SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2003 Commission File No. 1-9399
RESEARCH FRONTIERS INCORPORATED
(Exact name of registrant as specified in charter)
Delaware 11-2103466
(State of incorporation or organization) (IRS Employer
Identification No.)
240 Crossways Park Drive, Woodbury, N.Y. 11797
(Address of principal executive offices) (Zip Code)
(516) 364-1902
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No __
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: As of May
13, 2003, there were outstanding 12,305,829 shares of Common Stock,
par value $0.0001 per share.
RESEARCH FRONTIERS INCORPORATED
Consolidated Balance Sheets
March 31,2003
Assets (Unaudited) Dec.31,2002
Current assets:
Cash and cash equivalents $ 4,322,730 5,117,571
Marketable investment securities-available for sale 5,625 11,250
Royalty receivable 340,780 138,147
Prepaid expenses and other current assets 21,126 26,661
Total current assets 4,690,261 5,293,629
Investment in SPD Inc., net 494,802 750,002
Fixed assets, net 180,297 200,815
Deposits and other assets 22,605 22,605
Total assets $ 5,387,965 6,267,051
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 167,758 88,609
Deferred revenue 174,000 12,000
Accrued expenses and other 175,598 191,976
Total liabilities 517,356 292,585
Shareholders' equity:
Capital stock, par value $0.0001 per share;
authorized 100,000,000 shares, issued and
outstanding 12,247,879 shares and 12,215,879 shares 1,225 1,222
Additional paid-in capital 52,339,503 52,124,811
Accumulated other comprehensive loss (6,875) (1,250)
Accumulated deficit (47,463,244)(46,150,317)
Total shareholders' equity 4,870,609 5,974,466
Total liabilities and shareholders' equity $ 5,387,965 6,267,051
See accompanying notes to consolidated financial statements.
RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Operations
(Unaudited)
Three months ended
March 31,2003 March 31,2002
Fee income $ 86,128 53,125
Operating expenses 581,454 625,714
Research and development 572,238 457,100
Charge for reduction in value of investment in SPD Inc. 255,200 --
1,408,892 1,082,814
Operating loss (1,322,764) (1,029,689)
Net investment income 9,837 108,822
Net loss $ (1,312,927) (920,867)
Basic and diluted net loss per common share $ (.11) (.08)
Weighted average number of common shares outstanding 12,235,518 12,128,159
See accompanying notes to consolidated financial statements.
RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31,2003 March 31, 2002
Cash flows from operating activities:
Net loss $ (1,312,927) (920,867)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 26,891 27,584
Charge for reduction in value of investment in SPD Inc. 255,200 --
Changes in assets and liabilities:
Royalty receivable (202,633) (75,000)
Prepaid expenses and other current assets 5,535 21,651
Deferred revenue 162,000 46,875
Accounts payable and accrued expenses 62,771 39,692
Net cash used in operating activities (1,003,163) (860,065)
Cash flows from investing activities:
Purchase of fixed assets (6,373) (4,951)
Net cash used in investing activities (6,373) (4,951)
Cash flows from financing activities:
Proceeds from issuances of common stock 214,695 1,291,249
Purchase of treasury stock -- (268,521)
Net cash provided by financing activities 214,695 1,022,728
Net (decrease) increase in cash and cash equivalents (794,841) 157,712
Cash and cash equivalents at beginning of year 5,117,571 853,210
Cash and cash equivalents at end of period $4,322,730 1,010,922
See accompanying notes to consolidated financial statements.
RESEARCH FRONTIERS INCORPORATED
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)
Basis of Presentation
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position, results of
operations, and cash flows for the interim periods to which the report
relates. The results of operations for the three-month period ended
March 31, 2003 are not necessarily indicative of the results to be
expected for the full year. The notes included herein should be read
in conjunction with the notes to the consolidated financial statements
of the Company as of December 31, 2002 and for the three years then
ended, included in the Company's Annual Report on Form 10-K.
Business
Research Frontiers Incorporated (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.
Investment in SPD Inc.
During the second quarter of 2001, the Company, through its wholly-
owned subsidiary, SPD Enterprises, Inc., invested approximately
$750,000 for a minority equity interest in SPD Inc., a subsidiary of
Hankuk Glass Industries Inc., Korea's largest glass manufacturer,
which is dedicated exclusively to the production of suspended particle
device (SPD) light-control film and a wide variety of end-products
using SPD film. In April 2003, the Company's wholly-owned
subsidiary, SPD Enterprises, Inc., invested $74,902 in SPD Inc.,
raising its equity ownership from 6.67% to 6.91%. SPD Inc.'s parent
company invested at the same time and on the same price, $748,931,
raising its equity ownership in SPD Inc. from 66.67% to 69.09%.
Because of these recent financing activities by SPD Inc. in which
Hankuk and SPD Enterprises paid a lower price than originally paid by
SPD Enterprises in connection with its initial investment in SPD Inc.,
the value of SPD Enterprises' investment in SPD Inc. was reduced by
$255,200 as of March 31, 2003. The Company's license agreement
with Hankuk Glass Industries provides for the payment of minimum
annual royalties to the Company in 2002 and 2003.
Patent Costs
The Company expenses costs relating to the development or
acquisition of patents due to the uncertainty of the recoverability of
these items.
Adoption of New Accounting Pronouncements
The Company adopted on January 1, 2003 Financial Accounting
Standards Board Statement No. 146, Accounting for Costs Associated
with Exit or Disposal Activities ("SFAS No. 146"). SFAS No. 146
spreads out the reporting of expenses relating to restructurings initiated
after 2002, because commitment to a plan to exit an activity or dispose
of long-lived assets will no longer be enough to record a liability for
the anticipated costs. Instead, companies will record exit and disposal
costs when they are "incurred" and can be measured at fair value, and
they will subsequently adjust the recorded liability for changes in
estimated cash flows. The adoption of SFAS No. 146 had no impact
on the Company's consolidated financial statements as no
restructurings are planned.
Revenue Recognition
The Company has entered into a number of license agreements
covering potential products. The Company receives minimum annual
royalties under certain license agreements and records fee income for
the amounts earned by the Company. In instances when sales of
licensed products by its licensees exceed minimum annual royalties,
the Company recognizes fee income as the amounts have been earned.
Certain of the fees are accrued by, or paid to, the Company in advance
of the period in which they are earned resulting in deferred revenue.
Reclassifications
During the second quarter of 2002, the Company has reclassified costs
associated with patents and patent applications from research and
development expenses to operating expenses. The amount of patent
costs for the three months ended March 31, 2002 was approximately
$26,000 which has been reclassified on the Company's consolidated
statement of operations to conform to the current period's presentation.
Stock-Based Compensation
As permitted by SFAS No. 123, Accounting for Stock-Based
Compensation, the Company accounts for common stock options
granted to employees and directors using the intrinsic value method,
and thus, recognizes no compensation expense for such stock-based
awards where the exercise prices are equal to or greater than the fair
value of the Company's common stock on the date of grant. Pro forma
information regarding net income or loss is required by SFAS No. 123.
The following table illustrates the effect on net loss and earnings per
share as if the fair value method had been applied:
Three months ended
Mar. 31,2003 Mar. 31,2002
Net loss $ (1,312,927) (920,867)
Deduct: Total stock-based employee
compensation determined under fair-
value based method for all awards $(56,275) (56,275)
Pro forma $ (1,369,202) (977,142)
Basic and diluted net loss
per common share As reported $ (0.11) $ (0.08)
Pro forma $ (0.11) $ (0.08)
Shareholders' Equity
Issuance of Common Stock
For the three months ended March 31, 2003, the Company received
$214,695 of net cash proceeds from (i) the issuance of 25,000
shares of common stock of the Company (along with a ten-year
warrant to purchase 25,000 shares of common stock of the
Company at an exercise price of $9.00 per share) in a private
placement to a director of the Company resulting in net proceeds of
$165,000; and (ii) 7,000 shares of common stock issued upon the
exercise of warrants resulting in net proceeds of $49,695.
For the three months ended March 31, 2002, the Company received
$1,291,249 of net cash proceeds from (i) the issuance of 7,000
shares of common stock issued upon the exercise of options
resulting in net proceeds of $68,015; (ii) 68,000 shares of common
stock issued upon the exercise of warrants resulting in net proceeds
of $1,058,923; and (iii) $164,311 of cash received in early January
for the settlement of a warrant exercised in late December 2001.
Treasury Stock
The Company did not repurchase any of its stock during the three
months ended March 31, 2003.
For the three months ended March 31, 2002, the Company
purchased in the open market and subsequently retired 15,800
shares of treasury stock with an aggregate cost of $268,521.
Comprehensive Income
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. (SFAS No. 130) requires that companies
disclose comprehensive income, which includes net income, foreign
currency translation adjustments, minimum pension liability
adjustments, and unrealized gains and losses on marketable
securities classified as available-for-sale. The components of
comprehensive loss for the three months ended March 31, 2003 and
2002 are as follows:
Three months ended
Mar. 31,2003 Mar. 31,2002
Net loss $ (1,312,927) (920,867)
Unrealized loss on securities:
Unrealized holding loss
arising during period $ (5,625) (56,871)
Total comprehensive loss $ (1,318,552) (977,738)
Performance Bonus Plan
In November 2002, the Company's Board of Directors approved a
performance bonus plan to replace earlier bonus plans with a general
bonus plan under which bonuses are awarded to employees of the
Company for outstanding achievement including technical
accomplishments, sales and revenue growth, and other performance
milestones. All employees of the Company are eligible to receive
bonuses under this plan and the bonuses shall not exceed $300,000 in
the aggregate for 2003. During the first quarter of 2003, bonuses were
awarded under this plan to certain non-management employees of the
Company totaling $52,500, and no bonuses were awarded under this
plan to any members of management.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Accounting Policies
The following accounting policies are important to understanding
our financial condition and results of operations and should be read as
an integral part of the discussion and analysis of the results of our
operations and financial position. For additional accounting policies,
see note 2 to our consolidated financial statements, "Summary of
Significant Accounting Policies" contained in the Company's Annual
Report on Form 10-K.
We have entered into a number of license agreements covering
potential products using the Company's SPD technology. Under these
agreements, we generally recognize income from royalties when
earned in accordance with the terms of the agreements.
The Company expenses costs relating to the development or
acquisition of patents due to the uncertainty of the recoverability of
these items.
All of our research and development costs are charged to
operations as incurred. Our research and development expenses
consist of costs incurred for internal and external research and
development. These costs include direct and indirect overhead
expenses.
On occasion, the Company may issue to consultants either
options or warrants to purchase shares of common stock of the
Company at specified share prices. These options or warrants may
vest based upon specific services being performed or performance
criteria being met. In accordance with Emerging Issues Task Force
Issue 96-18, Accounting for Equity Instruments that are Issued to
Other than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services, the Company would be required to record
consulting expenses based upon the fair value of such options or
warrants on the date that such options or warrants vest as determined
using a Black-Scholes option pricing model. Depending upon the
difference between the exercise price and the market price of the
Company's common stock on the date that such options or warrants
vest, the amount of non-cash expenses that could be recorded as a
result of the vesting of such options or warrants can be material.
The Company applies the cost method of accounting for its
minority equity interest in SPD Inc., a subsidiary of Hankuk Glass
Industries, Inc. Because no public market exists for the common stock
of SPD Inc., the Company reviews the operating performance,
financing and forecasts for such entity in assessing the net realizable
value of this investment. As a result, any significant adverse change
in the above could lead to an impairment charge in future periods.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements,
and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from these estimates. An example
of a critical estimate is the full valuation allowance for deferred taxes
that was recorded based on the uncertainty that such tax benefits will
be realized in future periods.
Controls and Procedures
We maintain a system of controls and procedures designed to
provide reasonable assurance as to the reliability of the financial
statements and other disclosures included in this report, as well as to
safeguard assets from unauthorized use or disposition. We evaluated
the effectiveness of the design and operation of our disclosure controls
and procedures under the supervision and with the participation of
management, including our Chief Executive Officer and Chief
Financial Officer, within 90 days prior to the filing date of this report.
Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and
procedures are effective in timely alerting them to material information
required to be included in our periodic Securities and Exchange
Commission filings. No significant changes were made to our internal
controls or other factors that could significantly affect these controls
subsequent to the date of their evaluation.
Results of Operations for the Three Month Periods Ended March 31, 2003 and 2002
The Company's fee income from licensing activities for the first three
months of 2003 was $86,128 as compared to $53,125 for the first three
months of 2002. This increase in fee income was primarily the result
of new license agreements entered into in 2002 and minimum annual
royalties paid by end-product licensees. In addition, the Company
recorded a small amount of royalty income related to sales of licensed
products by its licensees in the first quarter of 2003 which exceeded
their minimum annual royalty payments recorded by the Company.
Certain license fees, which are paid to the Company in advance of the
accounting period in which they are earned resulting in the recognition
of deferred revenue for the current accounting period, will be
recognized as fee income in future periods. Also, licensees may offset
some or all of their royalty payments on sales of licensed products for
a given period by applying these advance payments towards such
earned royalty payments.
Operating expenses decreased by $44,260 for the first three months of
2003 to $581,454 from $625,714 for the first three months of 2002.
This decrease was primarily the result of decreased expenses in
connection with market research, public relations and legal fees,
partially offset by increases in salaries and insurance costs.
Research and development expenditures increased by $115,138 to
$572,238 for the first three months of 2003 from $457,100 for the first
three months of 2002. This increase was primarily the result of
increased payroll expenses primarily from performance bonuses paid
to non-management employees, and higher insurance and materials
costs.
During the first quarter of 2003, the Company recorded a non-cash
charge of $255,200 against income to reflect a reduction in the value
of its investment in SPD Inc. determined based upon recent financing
activities by SPD Inc.
The Company's net gain from its investing activities for the first
quarter of 2003 was $9,837, as compared to a net gain from its
investing activities of $108,822 for the first quarter of 2002. This
difference was primarily due to a lower level of average investment
balances in 2003 compared to 2002, and lower interest rates.
As a consequence of the factors discussed above, the Company's net
loss was $1,312,927 ($0.11 per share) for the first three months of
2003 as compared to $920,867 ($0.08 per share) for the first three
months of 2002.
Financial Condition, Liquidity and Capital Resources
During the first three months of 2003, the Company's cash and cash
equivalent balance decreased by $794,841 principally as a result of
cash used to fund the Company's operating activities of $1,003,163,
offset by $214,695 of proceeds received, net of expenses, from the
private placement of common stock and the issuance of common stock
upon the exercise of warrants. At March 31, 2003, the Company had
working capital of $4,172,905 and its shareholders' equity was
$4,870,609.
In April 2003, the Company's wholly-owned subsidiary, SPD
Enterprises, Inc., invested $74,902 in SPD Inc., raising its equity
ownership from 6.67% to 6.91%. SPD Inc.'s parent company invested
at the same time and on the same price, $748,931, raising its equity
ownership in SPD Inc. from 66.67% to 69.09%.
In November 2002, the Company's Board of Directors approved a
performance bonus plan to replace earlier bonus plans with a general
bonus plan under which bonuses are awarded to employees of the
Company for outstanding achievement including technical
accomplishments, sales and revenue growth, and other performance
milestones. All employees of the Company are eligible to receive
bonuses under this plan and the bonuses shall not exceed $300,000 in
the aggregate for 2003. During the first quarter of 2003, bonuses were
awarded under this plan to certain non-management employees of the
Company totaling $52,500, and no bonuses were awarded under this
plan to any members of management.
On October 1, 1998, the Company announced that Ailouros Ltd., a
London-based institutional money management fund, has committed
to purchase up to $15 million worth of common stock of the Company
through December 31, 2001. This commitment is in the form of a
Class A Warrant issued to Ailouros Ltd. which gives the Company the
option in any three-month period to deliver a put notice to Ailouros
requiring them to purchase an amount of common stock specified by
the Company at a price equal to the greater of (A) 92% of the seven-
day average trading price per share of common stock, or (B) a
minimum or "floor" price per share set by the Company from time to
time. The pricing was initially subject to an overall cap of $15 per
share, which cap has now been eliminated by mutual agreement so that
the Company may put stock to Ailouros at selling prices in excess of
$15 per share. However, the Company is not required to sell any
shares under the agreement. Before the beginning of each of a series
of three-month periods specified by the Company, the Company
determines the amount of common stock that the Company wishes to
issue during such three-month period. The Company also sets the
minimum selling or "floor" price, which can be reset by the Company
in its sole discretion prior to the beginning of any subsequent three-
month period. Therefore, at the beginning of each three-month period,
the Company will determine how much common stock, if any, is to be
sold (the amount of which can range from $0 to $1.5 million during
such three-month period), and the minimum selling price per share. In
March 2000, Ailouros agreed to expand its commitment beyond the
original $15 million, thereby giving the Company the right to raise
additional funds from Ailouros so long as the Company does not have
to issue more shares than were originally registered with the Securities
and Exchange Commission, and in December 2001 the expiration date
of the Class A Warrant was extended to December 31, 2003. As of
March 31, 2003, 456,717 shares remained registered for future
issuance under the Class A Warrant.
The Company expects to use its cash and the proceeds from maturities
of its investments to fund its research and development of SPD light
valves 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, 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. Based
upon existing levels of expenditures, assumed ten percent annual
increases therein, existing cash reserves and budgeted revenues, the
Company believes that it would not require additional funding for the
next 12 months (without giving effect to any new financing raised).
There can be no assurance that expenditures will not exceed the
anticipated amounts or that additional financing, if required, will be
available when needed or, if available, that its terms will be favorable
or acceptable to the Company. Eventual success of the Company and
generation of positive cash flow will be dependent upon the extent of
commercialization of products using the Company's technology by the
Company's licensees and payments of continuing royalties on account
thereof.
Recently Issued Accounting Standards
In December 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure" ("SFAS
148"). SFAS 148 provides alternative methods of transition for a
voluntary change to the fair value method of accounting for
stock-based employee compensation as originally provided by SFAS
No. 123 "Accounting for Stock-Based Compensation". Additionally,
SFAS 148 amends the disclosure requirements of SFAS 123 to require
prominent disclosure in both the annual and interim financial
statements about the method of accounting for stock-based
compensation and the effect of the method used on reported results.
The transitional requirements of SFAS 148 are effective for all
financial statements for fiscal years ending after December 15, 2002.
The Company adopted the disclosure portion of this statement for the
current fiscal quarter ended March 31, 2003. The application of the
disclosure portion of this standard will have no impact on our
consolidated financial position or results of operations. The Financial
Accounting Standards Board recently indicated that they will require
stock-based employee compensation to be recorded as a charge to
earnings beginning in 2004 and that FASB will issue further rules on
this subject. The Company will continue to monitor FASB's progress
on the issuance of this standard as well as evaluate the Company's
position with respect to current guidance.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information required by Item 3 has been disclosed in Item 7A of
the Company's Annual Report on Form 10-K for the year ended
December 31, 2002. There has been no material change in the
disclosure regarding market risk.
Forward Looking Statements
The information set forth in this Report and in all publicly
disseminated information about the Company, including the narrative
contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" above, includes
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and is subject to the
safe harbor created by that section. Readers are cautioned not to place
undue reliance on these forward-looking statements as they speak only
as of the date hereof and are not guaranteed.
PART II. OTHER INFORMATION
Item 5. Other Information
In connection with an amendment to the Company's license agreement
with InspecTech Aero Service Inc., the earned royalty rate for license
years 2003 through 2009 was increased from 10% to 15%, and the
scope of licensed products that may be sold by InspecTech was
expanded from aircraft windows and partitions, to also include marine
windows, aircraft and marine sun visors, and windows for certain
specialty vehicles.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None
(b) Reports on Form 8-K. Current Report on Form 8-K
dated February 24, 2003 regarding the Company's adoption of a
Shareholder Rights Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunder duly authorized.
RESEARCH FRONTIERS INCORPORATED
(Registrant)
/s/ Robert L. Saxe
Robert L. Saxe, Chairman
(Principal Executive Officer)
/s/ Joseph M. Harary
Joseph M. Harary, President and Treasurer
(Principal Financial, and Accounting Officer)
Date: May 14, 2003
CERTIFICATION
I, Robert L. Saxe, the Chairman and Chief Executive Officer of
Research Frontiers Incorporated ("RFI" or the "registrant") certify that:
1. I have reviewed this quarterly report on Form 10-Q of RFI;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls;
and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Dated: May 14, 2003 /s/ Robert L. Saxe
Robert L. Saxe
Chairman and Chief
Executive Officer
CERTIFICATION
I, Joseph M. Harary, the President, Chief Operating Officer,
Treasurer and Chief Accounting Officer of Research Frontiers
Incorporated ("RFI" or the "registrant") certify that:
1. I have reviewed this quarterly report on Form 10-Q of RFI;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls;
and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Dated: May 14, 2003 /s/ Joseph M. Harary
Joseph M. Harary
President, Treasurer,
Principal Accounting Officer