 per quarter. Based on our current expectations of our cash flow shortfall for the next 12 months, our working capital would support our activities for the next 34 months. 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. 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. Recent Global Events: 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 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. The Company currently does not have the ability to assess whether the COVID-19 pandemic is likely to have a material impact on our near-term financial results. 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. |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncement | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Pronouncement | Note 3. Recently Adopted Accounting Pronouncement Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board’s Standard, Leases (Topic 842) ● An entity need not reassess whether any expired or existing contracts are or contain leases. ● An entity need not reassess the lease classification for any expired or existing leases. Instead, any leases previously classified as operating leases will continue to be classified as operating leases, while any leases previously classified as capital leases will be classified as finance leases. ● An entity need not reassess initial direct costs for any leases. The Company used the above practical expedients as the transition method in the application of the new lease standard at January 1, 2019. The Company applied a policy election to exclude short-term leases from balance sheet recognition and elected certain practical expedients at adoption. As permitted, the Company did not reassess whether existing contracts are or contain leases, the lease classification for any existing leases or the initial direct costs for any existing leases which were not previously accounted for as leases, are or contain a lease. At adoption on January 1, 2019, an operating lease liability of $1,134,000 and an operating lease right of use asset of $941,000 were recorded. The operating lease liability was $193,000 more than the operating lease right of use asset due to unamortized lease incentive from periods prior to the adoption of the new lease standard. There was no cumulative earnings effect adjustment. |
Patent Costs
Patent Costs | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patent Costs | Note 4. Patent Costs The Company expenses costs relating to the development, acquisition or enforcement of patents due to the uncertainty of the recoverability of these items. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 5. Revenue Recognition Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (Topic 606) ASC 606 follows a five-step approach to determining revenue recognition including: 1) Identification of the contract; 2) Identification of the performance obligations; 3) Determination of the transaction price; 4) Allocation of the transaction price and 5) Recognition of revenue. The Company determined that its license agreements provide for three performance obligations which include: (i) the Grant of Use to its Patent Portfolio (“Grant of Use”), (ii) Stand-Ready Technical Support (“Technical Support”) including the transfer of trade secrets and other know-how, production of materials, scale-up support, analytical testing, etc., and (iii) access to new Intellectual Property (“IP”) that may be developed sometime during the course of the contract period (“New Improvements”). Given the nature of IP development, such New Improvements are on an unspecified basis and can occur and be made available to licensees at any time during the contract period. When a contract includes more than one performance obligation, the Company needs to allocate the total consideration to each performance obligation based on its relative standalone selling price or estimate the standalone selling price if it is not observable. A standalone selling price is not available for our performance obligations since we do not sell any of the services separately and there is no competitor pricing that is available. As a consequence, the best method for determining standalone selling price of our Grant of Use performance obligation is through a comparison of the average royalty rate for comparable license agreements as compared to our license agreements. Comparable license agreements must consider several factors including: (i) the materials that are being licensed, (ii) the market application for the licensed materials, and (iii) the financial terms in the license agreements that can increase or decrease the risk/reward nature of the agreement. Based on the royalty rate comparison referred to above, any pricing above and beyond the average royalty rate would relate to the Technical Support and New Improvements performance obligations. The Company focuses a significant portion of its time and resources to provide the Technical Support and New Improvements services to its licensees which further supports the conclusions reached using the royalty rate analysis. The Technical Support and New Improvements performance obligations are co-terminus over the term of the license agreement. For purposes of determining the transaction price, and recognizing revenue, the Company combined the Technical Support and New Improvements performance obligations because they have the same pattern of transfer and the same term. We maintain a staff of scientists and other professionals whose primary job responsibilities throughout the year are: (i) being available to respond to Technical Support needs of our licensees, and (ii) developing improvements to our technology which are offered to our licensees as New Improvements. Since the costs incurred to satisfy the Technical Support and New Improvements performance obligations are incurred evenly throughout the year, the value of the Technical Support and New Improvements services are recognized throughout the initial contract period as these performance obligations are satisfied. If the agreement is not terminated at the end of the initial contract period, it will renew on the same terms as the initial contract for a one-year period. Consequently, any fees or minimum annual royalty obligations relating to this renewal contract will be allocated similarly to the initial contract over the additional one-year period. We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the Grant of Use is recognized in the first period of the contract term in which the license agreement is in force. The value of the Technical Support and New Improvements obligations is allocated throughout the contract period based on the satisfaction of its performance obligations. If the agreement is not terminated at the end of the contract period, it will renew on the same terms as the original agreement for a one-year period. Consequently, any fees or minimum annual royalties (“MAR”) relating to this renewal contract will be allocated similarly over that additional year. The Company’s license agreements have a variable royalty fee structure (meaning that royalties are a fixed percentage of sales that vary from period to period) and frequently include a MAR commitment. In instances when sales of licensed products by its licensees exceed the MAR, the Company recognizes fee income as the amounts have been earned. Typically, the royalty rate for such sales is 10%-15% of the selling price. While this is variable consideration, it is subject to the sales/usage royalty exception to recognition of variable consideration in ASC 606 10-55-65 and therefore is not recognized until the subsequent sales or usage occurs or the MAR period commences. Because of the immediate recognition of the Grant of Use performance obligation: (i) the first period of the contract term will generally have a higher percent allocation of the transaction price under ASC 606 than under the accounting guidance used prior to the adoption of ASC 606, and (ii) the remaining periods in the year will have less of the transaction price recognized under ASC 606 than under the accounting guidance used prior to the adoption of ASC 606. After the initial period in the contract term, the revenue for the remaining periods will be based on the satisfaction of the technical support and New Improvements obligations. The Company does not have any contract assets under ASC 606 as of March 31, 2020. Certain of the contract fees are accrued by, or paid to, the Company in advance of the period in which they are earned resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are recognized into income in future periods as earned. 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. Our revenue source comes from the licensing of this technology and all of these license agreements have similar terms and provisions. The majority of the Company’s licensing fee income comes from the activities of several licensees participating in the automotive market. The Company currently believes that the automotive market will be the largest source of its royalty income over the next several years. The Company’s royalty income from this market may be influenced by numerous factors including various trends affecting demand in the automotive industry and the rate of introduction of new technology in OEM product lines. In addition to these macro factors, the Company’s royalty income from the automotive market could also be influenced by specific factors such as whether the Company’s SPD-SmartGlass technology appears as standard equipment or as an option on a particular vehicle, the number of additional vehicle models that SPD-SmartGlass appears on, the size of each window on a vehicle and the number of windows on a vehicle that use SPD-SmartGlass, fluctuations in the total number of vehicles produced by a manufacturer, and in the percentage of cars within each model produced with SPD-SmartGlass, and changes in pricing or exchange rates. As of March 31, 2020, the Company has four license agreements that are in their initial multiyear term (“Initial Term”) with continuing performance obligations going forward. The Initial Term of one of these agreements will end as of December 31, 2020, one will end as of December 31, 2021, one will end as of December 31, 2022, and one will end as of December 31, 2024. The Company currently expects that all four of these agreements will renew annually at the end of the Initial Term. As of March 31, 2020, the aggregate amount of the revenue to be recognized upon the satisfaction of the remaining performance obligations for the four license agreements is $197,671. The revenue for these remaining performance obligations for each of the four license agreements is expected to be recognized evenly throughout their remaining period of the Initial Term. |
Fee Income
Fee Income | 3 Months Ended |
Mar. 31, 2020 | |
Fee Income | |
Fee Income | Note 6. Fee Income Fee income represents amounts earned by the Company under various license and other agreements relating to technology developed by the Company. During the first three months of 2020, five licensees accounted for 10% or more of fee income of the Company; these licensees accounted for approximately 28%, 16%, 13%, 12% and 10% of fee income recognized during such period. During the first three months of 2019, five licensees accounted for 10% or more of fee income of the Company; these licensees accounted for approximately 31%, 14%, 13%, 11% and 10%, respectively, of fee income recognized during this period. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Stock-Based Compensation | Note 7. Stock-Based Compensation The Company has granted options/warrants to consultants. GAAP requires that all stock-based compensation be recognized as an expense in the financial statements and that such costs be measured at the fair value of the award at the date of grant. These awards generally vest ratably over 12 to 60 months from the date of grant and the Company charges to operations quarterly the current market value of the options using the Black-Scholes method. During the three months ended March 31, 2020 and 2019 there were no options granted to consultants or related charges. There were no grants of restricted stock or compensation expense recorded relating to restricted stock grants to employees and directors during the three months ended March 31, 2020 and 2019. As of March 31, 2020, there were 882,500 shares available for future grant under our 2019 Equity Incentive Plan, which was approved by the Company’s shareholders in June 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes Since inception, the Company has incurred losses from operations and as a result has not recorded income tax expense. Benefits related to net operating loss carryforwards and other deferred tax items have been fully reserved since it was not more likely than not that the Company would achieve profitable operations and be able to utilize the benefit of the net operating loss carryforwards. |
Basic and Diluted Loss Per Comm
Basic and Diluted Loss Per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Common Share | Note 9. Basic and Diluted Loss Per Common Share Basic loss per share excludes any dilution. It is based upon the weighted average number of common shares outstanding during the period. Dilutive loss per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company’s dilutive loss per share equals basic loss per share for the periods ended March 31, 2020 and 2019 respectively because all common stock equivalents (i.e., |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 10. Equity During the three months ended March 31, 2020, the Company issued 156,845 shares of its capital stock in connection with the cashless exercise of 243,091 outstanding options. During the three months ended March 31, 2019, the Company received $1,101,782 in proceeds from the exercise of outstanding warrants and issued 1,001,620 shares of its capital stock in connection with these exercises. The Company did not sell any equity securities during the three months ended March 31, 2020 and 2019. As of March 31, 2020, there were 1,483,143 warrants outstanding. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 11. Subsequent Event On April 17, 2020, the Company borrowed $202,052 under the Small Business Administration Paycheck Protection Program (“PPP Loan”). The PPP Loan requires no collateral, has a 1% fixed annual interest rate, has a term of two years, and has no prepayment penalties or fees. All or some of the PPP Loan may be forgiven for the amounts spent by the Company, subject to certain conditions and limitations, on authorized expenses such as payroll, rent and utilities over the eight weeks after receiving the loan. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 12. Leases The Company determines if an arrangement is a lease at its inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if the Company obtains the rights to direct the use of, and to obtain substantially all of the economic benefits from the use of, the underlying asset. Lease expense for variable leases and short-term leases is recognized when the obligation is incurred. The Company has operating leases for certain facilities, vehicles and equipment with a weighted average remaining lease term of 4.9 years as of March 31, 2020. Operating leases are included in right of use lease assets, other current liabilities and long-term lease liabilities on the condensed consolidated balance sheet. Right of use lease assets and liabilities are recognized at each lease’s commencement date based on the present value of its lease payments over its respective lease term. The Company does not have an established incremental borrowing rate as it does not have any debt. The Company uses the stated borrowing rate for a lease when readily determinable. When the interest rates implicit in its lease agreements are not readily determinable, the Company used an interest rate based on the marketplace for public debt. The weighted average discount rate associated with operating leases as of March 31, 2020 is 5.5%. Operating lease expense for the three months ended March 31, 2020 was approximately $53,000. The Company has no material variable lease costs or sublease income for the three months ended March 31, 2020. Subsequent to the Company’s adoption of the new lease accounting guidance on January 1, 2019, the Company recorded new right of use lease assets of approximately $900 thousand and associated lease liabilities of approximately $1.1 million. Maturities of operating lease liabilities as of March 31, 2020 were as follows: March 31, 2020 For the remainder of 2020 $ 160,156 For the year ended December 31, 2021 207,229 For the year ended December 31, 2022 213,320 For the year ended December 31, 2023 217,151 For the year ended December 31, 2024 221,869 For the year ended December 31, 2025 and beyond 55,874 Total lease payments 1,075,599 Less: imputed lease interest (139,426 ) Present value of lease liabilities $ 936,173 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Liabilities | Maturities of operating lease liabilities as of March 31, 2020 were as follows: March 31, 2020 For the remainder of 2020 $ 160,156 For the year ended December 31, 2021 207,229 For the year ended December 31, 2022 213,320 For the year ended December 31, 2023 217,151 For the year ended December 31, 2024 221,869 For the year ended December 31, 2025 and beyond 55,874 Total lease payments 1,075,599 Less: imputed lease interest (139,426 ) Present value of lease liabilities $ 936,173 |
Business (Details Narrative)
Business (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Working capital | $ 6,300,000 | |||
Cash and cash equivalents | 5,837,395 | $ 6,591,960 | ||
Shareholders' equity | 6,431,514 | 7,056,108 | $ 3,397,375 | $ 3,099,490 |
Accumulated deficit | (116,124,506) | $ (115,499,912) | ||
Minimum [Member] | ||||
Non-recurring cash expenses per quarter | 450,000 | |||
Maximum [Member] | ||||
Non-recurring cash expenses per quarter | $ 500,000 |
Recently Adopted Accounting P_2
Recently Adopted Accounting Pronouncement (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 |
Operating lease liability | $ 936,173 | ||
Operating lease ROU assets | $ 733,691 | $ 773,989 | |
Accounting Standards Update 2016-02 [Member] | |||
Operating lease liability | $ 1,134,000 | ||
Operating lease ROU assets | 941,000 | ||
Operating lease liability, unamortized lease incentive prior to adoption | $ 193,000 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
License Agreement [Member] | Sales Revenue [Member] | Minimum [Member] | |
Royalty rate on selling price | 10.00% |
License Agreement [Member] | Sales Revenue [Member] | Maximum [Member] | |
Royalty rate on selling price | 15.00% |
Four License Agreement [Member] | |
Remaining performance obligations | $ 197,671 |
Fee Income (Details Narrative)
Fee Income (Details Narrative) - Sales Revenue [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Licensee One [Member] | ||
Percentage of fee income | 28.00% | 31.00% |
Licensee Two [Member] | ||
Percentage of fee income | 16.00% | 14.00% |
Licensee Three [Member] | ||
Percentage of fee income | 13.00% | 13.00% |
Licensee Four [Member] | ||
Percentage of fee income | 12.00% | 11.00% |
Licensee Five [Member] | ||
Percentage of fee income | 10.00% | 10.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
2019 Equity Incentive Plan [Member] | ||
Shares available for future grant | 882,500 | |
Options [Member] | Consultant [Member] | ||
Number of options granted | ||
Restricted Stock [Member] | Employees and Directors [Member] | ||
Compensation expense recorded | ||
Minimum [Member] | ||
Award vesting period | 12 months | |
Maximum [Member] | ||
Award vesting period | 60 months |
Basic and Diluted Loss Per Co_2
Basic and Diluted Loss Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Options [Member] | ||
Anti-dilutive securities effect | 2,788,403 | 2,788,403 |
Warrants [Member] | ||
Anti-dilutive securities effect | 2,752,766 | 2,752,766 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of common stock sold | ||
Warrants [Member] | ||
Proceeds from exercise of warrants | $ 1,101,782 | |
Stock issued during period, warrants exercised | 1,001,620 | |
Warrants outstanding | 1,483,143 | |
Options [Member] | ||
Capital stock issued | 156,845 | |
Stock issued during period, options exercised | 243,091 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] - PPP Loan [Member] | Apr. 17, 2020USD ($) |
Borrowing amount | $ 202,052 |
Debt interest rate | 1.00% |
Debt term | 2 years |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | |
Weighted average remaining lease term | 4 years 10 months 25 days | ||
Weighted-average discount rate | 5.50% | ||
Operating lease expense | $ 53,000 | ||
Variable lease, cost | |||
Sublease income | |||
Right of use lease assets | $ 733,691 | $ 773,989 | |
Lease liabilities | $ 936,173 | ||
Accounting Standards Update 2016-02 [Member] | |||
Right of use lease assets | $ 941,000 | ||
Lease liabilities | $ 1,134,000 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liabilities (Details) | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
For the remainder of 2020 | $ 160,156 |
For the year ended December 31, 2021 | 207,229 |
For the year ended December 31, 2022 | 213,320 |
For the year ended December 31, 2023 | 217,151 |
For the year ended December 31, 2024 | 221,869 |
For the year ended December 31, 2025 and beyond | 55,874 |
Total lease payments | 1,075,599 |
Less: imputed lease interest | (139,426) |
Present value of lease liabilities | $ 936,173 |