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 June 30, 1995 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 August 10, 1995, there were outstanding 9,180,889
shares of Common Stock, par value $0.0001 per share.
RESEARCH FRONTIERS INCORPORATED
Condensed Balance Sheets
June 30,1995
Assets (Unaudited) Dec.31,1994
Current assets:
Cash $290,863 219,771
Marketable investment securities 5,822,211 6,935,433
Accrued interest and dividends receivable 42,058 61,402
Prepaid expenses and other current assets 24,270 15,848
Total current assets 6,179,402 7,232,454
Fixed assets, net 114,513 138,204
Deposits and other assets 61,337 54,620
Total assets $6,355,252 7,425,278
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 53,514 116,690
Other accrued expenses 89,810 73,975
Total liabilities 143,324 190,665
Shareholders' equity:
Capital stock, par value $.0001 per share;
authorized 100,000,000 shares, issued
and outstanding 9,098,749 shares and
9,121,060 shares 910 912
Additional paid-in capital 23,010,829 23,232,108
Deficit (16,217,811) (15,116,763)
6,793,928 8,116,257
Notes receivable from officers (582,000) (881,644)
Total shareholders' equity 6,211,928
7,234,613
Total liabilities and
shareholders' equity $6,355,252 7,425,278
See accompanying notes to condensed financial statements.
RESEARCH FRONTIERS INCORPORATED
Condensed Statements of Operations
(Unaudited)
Six months ended Three months ended
June 30,1995 June 30,1994 June 30,1995 June 30,1994
Fee income $ -- 202,498 $ -- 18,138
Operating expenses 721,378 715,423 327,560 258,521
Research and
development 707,418 573,656 375,710 330,982
1,428,796 1,289,079 703,270 589,503
Operating loss (1,428,796) (1,086,581) (703,270) (471,365)
Investment income 255,028 234,366 99,408 126,406
(1,173,768) (852,215) (603,862) (344,959)
Unrealized(loss)
gain on investments 72,720 (434,540) 155,698 (178,512)
Net loss $(1,101,048) (1,286,755) $(448,164) (523,471)
Net loss per share $ (.12) (.15) $ (.05) (.06)
Weighted average
number of common shares
outstanding 9,077,583 8,609,791 9,078,132 8,611,525
See accompanying notes to condensed financial statements.
RESEARCH FRONTIERS INCORPORATED
Condensed Statements of Cash Flows
(Unaudited)
Six months ended
June 30,1995 June 30, 1994
Cash flows from operating activities:
Net loss $ (1,101,048) (1,286,755)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 27,634 25,203
Unrealized loss (gain) on investments (72,720) 434,540
Interest income on notes
receivable from officer (7,073) --
Decrease in accrued royalty receivable -- (32,257)
Decrease in accrued interest
and dividend receivable 19,344 9,282
(Increase) decrease in investments 1,185,942 (2,069,588)
Increase in other assets (15,139) (624)
Decrease in accounts payable
& accrued expenses (47,341) (118,619)
Increase in deferred revenues -- 326,217
Net cash used in operating activities (10,401) (2,712,601)
Cash flows from investing activities:
Capital expenditures (3,943) (62,773)
Decrease in accounts payable
for purchase of investments -- (1,562,507)
Net cash used by investing activities (3,943) (1,625,280)
Cash flows from financing activities:
Proceeds from exercise of
warrants and options 85,436 2,652,733
Increase in loans to officers -- (172,644)
Net cash provided by financing activities 85,436 2,480,089
Net increase (decrease) in cash 71,092 (1,857,792)
Cash at beginning of year 219,771 4,368,600
Cash at end of period $ 290,863 2,510,808
See accompanying notes to condensed financial statements.
RESEARCH FRONTIERS INCORPORATED
Notes to Condensed Financial Statements
June 30, 1995
(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 statement 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 six and three month periods ended June 30, 1995 are not
necessarily indicative of the results to be expected for the full
year. Certain reclassifications have been made to the 1994
balances to conform to the 1995 presentation. The notes included
herein should be read in conjunction with the notes to financial
statements of the Company at December 31, 1994 and for the three
years then ended, included in the Company's Annual Report on Form
10-K.
Business
Research Frontiers Incorporated (the Company) is primarily
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 a suspension of microscopic particles that is either
in the form of a liquid suspension or a film, enclosed between
two glass plates, at least one of which is transparent.
Stock Split
In February 1994, the Company issued 1,718,244 shares of common
stock in connection with a five for four stock split payable in
the form of a 25% stock dividend to stockholders of record on
January 31, 1994. All references in the accompanying financial
statements relating to per share and share data have been
adjusted retroactively to reflect this stock split.
Change in Par Value
On June 9, 1994, the Company's shareholders voted to change the
par value of the Company's common stock from $.125 to $.0001 per
share. As a result, all references to common stock have been
retroactively adjusted to reflect the new par value.
Subsequent Event
On August 2, 1995, the Company announced that it had entered into
a non-exclusive license with General Electric Company to make SPD
film for the Company's other licensees.
Financial Condition, Liquidity and Capital Resources
During the first six months of 1995, the Company's cash and
marketable investment securities balance decreased by
approximately $1,042,000 principally as a result of cash used to
fund the Company's research and development and other operating
expenses (approximately $1,429,000) and the decrease in accounts
payable and accrued expenses of approximately $45,000, offset by
investment income (approximately $255,000), unrealized gains on
investments (approximately $73,000), and proceeds from the sale
of common stock (approximately $85,000).
At June 30, 1995, the Company had working capital of $6,036,078
and its stockholders' equity was $6,211,928.
Notes receivable from officers decreased by approximately
$300,000 during the first six months of 1995. This was a result
of the payment of an outstanding loan to an officer. The loan
was paid with 45,545 shares of the Company's common stock held by
the officer, which shares were immediately retired by the
Company.
Results of Operations for the Six Month Periods Ended June
30,1995 and 1994
The Company did not earn fee income for the first six months of
1995 compared to $202,498 for the first six months of 1994. This
was a result of the renegotiation by the Company of certain
license agreements.
Operating expenses increased by approximately $6,000 for the
first six months of 1995 from approximately $715,000 for the
first six months of 1994. This increase was primarily a result
of increased payroll and insurance expense, offset by decreased
travel and public relations costs.
Research and development expenditures increased to $707,418 for
the first six months of 1995 from $573,656 for the first six
months of 1994. This increase was primarily the result of higher
salaries,increased materials costs, as well as increased costs
related to patents.
Net investment income increased by $20,662 to $255,028 for the
first six months of 1995 from $234,366 for the first six months
of 1994. This increase was primarily a result of higher interest
and dividend income received by the Company on its investments.
In addition, the Company recognized unrealized gains on
investments of $72,720 for the six months ended June 30, 1995
compared to an unrealized loss of $434,540 for the first six
months of 1994. The increase is primarily due to an increase in
the market value of the Company's investments in 1995.
As a consequence of the factors discussed above, the Company's
net loss was $1,101,048 ($0.12 per share) for the first six
months of 1995 as compared to $1,286,755 ($.15 per share) for the
first six months of 1994.
Results of Operations for the Three Month Periods Ended June 30,
1995 and 1994
The Company did not earn fee income for the second quarter of
1995 compared to $118,138 for the second quarter of 1994. This
was a result of the renegotiation by the Company of certain
license agreements.
Operating expenses increased by approximately $69,000 for the
second quarter of 1995 from approximately $259,000 for the second
quarter of 1994. This increase was primarily a result of
increased payroll and insurance expense, offset by decreased
travel and public relations costs.
Research and development expenditures increased to $375,710 for
the second quarter of 1995 from $330,982 for the second quarter
of 1994. This increase was primarily the result of increased
payroll and materials costs as well as increased costs related to
patents.
Net investment income decreased by $26,998 to $99,408 for the
second quarter of 1995 from $126,406 for the second quarter of
1994, as a result of lower interest and dividend income received
by the Company on its investments. In addition, the Company
recognized unrealized gains on investments of $155,698 for the
second quarter of 1995 compared to an unrealized loss of $178,512
for the second quarter of 1994. The increase is primarily due to
an increase in the market value of the Company's investments in
1995.
As a consequence of the factors discussed above, the Company's
net loss was $448,164 ($0.05 per share) for the second quarter of
1995 as compared to $523,471 ($.06 per share) for the second
quarter of 1994.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
The Annual Meeting of Stockholders of Research Frontiers
Incorporated was held on June 8, 1994. Listed below is a summary
of how the 8,405,398 shares voted at the Annual Meeting on the
various proposals voted upon and adopted at the Annual Meeting.
For the election of Bernard D. Gold as a Class II director,
8,259,085 shares were voted in favor of election, and 146,313
votes were withheld. For the election of Robert I. Thompson as a
Class II director, 8,260,877 shares were voted in favor of
election, and 144,521 votes were withheld. For the ratification
of the appointment of KPMG Peat Marwick LLP as auditors for 1995,
8,301,767 shares were voted in favor of election, 56,187 shares
were voted against, and 47,444 shares abstained from voting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None
(b) Reports on Form 8-K. The Company filed with the
Commission an amendment to a Current Report on Form 8-K/A dated
April 17, 1995 which refiled as an exhibit the Company's
non-exclusive license agreement with Sanyo Electric Co., Ltd.
covering flat panel displays. The new exhibit was filed to more
specifically reflect that certain confidential information
contained in this exhibit was omitted and filed separately with
the Commission pursuant to the Company's request for confidential
treatment of such information.
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, President and Treasurer
(Principal Executive, Financial, and
Accounting Officer)
Date: August 11, 1995